Which statements represent a company's primary means of communicating information to external users?

• A. Internal audit reports
• B. Board meeting minutes
• C. Management discussion and analysis
• D. Financial statements

Answer: (D)

Verified step by step guidance

1. Understand the purpose of financial statements: Financial statements are the primary means by which a company communicates its financial performance and position to external users, such as investors, creditors, and regulatory agencies.
2. Differentiate between internal and external communication: Internal audit reports and board meeting minutes are used for internal purposes and are not typically shared with external users. These documents are meant for internal decision-making and governance.
3. Recognize the role of management discussion and analysis (MD&A): While the MD&A provides valuable context and insights into a company's financial performance, it is supplementary to the financial statements and not the primary means of communication.
4. Identify the components of financial statements: Financial statements include the income statement, balance sheet, statement of cash flows, and statement of changes in equity. These documents provide a comprehensive view of a company's financial health.
5. Conclude that financial statements are the correct answer: Financial statements are standardized, audited, and designed specifically to communicate financial information to external users in a clear and consistent manner.