Why is offering management commentary alongside the preparation of the financial statements a legal requirement in most countries when a company exceeds a certain size? In your answer, ensure to explain why narrative reporting such as the directors’ strategic report is offered from a capital providers’ perspective. Discuss with examples what insights can be drawn from the narrative reports which cannot be obtained from the financial statements. In your answer, also ensure to critically discuss the limitations of the narrative reporting and the potential causes of these limitations, yet even with these limitations why company law still considers this commentary important within the annual report.

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Management commentory is necessary alongside the prerparation of Financial Statements Management commentory is a section of public companys annual or quarterly filing Management Discussion and analysi... View the full answer