Who typically requires financial statements with assurance?

The correct answer is that third-party users such as investors and banks typically require financial statements with assurance. These stakeholders rely on financial statements to make informed decisions regarding investments, lending, and credit assessments. The assurance level provided in these financial statements means that an independent auditor has reviewed and verified the accuracy and completeness of the information, giving greater confidence to external users.

The need for assurance is particularly pertinent for investors and banks because they often base their financial commitments on the reliability of the financial data presented. They require an objective assessment that the financial statements reflect a true and fair view of the organization’s financial position and performance to mitigate their risk.

Internal management may use financial statements to guide decisions, but they often have access to internal financial data and reports and may not require the same level of external assurance. Government agencies do have specific reporting requirements, but their need for assurance can vary depending on the nature of the agency and regulations in place. Financial analysts also utilize financial statements for their evaluations, but they typically work with the information provided rather than needing assurance in the same way that investors and banks would.