What is the obligation of corporations regarding financial reporting?

The obligation of corporations regarding financial reporting primarily involves the requirement to prepare and disclose financial statements on an annual basis. This obligation ensures that stakeholders, including shareholders, creditors, and regulatory bodies, have access to a corporation's financial health and performance over a comprehensive period.

Annual financial statements typically include the balance sheet, income statement, cash flow statement, and notes to the financial statements. These documents provide a complete view of the company's financial situation, allowing stakeholders to make informed decisions regarding investments, lending, and other financial interactions with the corporation.

While some corporations may choose to disclose additional quarterly financial statements or semi-annual reports for greater transparency, the fundamental requirement set forth in the Revised Corporation Code emphasizes the need for annual disclosures. This establishes a standard for accountability and helps maintain the integrity of financial reporting within the corporate structure.