What is financial reporting and why it is important to our investors?

Question

What is financial reporting and why it is important to our investors?

Answer 1

Financial reporting is a requirement to be a publicly owned company.  

it is important to investors because it is an indication of how your overall business is functioning.  It gives an investor an idea of if your earnings are inflated, what your EPS is, how volatile your business is, how well you will be able to handle fluctuations in the economy.  Without this information, your investors would be nothing but buying on guesses...which is what used to happen before the 1933 act started to change things (blue sky laws...blah blah blah)

Answer 2

It is the law that all public companies or companies to be listed as public must disclose certain information.

Securities Act of 1933

http://www.sec.gov/about/laws.shtml

Securities Act of 1934

http://www.sec.gov/about/laws.shtml#sece...

Investment Company Act of 1940 (mutual fund disclosures)

http://www.sec.gov/about/laws.shtml#invc...