Final answer:
The statement is false as an annual report contains more than just financial statements and notes to the financial statements. It also includes sections like a letter from the CEO, business overview, management's discussion and analysis, auditor's report, and supplementary information.
Step-by-step explanation:
The statement that a firm's annual report contains only two pieces of information: the financial statements and the notes to the financial statements, is false. An annual report typically includes a variety of components such as a letter from the CEO, a business overview, financial statements, notes to the financial statements, management's discussion and analysis (MD&A), auditor's report, and other supplementary information.
The financial statements are the core of an annual report, providing a quantitative look at the company's financial health, including the balance sheet, income statement, and cash flow statement. The notes to the financial statements offer additional context and detail to the figures presented in the financial statements. Furthermore, MD&A provides management's perspective on the financial results and other factors that may affect future performance. This full spectrum of information caters to investors, creditors, and others by providing a comprehensive view of the company's activities and financial position beyond the immediate fiscal metrics.