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Describe the objectives of financial reporting and its role in the economy.

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The expert describes the objectives of financial reporting and its role in the economy.

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Objectives of financial reporting:

In the United States, the objectives of financial reporting are defined in the Statement of Financial Accounting Concepts (SFAC) No. 1 as to provide information useful for making economic decisions (FASB 1978, art. 34). This is defined more closely as information useful to investors and creditors and other users in making rational investment, credit, and similar decisions and for predicting, comparing, and evaluating potential cash flows to them in terms of amount, timing, and related uncertainty.

FASB (1978, ...

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Sandeep Bardia, MBA
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  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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