37 The reliability, relevance and trustworthiness of financial statements
Why we need financial information
Financial information is used to make decisions. Financial statements are thought of by many (if not most) people, whether they are investors or non-investors, to be the primary source of financial information about a business or company. Therefore, it may be surprising to learn that, despite their perceived importance, financial statements have a number of significant limitations.
Whether you are an investor, customer, employee, creditor or other stakeholder, it is important to be aware of the limitations, when making decisions based on financial statements.
A focus on the past and not the future
Financial statements focus on the past ...
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