There is increasing international concern about the escalation of fraud and, in particular, financial statement fraud. Detecting financial statement fraud and proving such fraud remains an elusive goal. Red flagging is an early warning system that has been used by auditors to determine the probability of financial statement fraud.The purpose of this research project was to survey investors and lenders in South Africa on their use of red flags and to obtain their opinions on the relative importance of individual red flags. A questionnaire was sent to banks that are registered with the Registrar of Banks (representative of lenders) and to portfolio managers registered with the Financial Services Board (representative of investors).The research findings indicate that lenders and investors in South Africa appear to be aware of the benefits of red flagging as an early warning system. A structured approach (questionnaires/checklists) in using them is to be lacking at present. Respondents rated all red flags in the questionnaire as being important. No distinction was discernable among the different categories that were based on the nature of red flags.

Recent research in Management Sciences has shown that flexibility is an essential characteristic of successful enterprises in a highly competitive and rapidly changing business environment (Kogut, 1985; Ansoff, 1988; Pasmore, 1994; Volberda, 1998). Consequently, management should not only understand flexibility but also be able to create flexible organisations and to measure and monitor flexibility. However, flexibility is a nebulous, elusive and multidimensional concept which is poorly understood and seldom managed and measured in enterprises (Gerwin, 1993; Parthasarthy & Sethi, 1993; Upton, 1994).The purpose of this article is firstly, to define the construct flexibility and secondly, to develop a conceptual framework that explains its multiple attributes in organisations. This framework is used as a basis for the measurement of flexibility. The article suggests procedures that managers can apply to develop indicators of flexibility and these indicators are used in turn, to identify current levels of flexibility, to set targets for flexibility and to monitor the progress made towards the achievement of these targets.

A number of studies conducted, and reports published, by international and local accounting bodies have found that the proliferation of disclosures in financial reports has hampered users' understanding of these reports. The reports by accounting bodies also indicate that these users prefer more concise financial reports. These findings, in conjunction with a dearth of recent questionnaire-based research on whether individual shareholders understand the content of financial reports, resulted in this study on whether individual shareholders understand the content of interim reports. The study provides empirical proof that a sound knowledge of business, accounting and economic matters is a prerequisite for understanding interim reports in the case of individual shareholders. The results of the study indicate that individual shareholders have a limited understanding of the content of interim reports as a whole, and that a good knowledge of business and economic matters and of accounting results in an improved understanding of the content of interim reports. In particular, specialisation in accounting in undergraduate and postgraduate degrees, professional qualifications, and work experience in the financial field improve the understanding of individual shareholders.

A number of studies conducted, and reports published, by international and local accounting bodies have found that the proliferation of disclosures in financial reports has hampered users' understanding of these reports. The reports by accounting bodies also indicate that these users prefer more concise financial reports. These findings, in conjunction with a dearth of recent questionnaire-based research on whether individual shareholders understand the content of financial reports, resulted in this study on whether individual shareholders understand the content of interim reports. The study provides empirical proof that a sound knowledge of business, accounting and economic matters is a prerequisite for understanding interim reports in the case of individual shareholders. The results of the study indicate that individual shareholders have a limited understanding of the content of interim reports as a whole, and that a good knowledge of business and economic matters and of accounting results in an improved understanding of the content of interim reports. In particular, specialisation in accounting in undergraduate and postgraduate degrees, professional qualifications, and work experience in the financial field improve the understanding of individual shareholders.

Information on financial flexibility is important to consider when projecting the cash flows of an enterprise. The level of financial flexibility can influence inter alia the risk profile, solvency and rate of return of an enterprise. At present, a gap exists between the informational needs of users and the actual information on financial flexibility presented in the financial statements. This paper suggests several improvements to the existing disclosure of this type of information. Problem facing the financial analystIt is generally accepted that for an enterprise to survive, prosper and grow in the present inflationary and recessionary economic environment, good control should be exercised over cash flows.