Which statement is correct?
A)Financial reporting is the process of preparing information for internal parties.
B)Financial reporting involves issuing financial statements to external parties.
C)Financial reporting provides the same information as management accounting.
D)Financial reporting is based on rules issued by the CPA or IASB.

Question

Quizplus · Accepted Answer

Financial reporting involves the preparation and issuance of financial statements to external parties, such as investors, creditors, and regulatory bodies. The purpose of financial reporting is to provide information about a company's financial position, performance, and cash flows to help stakeholders make informed decisions. Financial reporting is separate from management accounting, which focuses on providing financial information to internal parties such as managers and employees. Additionally, financial reporting is based on various accounting standards and guidelines issued by organizations such as the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB), not just the CPA.

Which Statement Is Correct