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1. When evaluating financial statements, why do we care about the industry? Why

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1. When evaluating financial statements, why do we care about the industry? Why is this part of the first steps of financial statement analysis?
2. Within the context of valuation methodology and disclosure, discuss the concepts of “Relevance” and “Representational Faithfulness”. In what circumstances might you have one, but not the other, or both? Could one have neither? Provide and discuss some examples of each scenario, as well as the risk and ramifications.

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