Problem:
According to SFAC No. 1, financial statements should provide information that is useful for investor decision making. Paragraph 37 of SFAS No. 1 states that financial reporting should provide information to help users assess the amounts, timing, and uncertainty of prospective cash flows. Paragraph 43 of SFAC No. 1 states that the primary focus of financial reporting is information about an enterprise's performance provided by measures of earnings and its components.
1. Present arguments that the statement of cash flows, not the income statements, is the most important financial statement to prospective investors.
2. Present arguments that the income statement, not the statement of cash flows, is the most important financial statement to prospective investors.