Objectives and purposes of financial analysis: an approach based on user heterogeneity and decision-making

Abstract

There is a general consensus in the financial literature that the main objectives and purposes of financial analysis are to interpret, evaluate and transform accounting information into useful data for economic and financial decision-making (AICPA, 1973; IASB, 2018). However, within this utilitarian approach, a fundamental problem persists: the heterogeneity of users of financial information and their potentially conflicting interests. From a theoretical perspective, financial analysis cannot be understood as a neutral process, but rather as an instrument conditioned by the specific objectives of financial users, such as investors, creditors, administrators, and regulators (Penman, 2013; Palepu et al., 2020). In this sense, the central problem lies in the fact that there is no single, universal objective or interest, but multiple objectives and interests derived from the diversity of users