The objective of financial reporting is to
A)provide information to the Canada Revenue Agency.
B)provide financial information that is useful to existing and potential investors, lenders and other creditors.
C)comply with Accounting Standards for Private Enterprises.
D)comply with International Financial Reporting Standards.

Question

Quizplus · Accepted Answer

The objective of financial reporting is primarily to provide financial information that is useful to existing and potential investors, lenders, and other creditors in making decisions related to their investments, loans, and credit arrangements with the entity. While compliance with accounting standards and international reporting standards is important, it is not the primary objective of financial reporting. Similarly, although financial reporting may assist in tax compliance, providing information to the Canada Revenue Agency is not the objective of financial reporting.

The Objective of Financial Reporting Is to