In fact one could say that the financial statement is the summary of the whole year’s performance. In addition, financial statements can be presented for individual subsidiaries or business segments, to determine their results at a more refined level of detail. 8. Financial statements are important for many reasons, but here are three significant reasons. But let's face it, the financial statements of some firms are designed to hide rather than reveal information. The importance of auditing cannot be overstated. Unfortunately, financial reporting sometimes falls short of both legal and ethical standards. In short, the financial statements have a number of purposes, depending upon who is reading the information and which financial statements are being perused. On April 3, 2020, the Office of the Chief Accountant (OCA) issued a statement regarding the importance of high-quality financial reporting in light of the significant impacts of COVID-19. Financial Reporting Executive Committee (FinREC) is an AICPA technical committee for financial reporting. The importance of our longstanding public-private financial reporting arrangement cannot be overstated in its positive impact to the commission and the PCAOB’s ability to carry out our respective legislative mandates. In India, companies are required to present their financial statements according to the Companies Act, 1956. Importance of Auditing: 6 Reasons Why You Should Audit Your Financial Statements. Financial reporting is governed by statutory and common law, and it should be done according to ethical standards. Its mission is to determine the AICPA’s technical policies regarding financial reporting standards and to be the AICPA’s spokesbody on those matters, with the ultimate purpose of serving the public interest by improving financial reporting. Financial reporting can be an important step for a business. Financial statements tell you the performance and the value (sort of) of your company. Introduction. Financial statements have got the highest importance for any sort of business. Financial Statements should comply with the legal requirements if any, as regards form, contents, and disclosures and methods. These standards and requirements for accounting and financial reporting often change, so … Proper Financial Reporting … Here you’ll discover why financial reporting is important for your company. So what is financial reporting As a company we all have different views on how we would like our reports to look but the basic information they contain is the same for every company. Financial statements are important to investors because they can provide enormous information about a company's revenue, expenses, profitability, debt load, and … While it can provide many benefits, a lot of business owners fail to report their finances regularly. 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