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19.07.2022 - 15:54

Is the Internal Revenue Service (IRS) an internal or external user of financial statements? Explain.

Question:

Is the Internal Revenue Service (IRS) an internal or external user of financial statements? Explain.

Answers (1)

Rebecca April 14, 2023 в 20:19

The Internal Revenue Service (IRS) is an external user of financial statements. This is because the IRS is a government agency that is responsible for collecting taxes from individuals and businesses. As an external user, the IRS uses financial statements to evaluate the financial health of individuals and businesses to ensure compliance with tax laws. They do not have access to an organization's internal financial records or reports. Therefore, they rely on the financial statements released by external parties to make informed decisions about tax audits and investigations.

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