7/25/2019 IT5 HW prt2

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2. The law dictates management’s responsibility for providing

stewardship information to external parties. This reporting obligation

is met via the FRS. Much of the information provided taes the form of 

standard !nancial statements" tax returns" and documents re#uired

by regulatory agencies such as the Securities and $xchange

%ommission &S$%'.

 The primary recipients of !nancial statement information are external

users" such as stocholders" creditors" and government agencies.

(enerally speaing" outside users of information are interested in the

performance of the organi)ation as a whole. Therefore" they re#uire

information that allows them to observe trends in performance over

time and to mae comparisons between di*erent organi)ations. (iven

the nature of these needs" !nancial reporting information must be

prepared and presented by all organi)ations in a manner that is

generally accepted and understood by external users.