What type of reports are generated for compliance purposes in tax management?

Statutory financial reports are specifically designed to comply with legal and regulatory requirements imposed by government authorities. These reports provide a comprehensive view of a company's financial status and performance, ensuring that all relevant financial information is available for regulatory bodies, stakeholders, and the public. In the context of tax management, these reports include necessary details about income, expenses, and taxes owed, thus facilitating accurate tax reporting and compliance with jurisdictional laws.

Profit-loss statements primarily focus on operational performance over a specific period and do not necessarily fulfill compliance requirements for taxation. Similarly, inventory valuation reports center on the valuation of stock and do not address tax-related compliance directly. Sales forecast reports provide projections about future sales, which can aid in planning but are not historical records necessary for regulatory compliance. Statutory financial reports therefore stand out as essential tools for ensuring adherence to tax laws and regulations.