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What is the objective of financial reporting?

Explain the objective of financial reporting and the characteristics which assist in attaining this objective. This is for business finance yes, my husband and i are starting a new business from home

Public Comments

1. I assume you mean financial reporting for a business not your own personal finances. First, you need to do this for income tax purposes to determine your profit or loss. Second, if you wish borrow money from a lender they will demand it. Finally, how else will you know if you are makng money. Fred
2. An organisation has various linkages in society like farmers, customers, stakeholding public, government etc. To disseminate performance and compliance of varoius laws and corporate governance, financial reporting consists of periodic reporting of the above.
3. Financial reporting involves standardized measures of the financial condition, profitability and cash flows of a business enterprise. They assist the owners of an enterprise to understand how the business is doing. It is information also important to potential investors and to creditors of a business. It enables those parties to evaluate whether it is worthwhile to invest in or extend credit to an enterprise. Without that information, no reasonable investor or lender would have anything to do with an enterprise. Public companies are required to file this information in a manner certified by independent accountants. This helps ensure the integrity of the public securities markets, so that all investors operate with equivalent information.