alleryStart learning →Which firms must include a statement of cash flows in their financial reports to shareholders?
AOnly firms with foreign operations
BAll publicly traded firms
COnly firms with long-term debt
DOnly firms audited by the Big Four
Answer & Solution
Correct answer: B. All publicly traded firms
1. All publicly traded firms must include a statement of cash flows in the financial reports they send shareholders.
2. The requirement turns on being publicly traded, not on debt, auditor or overseas operations.
3. Creditors and investors want it because they are keenly interested in how much cash a business generates and how it is used.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.6 The Statement of Cash Flows_
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