Question

Investors and analysts must have certain capabilities regarding financial reporting which include:_________

Answer 1

The capabilities of Investors and analysts regarding financial reporting  include an awareness of financial reporting standards .

A knowledge of financial reporting standards, which is wider than knowledge of particular accounting rules, will let an observer to assess the valuable insinuation of financial statement elements and transactions.

The main objective of financial reporting is to furnish financial information about the reporting organization that is useful to existing and possible lenders,investors and other creditors in taking decisions about supplying resources to the organization.

Financial reporting needs policy options and calculations. These options and calculations need judgment, which can differ from one trainer to the next. Therefore, standards are needed to confirm increasing stability in these judgments.

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