Objectives of Financial Accounting

Financial accounting is a branch of accounting that deals with the preparation of financial statements and reports to provide information to various stakeholders. The main objective of financial accounting is to provide accurate and reliable information about an organization's financial position, performance, and cash flow.

1. To provide financial information to external stakeholders: Financial accounting provides financial information to external stakeholders such as investors, lenders, regulators, and the general public. This information helps them in decision-making and assessing the organization's financial performance.
   
   
2. To comply with legal and regulatory requirements: Financial accounting is governed by various laws and regulations that organizations must comply with. The objective of financial accounting is to provide information that complies with these laws and regulations.
   
   
3. To assist management in decision-making: Financial accounting provides information to management that can be used for planning and control purposes. Management can use this information to make informed decisions about the future direction of the organization.
   
   
4. To maintain historical records: Financial accounting provides a historical record of an organization's financial transactions. This information can be used to identify trends, patterns, and opportunities for improvement.
   
   
5. To provide a basis for tax computation: Financial accounting provides information that is used to calculate an organization's tax liability. This information is used by tax authorities to determine the amount of tax owed by the organization.
   
   
6. To facilitate comparison and analysis: Financial accounting provides information that can be used for comparison and analysis purposes. This information can be used to compare an organization's financial performance with that of its competitors, industry peers, and over time.
   
   

In conclusion, the objectives of financial accounting are to provide accurate and reliable financial information, comply with legal and regulatory requirements, assist management in decision-making, maintain historical records, provide a basis for tax computation, and facilitate comparison and analysis.