Financial statements are the .................... annual reports through which the corporate management communicates financial information to its owners and various other external parties.

Both options 1 and 2

Option 1- Basic
Option 2- Formal
Option 3- Informal
Financial statements are the basic and formal annual reports through which the corporate management communicates financial information to its owners and various other external parties which include investors, tax authorities, government, employees, etc. These refer to: the balance sheet (position statement) as at the end of accounting period, the statement of profit and loss of a company and the cash flow statement.