Fill in the blank: Financial statements typically include the balance sheet, profit and loss account, and ___.

Cash flow statement

What are the two types of users of financial statements and how do they differ?

Two types of users exist.

• Internal users include management.

• External users include investors.

• They use info for different decisions.

What is the role of the IASB and how does it differ from the FASB?

IASB develops global standards.

• Global focus by IASB.

• FASB targets U.S. standards.

• Both enhance reporting clarity.

Fill in the blank: The objectives of preparing financial statements include assessing creditworthiness and predicting ___ potential.

Earning

True or False: Financial reports are useful for predicting future business trends and challenges.

False. Financial reports primarily reflect past performance and do not provide insights into future trends.

What benefit does financial reporting provide in terms of capital raising?

Financial reporting aids organizations in raising capital by providing transparent and accurate financial information that builds investor confidence.

Fill in the blank: Financial reporting enhances decision-making by providing timely and ___ information.

Accurate

How does financial reporting contribute to corporate governance?

Financial reporting serves as a crucial aspect of corporate governance by ensuring transparency and accountability to various stakeholders.

What are the primary objectives of financial reporting as outlined by the International Accounting Standard Board (IASB)?

Objectives of Financial Reporting

• Inform financial position clearly.

• Show performance over time.

• Aid economic decision-making process.