Importance of Notes to the Financial Statements

Prior to beginning work on this discussion, read the following:

• Chapter 1 in the textbook, which will provide a good overview of financial statements and the purpose of the notes section.
• The article Comments by the Auditing Standards Committee of the Auditing Section of the American Accounting Association on FASB Exposure Draft of Proposed Accounting Standard Update: Notes to Financial Statements (Topic 235): Assessing Whether Disclosures Are Material.
• The article Preparing Financial Statements: Balance Sheets.
• The article Understanding Key Financial Terms and Statements.

Explain the importance to investors and stockholders (owners) of the notes to the financial statements. Your explanation should include the content that should be in the notes as well as what the information communicates about the company. How might this information be integral to making business decisions?

Guided Response: Use at least two credible resources plus the textbook to support your statements. Write a minimum of 300 words in your initial post and respond to at least three classmates by the end of the week. Though three replies are the basic expectation for class discussions, for deeper engagement and learning you are encouraged to provide responses to any comments or questions others have given to you. Continuing to engage with peers and the instructor will further the conversation and provide you with opportunities to demonstrate your content expertise, critical thinking, and real-world experiences with this topic.