1. (Objectives of Financial Reporting) Karen Sepan, a recent graduate of the local state university, is presently employed by a large manufacturing company. She has been asked by Jose Martinez, controller, to prepare the company's response to a current Preliminary Views published by the Financial Accounting Standards Board (FASB). Sepan knows that the FASB has issued seven Statements of Financial Accounting Concepts, and she believes that these concept statements could be used to support the company's response to the Preliminary Views. She has prepared a rough draft of the response citing Statement of Financial Accounting Concepts No. 1, "Objectives of Financial Reporting by Business Enterprises." Instructions

(a) Identify the three objectives of financial reporting as presented in Statement of Financial Accounting Concepts No. 1 (SFAC No. 1).

(b) Describe the level of sophistication expected of the users of financial information by SFAC No. 1.(CMA adapted)