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 CICA or IASB.

Question

Quizplus · Accepted Answer

Financial reporting involves preparing and issuing financial statements to external parties such as investors, creditors, and regulators. It is different from management accounting, which focuses on providing financial information to internal parties for decision-making purposes. Financial reporting must adhere to accounting standards issued by the relevant governing bodies such as the International Accounting Standards Board (IASB) or the Canadian Institute of Chartered Accountants (CICA).

Which Statement Is Correct