Who needs financial statements?
All organizations, whether privately held, publicly owned or nonprofit, prepare reports on their financial performance. Such reports help owners and managers make business decisions, enable creditors to evaluate loan applications, and provide individuals with information to make investment decisions. Different entities have different accounting needs; therefore, the accounting profession has developed standards that enable CPA’s to offer a range of services designed to meet these varying needs. Financial statements present financial information derived from an entity’s accounting records. They are intended to provide information regarding the entity’s economic resources and obligations on a specific date, as well as the entity’s activities for a period of time. Financial statements are usually prepared in accordance with generally accepted accounting principles (GAAP), which are the standards issued by the American Institute of Certified Public Accountants, but they may also be prepare
