Question 4 The financial statement identify financial position, performance and changes in cash flows over a period. The main statements include the statement of financial position, the statement of comprehensive income and the statement of cash flows. These statements are intended to show how well a company has performed and give an indication of the value of the business. However, many accountants are of the opinion that the financial statement are of limited value to the users,

Required

a) Identify and discuss the limitation of financial statements.

b) Identify potential users of financial statements and their likely information needs.

c) State the underlying assumptions of financial statements as specified by "The Conceptual Framework for Financial Reporting (IASB CF).