Activity 1.14 c) Which of the following groups of users would primarily be interested in a company's annual published financial statements?

Question

BlackTom AI · Accepted Answer

In this question, we must evaluate which group would primarily be interested in a company’s annual published financial statements.
Option a: 'a. Shareholders and general public' — This is a strong candidate because annual financial statements document the company’s financial performance and position, which are of primary interest to current and potential investors (shareholders) and also to the general public who may rely on these statements for information about the company’s integrity and performance.
Option b: 'b. Management and employee' — While management and employees do use financial statements for internal planning, budgeting, and performance assessment, they are typically more concerned with internal reports, budgets, and management accounting data. The annual financial statements themselves are externally oriented and not primarily aimed at internal staffing of reports.
Option c: 'c. Shareholders and suppliers' — Shareholders indeed care about the financial statements, but suppliers are more concerned with a company’s creditworthiness and ability to pay, which they gauge through financial analyses and credit terms rather than the published annual statements as their primary source. While they may consult them, they are not the group most expected to be primarily interested.
Option d: 'd. Environmental pressure groups and general public' — Environmental groups and the general public may be interested in a company’s environmental impact and broader corporate behavior, but the annual financial statements focus on financial results and position, not primarily on environmental or social disclosures. These groups would typically turn to sustainability reports or CSR disclosures for that information.
Overall, the core purpose of annual financial statements is to provide financial information about the company to investors and the public at large, aiding investment and governance decisions. The other groups may use the statements, but they are not the primary audience for these documents.

MCD2150 - T2 - 2025 Week 1 Workshop 2 Quiz

Activity 1.14 c) Which of the following groups of users would primarily be interested in a company's annual published financial statements?

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