List and explain the objective of financial accounting?

Question: List and explain the objective of financial accounting?

The main objective of financial accounting is providing information about an organization’s performance and financial position, enabling the users to make informed decisions. The objectives of financial accounting include the following: 

1. To provide a record of past financial operations of a company which can be used as a basis for analysis, comparison, and forecasting of future activities.

2. To provide relevant information to help external users take decisions such as granting loans and investing in shares of the company. 

3. To ensure that taxes are calculated, declared and paid timely.

4. To provide stakeholders such as investors, creditors and employees with transparent information about the financial status and operations of the company. 

5. To enable owners to decide whether current operation strategies and expenditure levels are satisfactory and make corrective measures, if required. 

6. To meet legal and regulatory requirements. 

7. To help external audit confirm and verify the accuracy of annual financial reports.

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