QUESTION 1 The financial statements identify financial position, performance and changes in cash flows over a period. The main statements include the statement of financial position, the statement of comprehensive income and the statement of cash flows. These statements are intended to show how well a company has performed and give an indication of the value of the business. However, many accountants are of the opinion that the financial statements are of limited value to the users. You are required to: A). Identify and discuss the limitation of financial statements. B). Identify potential users of financial statements and their likely information needs. C) State the underlying assumptions of financial statements as specified by "The Conceptual Framework for Financial Reporting (IASB CF).

QUESTION 1 The financial statements identify financial position, performance and changes in cash flows over a period. The main statements include the statement of financial position, the statement of comprehensive income and the statement of cash flows. These statements are intended to show how well a company has performed and give an indication of the value of the business. However, many accountants are of the opinion that the financial statements are of limited value to the users. You are required to: A). Identify and discuss the limitation of financial statements. B). Identify potential users of financial statements and their likely information needs. C) State the underlying assumptions of financial statements as specified by "The Conceptual Framework for Financial Reporting (IASB CF).

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter1: Accounting And The Financial Statements

Section: Chapter Questions

Problem 16CE: Cornerstone Exercise 1-16 Financial Statements Listed below are elements of the financial...

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