What is the primary goal of financial reporting?

The primary goal of financial reporting is to offer accurate and relevant financial information to stakeholders. This includes not only investors but also creditors, regulators, and other interested parties who need to understand the financial health and performance of a business.

Accurate and relevant reporting allows stakeholders to make informed decisions regarding investments, credit, regulatory compliance, and strategic planning. Financial statements such as balance sheets, income statements, and cash flow statements are designed to provide a clear view of a company's financial position, performance, and changes in financial condition over time.

This emphasis on accuracy and relevance is fundamental to maintaining transparency and trust in financial markets, facilitating better economic decision-making, and ultimately contributing to a more stable financial environment.