The primary objective of external financial reporting is:
A)to enhance the ability of the company to acquire financial capital from external sources.
B)to accurately provide financial results for tax purposes.
C)to comply with external regulations and requirements of government and professional associations.
D)to provide useful information to decision makers,especially investors and creditors.

Question

Quizplus · Accepted Answer

External financial reporting is primarily aimed at providing useful information to decision-makers, such as investors and creditors. While complying with regulations and acquiring financial capital are important functions of financial reporting, the primary objective is to help stakeholders make informed decisions about the company. Providing financial results for tax purposes is not the primary objective of external financial reporting, as there are other internal accounting processes for that purpose.

The Primary Objective of External Financial Reporting Is