Final answer:
The major external users of governmental financial reports are taxpayers and bond-rating agencies, both of whom rely on these reports to understand governmental spending and creditworthiness.
Step-by-step explanation:
The major external users of governmental financial reports include both taxpayers and bond-rating agencies. These reports are important to taxpayers because they show how the government is spending taxpayers' money and the overall fiscal health of the governmental entity. Bond-rating agencies, on the other hand, use these reports to assess the creditworthiness of governmental entities which directly impacts the interest rates on bonds issued by the government.
When governments are borrowers in financial markets, they can issue various types of bonds, such as municipal bonds, state bonds, and Treasury bonds. Bond-rating agencies evaluate government-issued bonds to help investors understand the risks associated with these financial tools. Taxpayers have a vested interest in these reports as well to ensure that their tax dollars are being managed effectively.