Question

State whether the following statement is True or False.

The only purpose of financial reporting is to keep the managers informed about the progress of operations.

Answer 1

This statement is false.

Explanation:

Financial reporting is not only for managers; it serves many users shareholders, investors, creditors, employees, government agencies and others by providing information for decision‑making, stewardship, assessing liquidity, profitability and comparability of performance, so its purpose is broader than merely keeping managers informed.