BUSINESS ADMINISTRATION
FINANCIAL MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Corporations are owned by stockholders. Therefore, the public needs informed about financial matters
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Requiring the public release holds the corporations accountable for reliability and honesty in the reporting of these financial records
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Releasing the records publicly forces each corporation to follow GAAP guidelines, which help the consumer easily compare companies and their progress or success
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All of the above
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Detailed explanation-1: -Financial reports provide basic information to people interested in the performance of an entity (the users). They allow the entity to be held accountable for how it manages and uses the money it receives.
Detailed explanation-2: -Financial reporting is important for management to make informed business decisions based on facts of the company’s financial health. Potential investors and banks will also use your company’s financial reporting to decide if they want to invest or loan you money.
Detailed explanation-3: -Publicly traded companies are required to release their earnings along with relevant financial statements to the public. This is so that the investing public and equity analysts can evaluate a company’s financial performance and future prospects.
Detailed explanation-4: -Public companies must produce annual reports to show their current financial conditions and operations. Annual reports can be used to examine a company’s financial position and, possibly, understand what direction it will move in the future.