Final answer:
Corporate annual reports typically include the audited financial statements such as the Income Statement, Balance Sheet, Statement of Changes in Stockholder's Equity, and the Statement of Cash Flows. These documents are crucial for corporate governance, which comprises the board of directors, auditing firms, and outside investors.
Step-by-step explanation:
The audited financial statements typically included in corporate annual reports are the Income Statement, the Balance Sheet, the Statement of Changes in Stockholder's Equity, and the Statement of Cash Flows (also known as the Sources and Uses of Cash Statement). These documents provide a comprehensive overview of a company's financial health and performance over the past fiscal year. They are essential for stakeholders, including the board of directors, the auditing firm, and outside investors, to evaluate the company's financial position and make informed decisions. In the context of corporate governance, the board of directors is the primary oversight body, elected by shareholders to oversee management. Auditing firms play a critical role in reviewing financial records and certifying their accuracy, which is crucial for maintaining investor confidence. Meanwhile, outside investors, particularly large institutional shareholders, rely on these audited financial statements to assess the viability and performance of their investments. In cases where corporate governance fails, like with Lehman Brothers, inaccurate financial information can mislead investors and have significant repercussions. Therefore, the accuracy and transparency of financial statements in annual reports are of paramount importance.