Changde Dongding Power Machinery Co. , Ltd. is a medium company in China. The company dominates the local market and besides making the international concern. About 70 % of its merchandises are sold to other state, and the company wants to spread out their concern to more countries.
For this intent, the company is captive to more development in corporate administration. As we know, that in China, the fiscal statements are ever non paid much attending. The company sees the fiscal studies as a sort of information record instead than utilize it as a direction tool. And Changde Dongding Company has this job every bit good.
The aim of this study is to happen out how to better the internal usage of fiscal statements in the company. The research can be described as a instance survey, and the primary research is the interview with the proprietor and directors of the company which followed by the secondary information beginnings.
The full study is following three chief research subjects: Fiscal statements users, the dependability of the fiscal statements and Management ‘s attitude on the fiscal statements. Derived from these research subjects are the undermentioned research inquiries:
Are people who should utilize the fiscal statements all included and do they do full usage of these statements?
Does the company have internal auditing to increase the dependable of the statements?
How frequently do the directions use the fiscal statements? Do they attach great importance to the statements?
We found out that Changde Dongding Company use the Chinese GAAP as its criterions, and the studies are all in Chinese which is a large failing for an international company. And its internal audit system is non being valued, so it undermines the religion in the dependability of the fiscal studies which may ensue for imprecise rating in the company. In order to better the internal usage of fiscal statements, direction ‘s attitude on the studies plays a decisive portion. The direction should give great concern and sufficient attending on it.
Main recommendations for Changde Dongding Company are to do the fiscal statements more international so that more people understand it. Furthermore, the company should better its internal auditing system to increase the dependability of the fiscal studies. Finally, the direction needs to pay more attending on it for the counsel of better development.
Chapter 1: Case Introduction
Introduction instance company
Changde Dongding Power Machinery Co. , Ltd. was founded in Zhejiang state in 1990. In 2002, the company moved to Hunan state. As a member of Light Automobile Repairing Association of China, the company chiefly manufactures trim parts of car engines, and the merchandises are series of Cylinder Heads, Cylinder Blocks, Crankshafts, and Connecting Rods.
Current state of affairs
Now, the company is located in Hunan state where the transit is convenient and the natural stuff is inexpensive. The one-year production capacity of this company reaches 150,000pieces. 70 % – 80 % of these merchandises are sold to North America, South America, Southeast Asia, Africa, Middle East and Eastern Asia. Beside this, more markets should be reached from now on, such as Europe.
In recent old ages, although this company expanded its concern, its net net incomes did non increase as their expected. And Mr. Kesong Gao who is the proprietor of Changde Dongding Co. is inquiring where they went incorrect and how he can happen the job.
The buying section is responsible for looking for providers and publishing orders of natural stuffs and equipments.
The company has its ain private warehouse. The repositing section manages the storage of natural stuffs and merchandises.
Research and development squad
The work of the research and development squad is to research new merchandises and to happen more information about mark market.
The production section is the largest section in Changde Dongding Company, it has 50 workers in this squad and it is responsible for the physical industry of the merchandises.
Gross saless section
The responsibilities of the gross revenues section are covering with consumers and advertisement.
The transportation section is organizing with the repositing section and gross revenues section to have natural stuffs and to direct merchandises to the clients.
Human resources section
The human resources section is responsible for forming people, and besides supplying policies within the company.
Department of finance
The section of finance is work with all company studies. They are fixing fiscal statements, be aftering budget, and managing and forming all of the fiscal activities.
The direction squad consists of people who have portions in this company.
From the current state of affairs, we can happen that Changde Dongding Power Machinery Company has good merchandises, good repute and comparatively good organized squads. But from the fiscal studies of the company, we can happen there are still some jobs, such as the disbursal of natural stuff is high which result the net incomes go down, but the direction did non pay attending on it.
The following subject, we will discourse the job definition which identified with the chief research subjects.
Our job definition can be identified by get downing with the chief research aim:
How to better the internal usage of fiscal statements to measure public presentation and planning for the hereafter in China?
In this study, we want to cognize how the company uses fiscal statements presently, and so happen out how we can better the internal usage of fiscal statements, in order to understand the fiscal place clearly, to measure public presentation accurately, and to be after the hereafter moderately.
There are three chief research subjects:
Fiscal statements users
The dependability of fiscal statements
Managements ‘ attitudes on fiscal statements
The job definition can be identified when looking at the current position of those research subjects.
Fiscal Statements Users
Fiscal statements users are the people who use the fiscal statements for different intents. The fiscal statements can be utilized as revenue enhancement settlement, public presentation rating, budgeting and the company place verification.
After we know who uses the fiscal statements, we may inquire, does the company have internal control on the fiscal statements, and is the information reliable? The dependability of the fiscal statements is really of import for company to utilize it as both in external and internal usage. And the accurate fiscal statements can diminish the hazards of finance determinations.
3. Managements ‘ attitude on Fiscal Statements
The direction attitude on fiscal statements is important for the usage of the fiscal studies. If the direction can pay much attending on it, it will be really helpful for the betterment of usage of fiscal statement.
In order to give a ocular presentation on the job ( fish caput ) and causes ( castanetss ) a fishbone diagram is presented on the following page
Now, we want to analyze if all people that should utilize the statements are all included in Changde Dongding co. , because the deficit of fiscal statements use consequences troubles for the company to be after budget, evaluate public presentation. In order to work out these jobs, we start to make the research from happening the fiscal statements users, the dependability of the studies, and the direction attitude on the fiscal studies.
Following subject will put the research objectives which derived from the five research subjects.
1. Fiscal Statements Users: To happen out if all users who should utilize the fiscal studies are included and, if non, to give suggestions on who need to be included.
2. Dependability: To happen out if the fiscal statements are dependable and, if non, to give recommendations on what the company can make to increase the dependability of its fiscal studies.
3. Managements ‘ attitude on Fiscal Statements: To happen out how the direction usage the fiscal statements to measure the public presentation and budgeting.
The following subject will come up with research inquiries which can assist us to make the research aims.
1. Fiscal Statements Users
Who use the fiscal statements in Changde Dongding Co. and do they do full usage these statements?
How is the company ‘s internal control on the fiscal statements? Does the company have internal auditing to increase the dependable of the statements?
3. Managements ‘ attitude on Fiscal Statements
How frequently do the directions use the fiscal statements? Do they attach great importance to the statements?
Chapter ‘s drumhead
In this chapter, we discussed the history and the current state of affairs of Changde Dongding Power Machinery Co. , Ltd. In order to better the usage of the fiscal statements, there are five research subjects which need to be considered: Fiscal Statements Users, Reliability, Management attitude on Financial Statements, Budgeting system, and Standards for fixing fiscal statement.
In the 2nd chapter, literature reappraisal will back up some secondary informations to assist us to happen replies of the research inquiries and make the research aims.
Chapter 2: Literature reappraisal
In this chapter, we will analyse some secondary informations which will be used to assist us to reply our research inquiry in order to run into our research aims. There besides will be several theories which may be explained. And it will demo why we should utilize these theories in replying and understanding the research inquiries.
Users of fiscal statements
For intent of better the internal utilizing of fiscal statements, the most basic thing is to happen out who are the users of fiscal statement.
Figure 1 shows the internal and external users of fiscal statements and what do they look for[ 1 ].
Owners: proprietors use the fiscal statement to reexamine the public presentation of direction, and the proprietors take more attending on its net incomes.
Directors: directions use the fiscal statement to measure its ain public presentation, and to be after the hereafter.
Current employees: They focus on the net incomes that the company made, so that they can see that if they can inquire for more wages.
Suppliers: providers want to cognize if the company has the ability to pay off on clip. And they need to cognize is the company traveling concern from the fiscal study.
Lenders: loaners expect to cognize if the company can pay back, and how much involvement they can acquire.
Customers: clients besides require the fiscal study to see if the company can travel on. If non, the clients will ne’er desire to hold cooperation with this company.
General Mass and Media: General mass and media want to cognize the fiscal state of affairs of the company and to denote to the populace.
Government bureaus: Government bureaus use the fiscal study to cognize how much revenue enhancements the company should to pay.
Perspective employees: position employees will look for the related informations from the fiscal study to cognize if the company has a hereafter.
Changde Dongding Company must to understand who should or might utilize the fiscal statements and what are their intents. There are two sorts of users: internal users and external users. First, the internal users are the important to better the internal usage of fiscal studies. Particularly for directors, the fiscal statements supply orientation and ways for the development of the company. However, we can non disregard the external users. The reaction of the external users on fiscal studies could supply a big sum of information for the internal users, such as what are their outlooks on the company.
Internal auditing has been defined by the IIA[ 2 ]( The Institute of Internal Auditors ) as follows:
“ Internal auditing is an independent, nonsubjective confidence and consulting activity designed to add value and better an organisation ‘s operations. It helps an organisation carry through its aims by conveying a systematic, disciplined attack to measure and better the effectivity of hazard direction, control, and administration procedures.
Independence is established by the organisational and coverage construction. Objectivity is achieved by an appropriate head – set. The internal audit activity evaluates hazard exposures associating to the organisation ‘s administration, operations and information systems, in relation to:
effectivity and efficiency of operations ;
dependability and unity of fiscal and operational information ;
safeguarding of assets ;
Conformity with Torahs, ordinances, and contracts. ”[ 3 ]
The internal audit map is portion of the internal monitoring system of the organisation and therefore should be positioned within the organisation such that the independency of internal hearers can be guaranteed. Ideally, internal audit should describe functionally to the Audit Committee of the Board of Directors and administratively to the Chief Executive Officer ( CEO ) of the organisation. And internal audit is a multi-step procedure aimed at finding whether bing procedures and processs ( the status ) comply with applicable regulations and ordinances ( the standard ) or divert in any manner from these standards.[ 4 ]
Internal Audit Process[ 5 ]
In order to corroborate the dependability of the fiscal statements, it is required a professional and effectual internal scrutinizing procedure in the company. By understanding the internal auditing system we can happen out if this system may increase the credibleness of the fiscal statements.
Financial Ratio Analysis[ 6 ]
Fiscal ratios help us place some of the fiscal strengths and failings of a company. The ratio give us two ways of doing meaningful comparings of a house ‘s fiscal informations: ( 1 ) We can analyze the ratios across clip to place any tendencies ; and ( 2 ) We can compare the house ‘s ratios with those of other houses.
The following four inquiries as a map in utilizing fiscal ratios:
How liquid is the house?
Is direction bring forthing equal runing net incomes on the house ‘s assets?
How is the steadfast funding its assets?
Are the proprietors having an equal return on their investing?
Approach 1: the first attack compares hard currency and the assets that should be converted into hard currency within the twelvemonth with the debt that is coming due and collectible within the twelvemonth. The assets here are the current assets, and the debt is the current liabilities in the balance sheet. Thus we could utilize the undermentioned step, called the current ratio, to gauge a company ‘s comparative liquidness:
Furthermore, retrieving that the three primary current assets include ( 1 ) hard currency, ( 2 ) histories receivable, and ( 3 ) stock lists, we could do our step of liquidness more restrictive by excepting stock lists, the least liquid of the current assets, in the numerator. This revised ratio is called the acid – trial ( or promptly ) ratio, and is calculated as follows:
Approach 2: the 2nd position of liquidness examines the house ‘s ability to change over histories receivable and stock list into hard currency on a timely footing. The transition of histories receivable into hard currency may be measured by calculating how long it takes to roll up the house ‘s receivables ; that is, how many yearss of gross revenues are outstanding in the signifier of histories receivable? We can reply this inquiry by calculating the mean aggregation period:
We could hold reached the same decision by mensurating how many times histories receivable are “ rolled over ” during a twelvemonth, or the histories receivable turnover ratio.
We now want to cognize the same thing for stock lists that we merely determined for histories receivable: How many times are we turning over stock lists during the twelvemonth? In this mode, we gain some penetration into the liquidness of stock lists. The stock list turnover ratio is calculated as follows:
To analyze the degree of runing net incomes relative to the assets, we could utilize the operating income return on investing ( OIROI ) :
We now turn for the minute to the affair of how the house is financed. We shall return to the house ‘s profitableness shortly. The basic issue is the usage of debt versus equity: Do we finance the assets more by debt or equity? In replying this inquiry, we will utilize two ratios. Many more could be used. First, we merely inquire what per centum of the house ‘s assets are financed by debt, including both short – term and long – term debt, recognizing the staying per centum must be financed by equity. We should calculate the debt ratio as follows:
A times involvement earned ratio is normally used when analyzing the house ‘s debt place and is computed in the undermentioned mode:
Tax return on Equity
Our one staying inquiry looks at the accounting return on the common shareholders ‘ investing or return on common equity ; that is, we want to cognize if the net incomes available to the house ‘s proprietors or common equity investors are attractive when compared to the returns of proprietors of companies in the equal group.
We measure the return to the proprietors as follows:
Fiscal ratios are the chief tools to assist the company to measure its fiscal public presentation, and to cognize its fiscal strengths and failings.
Chapter 3: Research Methodology
In this chapter the manner of put to deathing the research will be discussed. First, in 3.1, the research type will be shown. Second, we will discourse the research design. And the research model will give you a brief account. Finally, the research phases and the planning will be reported.
The research can be described as a instance survey. The methods used for informations aggregation during this research will be explained as follows:
Interview with the proprietors and top director of the company.
Interview with the fiscal director or his helper.
Ask the company for fiscal studies
The telephone interview will be chosen. In order to understanding the company profoundly, Mr. Gao who is the top director and an proprietor of the company will be interview in the first. Then, I will phone the fiscal director several times to happen out the replies of the research inquiries.
The intent of usage secondary research is gather information, and comparison with the theory which shows in chapter 2. It chiefly depends on documental informations aggregation, such as fiscal studies, diaries and marketing research studies.
Research design is taking the research to the existent procedure. The research design shows how the research has been undertaken.
The research model explains the order of the research procedure. First, we make a chief aim of the research. Then, we can happen what job we need to work out before we reach the research aim. In order to calculate out the research job, six research aims should be achieved. And below is six research inquiries correspond to the research aims. After, the research methods will be showed which related to the theories and bing company information. Finally, the decisions and recommendation are presented.
The research model will be showed on the undermentioned page.
The research includes three stage division. The stages will be showed as follows:
This stage contained the overall orientation on the research. Fixing the research proposal and puting up the research aims are besides in this stage.
This stage is informations aggregation which includes bing company information and theories.
In this stage, we will plan the recommendations after we compared the bing company information and theories that we used in the research.
The research planning will be revealed as a Gantt chart.
Chapter 4: Research Findingss
In this chapter, research findings are presented. The findings are related to the three research inquiries. By the terminal of each subdivision of this chapter, the reader should be able to happen the reply of the research inquiries.
Fiscal Statements Users
Research inquiry 1: “ Are people who should utilize the fiscal statements all included in and do they do full usage these statements? ”
First, we should cognize what criterions that the company implemented. After checked the fiscal statement of Changde Dongding Co. and the interview with Mr. Zeng, we found out that from 1990 to 2009, the company implemented Chinese GAAP. But on the other custodies, Mr. Zeng said, on 9 July, 2009 the International Accounting Standards Board published an international Financial Reporting Standard designed for usage by little and average – sized entities. At the same clip, sing their spread outing abroad market, the company is get downing to analyze the IFRS for SMEs. Thus, the current state of affairs is that the aliens can non understand the fiscal studies of Changde Dongding Company.
The fiscal statements users can be divided into two groups: Internal users and External users. In Changde Dongding Co, the chief fiscal statements users are the proprietors, directors and authorities bureaus.
After the interview with Mr. Gao, it is evidently to happen that in Changde Dongding Co. , the proprietors normally use the fiscal statement every one-fourth to reexamine the direction public presentation.
The fiscal director is Mr. Zeng Daqing ; he said that his helper is responsible for fixing fiscal statements and the internal audit, and the work of be aftering budget.
Fixing fiscal statements is their basic responsibility. Every dealing will be recorded in the fiscal statements.
The internal auditing procedure is normally done by the fiscal director at the terminal of every twelvemonth.
Changde Dongding Co. , ever do a annual budget for gross revenues, production and outgo. The undertaking budget is done at the really beginning, and it could assist the director to make up one’s mind if they should get down this undertaking, such as to purchase new machines.
The authorities bureaus use the fiscal statements to analyze if the company pay the revenue enhancement and if they fraud. The loaners use the fiscal statement to cognize if the company can pay back on clip.
Dependability of the Financial Statement
Research inquiry 2: “ How is the company ‘s internal control on the fiscal statements? Does the company have internal auditing to increase the dependable of the statements? ”
As we mentioned in 4.1, Changde Dongding Co. has internal audit system, but it does non hold independent people to make this work. This whole procedure is done by the fiscal helper who is besides responsible for doing the fiscal statements.
Mr. Zeng said their accounting system is prudent, so there is no rigorous ordinance for internal audit in their company. The bookkeepers in this company record every dealing on the computing machine every twenty-four hours. Then, the accounting helper can set up all the informations and fix the fiscal statement, and this work will be done every hebdomad. After the accounting helper give the fiscal statement to the fiscal director, the director will look into and give a concluding determination on it.
The fiscal helper of Changde Dongding Company plays several functions at the same time. At the terminal of twelvemonth, the fiscal helper as the internal hearer and begins to be after the internal audit. The aim of this activity is determined by both the proprietors and directors. Then, the fiscal helper will measure the hazards of material misstatement of the fiscal statements. After she will prove all grounds, the fiscal helper may finish the audit processs and publish an sentiment.
Figure: the procedure of internal audit in Changde Dongding Company
Managements ‘ attitude on Fiscal Statements
Research question3: “ How frequently do the directions use the fiscal statements? Do they attach great importance to the statements? ”
There are three chief fiscal statements: income statement, balance sheet and hard currency flow. The proprietors and directors could utilize all of them to measure the public presentation. But in Changde Dongding Co. , the proprietors and directors pay more attending on the net incomes and they ignore the cost all the clip. If the net income goes up, they will keep a positive attitude on old public presentation, but if there is smaller and less honoring than earlier, the proprietors will believe the direction squad has jobs.
In 2007, the gross net income of Changde Dongding Co. is 14,040,425.21 ;
In 2008, the gross net income is 10,452,359.52 ;
In 2009, the gross net income is 7,248,056.65.
Compared to the net income in 2007, the gross net income in 2009 decreased 6,792,368.56. After Mr. Gao notice that, he said may be there is a job on their selling scheme which consequence to the gross revenues decreased, and the net incomes went down every bit good.
However, when we look at the income statement, we get the Numberss of the gross.
In 2007, the gross is 75,384,150.23
In 2008, the gross is 74,812,782.30
In 2009, the gross is 77,323,877.75
From this fiscal information, we can easy to happen that the job is non the gross revenues decreased, because even the gross increased in recent old ages, the gross net income is decreased twelvemonth by twelvemonth.
After we calculated the operating income return on investing ( which will be displayed in 4.6 instance 2 ) , the truth is that the operating income return on investing became less and less from 2007 to 2009 which means the operating income decreased from twelvemonth to twelvemonth.
The company uses the flexible budgeting system to be aftering which provides more meaningful comparing as it flexes to the existent volume. It computes costs harmonizing to the existent degree of activity. And the flexible budget could assist the directors to cover with unsure factors, such as to give the expected results for a scope of activity.
Fiscal Statement analysis
In Changde Dongding Co. , there is no complete system to analyse its fiscal statements. Although the fiscal section could make this work ; there is no demand from the proprietors and directors.
So, in footings of the speedy ratio, Changde Dongding Co. was less liquid in twelvemonth 2009 than it in 2007 and 2008. In 2009, the company had 0.39 in drifting assets less stock lists per 1 of drifting debt, compared to 0.94 for 2008 and 0.96 for 2008. Therefore, Changde Dongding Co. has much less ability to run into its maturating duties in 2009. But the direction squad did non recognize this job. And they said the balance sheet of twelvemonth 2009 show that there is no long-run debt.
Hence we see that in 2007, Changde Dongding Co. was gaining over twice the return on investing than it did in 2009. Which means the runing income became less and less. Therefore, the company needs to work out the operating job, but non the gross revenues job. However, from first half of last twelvemonth, the company increased the advertizement cost to raise the merchandise consciousness which in fact increased the operating cost. If the company continues to disregard this job, this will be a barbarous circle.
Therefore, the company used more debt in 2009. But from the studies we can happen that the company did non hold long-run debt. The short-run debt may ensue in fast fund flow which may hold possible hazards on keeping financess.
In this chapter, we used the research methods to happen the replies for the research inquiry. And in the following chapter, the decision of these determination will be presented to the readers.
Chapter 5: Decisions and Recommendations
This is the last chapter of the study. In this chapter, the decisions which based on the research findings will be presented to readers. And harmonizing to the decisions, there are followed recommendations which may assist the company for betterment.
Fiscal Statements Users
In the past old ages, Changde Dongding Co. prepared the fiscal statements harmonizing to the Chinese GAAP and all in Chinese. Now, above 70 % of their merchandises are sold to foreign markets and they are captive on spread outing their abroad market in future. Therefore, it is necessary to implement IFRS in this company which could allow more groups to utilize the fiscal statement, such as foreign clients, investors, and foreign workers. However, it is deserving adverting that the company noticed this job and began to alter the criterions.
The internal users of fiscal statements in Changde Dongding Co. are the proprietors and directors, which means the chief internal users are included. But its current employees do non cover with it, so the employees have no thought about the state of affairs of their company, and the rumour from outside may do terror. Therefore, there is hazard for the company to maintain the endowments stay in and good cultivate them.
From marketing position, Changde Dongding Co. do non supply its clients fiscal statements, therefore, clients is unsure about to purchase their merchandises, particularly the clients who want to maintain long concern relationships with the company.
The company needs an independent people to make the internal audit which is the most indispensable demand to make this process. However, Changde Dongding Co. , do non hold an independent individual to make this work. The accounting helper collects all dealing informations, and makes the fiscal statements. At the terminal of the twelvemonth, the internal audit is besides her duty, therefore, it can non execute the map of internal audit. In order to increase the internal usage of the fiscal statements, the company should hold a reasonably complete internal audit system to heighten the dependability of the fiscal statements.
Management ‘ attitude on Fiscal Statements
Even the net net income is an component to measure the old public presentation, it is a non that overall sum-up. Every information in the fiscal statement should be taken in consideration of evaluate public presentation. Merely when the company finds the root job, the company can acquire more money and have better development.
Changde Dongding Co. uses the flexible budget to be aftering gross revenues and cost at the terminal of every twelvemonth. On one manus, the flexible budgeting system can do full advantage of the fiscal statement. On the other manus, the company merely uses the budget one time a twelvemonth ; it is far from adequate. So, the direction should pay more attending to the company ‘s budgeting system, and frequently to do usage of the budget system to compare realistic and adjust cost to be aftering hereafter.
Fiscal Statement Analysis
Fiscal statement analysis is the chief method to assist the company to measure public presentation and to cognize the fiscal strengths and failing. But it non valued in Changde Dongding Co. If the company could heighten the use of fiscal statement analysis, the internal usage of fiscal statements will better every bit good.
Fiscal Statements Users
In order to better the internal usage of fiscal statements in your company, the first work of the company should be supplying other linguistic communication version for the fiscal studies. As we know, your company is an international company. The providers are from China, and the clients are from all over the universe. Therefore, there is an pressing demand for the English version of the fiscal studies which could allow more people to utilize it. Besides, your company should break to set the fiscal statements on your web site together with the company intelligence. Therefore, more people could utilize it and increase its transparence.
Option 1: Your company requires a complete internal audit system. So that an independent people demands to be set up to does this whole work, but non the individual who prepare the fiscal statements. You can name another comptroller from your company as the internal audit. It can do nonsubjective rating of company ‘s fiscal statements.
Option 2: You may take an accounting house ; they besides can assist you to make the internal auditing. They will make more work than the option 1. The first measure of scrutinizing process which is client acceptation is required, although the accounting house has less knowledge about your company, they will make more research on understanding you company from multi-aspect. It may do more nonsubjective rating.
Management ‘ attitude on Fiscal Statements
It is of import to the proprietors and directors of your company to utilize more informations from fiscal statement to measure the public presentation. There are four fiscal statements are needed: income statement, balance sheet, budget study and hard currency flow.
At the terminal of every month, your direction can compare the budget Numberss and the existent Numberss. And to look into if there is a broad spread between them. For the unnatural Numberss, directors should name the fiscal section to reexamine them. After, you can utilize the fiscal statement analysis study to reexamine the whole concern. Besides, there are some general fiscal regulation should be considered and set up, such as the company should non impart 40 % of their assets with debt. Furthermore, the proprietors and directors need to pay more attending on the internal audit study at the terminal of every twelvemonth.
Furthermore I advise you to analysis the fiscal statement every month, and to make the research of other companies ‘ informations in order to compare to your informations. Therefore, you can happen that if your company has job on liquidness, operating and funding. To perpetrate to the charge of accounting helper, she needs to subject the analysis study with the fiscal statement to the fiscal director.