Annual reports are prepared by a firm's management to:
A) communicate to its shareholders the firm's failures in the previous year.
B) provide a good overview of the firm's financial and operating performance.
C) highlight the performance of its chief competitors.
D) provide a forecast of the economy in the coming years.

Question

Quizplus · Accepted Answer

Annual reports are primarily prepared by a firm's management to provide a comprehensive overview of the firm's financial and operating performance for the previous year. The report includes financial statements, a discussion of the management's analysis of the company's performance, and highlights of achievements and challenges, among others. The report is designed to provide shareholders and other stakeholders with valuable information to make informed decisions about their investment in the company. The other options, such as communicating failures, highlighting competitors or forecasting the economy, are not the primary objectives of an annual report.

Annual Reports Are Prepared by a Firm's Management To