Supplemental info for financial Statements

1. Common Sources

1. Footnotes::

1. Show Accounting methods
2. Show Assumptions — going concern(假设永远不倒闭)
3. Show Estimate — (1)use life of assets + (2)residual value of assets
4. Footnotes are audited

2. MD&A (Management’s discussion and analysis)::

1. Performance review from the management’s perspective
2. Trends in sales and expense, cash flow
3. Big events and uncertainties
4. Bussiness overview

3. Audit & Internal control::

1. Independent review of the financial statements
2. Opnion on company’s internal controls under U.S. GAAP standard
3. Different auditor’s opinion (reasonable assurance) | Construct | Opinion | Explaination | — | — | — | | Good | Unqualified opinion(clean opinion) | Free from material(big) omissions and errors | Pass | Qualified opinion | Agree most of the report | Fail | Adverse opnion | Stements not presented fairly—bad | Refuse to audit | Disclaimer of opinion | Unable to express opinions

4. SEC fillings(给证监会的重要公告报备)::

1. Form 8-K (1) Aquisitions and disposals (2) Change in management & corporate governance
2. Form 10-K Annual financial statements(audited)
3. Form 10-Q Quarterly financial statements(may be unaudited)

5. Proxy statements::

1. Management compensation & Issurance of stock options