What is the primary purpose of general-purpose financial statements?

The primary purpose of general-purpose financial statements is to satisfy the fiduciary reporting responsibility of management. These statements are designed to provide relevant financial information to a wide range of users, including investors, creditors, and the public, enabling them to make informed decisions about the economic resources and obligations of an enterprise.

General-purpose financial statements serve as a reliable source of information about the financial position, performance, and cash flows of an organization, reflecting its accountability to those stakeholders. This information is crucial for assessing the entity’s financial health, operational efficiency, and ability to generate cash flows, which ultimately supports accountability and decision-making.

In contrast, the other options focus on more specific audiences or purposes that do not encompass the broader scope intended for general-purpose financial statements. For example, while they may be useful to government regulators, the primary focus is not solely to meet regulatory needs. Similarly, general-purpose financial statements are not meant exclusively for internal management purposes nor to be used as marketing tools for financial products. Their overarching aim is to provide useful financial information to a diverse audience for various economic decision-making processes.