Financial Statements
Users of Financial Information
Published financial information must be in compliance with the established accounting guidelines because outside users will rely on it to make a variety of decisions. These rules and standards are in place to protect outside users by ensuring that the information is accurate and useful and can be understood by everyone.
Because so many people are using the financial information and they are using it for so many diverse purposes, the reasons that people need the financial information are also diverse, such as to:
• Make investment decisions.
• Extend credit or not.
• Assess areas of strength and weakness within the company.
• Evaluate performance of management.
• Determine whether or not the company is in compliance with regulatory requirements.