Chaos theory and financial statements

The purpose of this chapter is to show some applications of chaos theory to financial statements. Although chaos theory has been used in several financial topics, it is not usually involved with financial statements, which seem to remain impervious to it. To describe the analytical possibilities that chaos theory has in financial statements, a description of some features of chaos theory and their interest with regard to financial statements is made. Next, the application of chaos theory in a specific topic, such as the analysis of the accounting equation is presented. In addition, explanations of the possibilities of chaos theory in analyzing financial statements accounts and ratios, using several models of chaos theory, are provided. Finally the use of recurrence analysis is described to provide different perspectives on financial statements information. The intention is to create an interest in viewing financial statements as a complex information system.