Relevance of information presented in financial statements for external users

Abstract. Financial statements are an important source of information for different external users in determining and analyzing the financial health, profitability of the company, as well as various financial problems that it might face. However, not all the time the financial statements present enough information or the included one is irrelevant.

The purpose of this research is to understand the ways in which financial statements are useful for different external users such as investors, creditors, business partners, and governmental units.

Moreover, through the analysis of the full, simplified and abridged financial statements, we aim to determine which of these 3 types are the most suitable for external users, as all of them include different information.

Out of the 3 types of financial statements we currently use in the Republic of Moldova, the most exhaustive and useful is the complete one, as it provides information about the financial health of the entities from different point of view.

Nevertheless, there are some aspects, from the international practice, that national authorities should consider, such as: including information about interest rates on loans, the amount of depreciation of fixed assets, as well as information related to the compromised receivables and liabilities.