Investors and analysts must have certain capabilities regarding financial reporting which include: ________

an understanding of current financial reporting standards.
recognition that management selects the financial reporting standards used.
an ability to recognize that financial statement information reported is grounded in judgment as well as facts

This is further explained below.

What is financial reporting?

Financial reports are used by businesses to compile accounting data and present their current financial situation.

Accounting, also spelled as financial reporting, is the process by which monetary and nonmonetary data about economic entities like businesses and corporations are quantified, processed, and communicated.

An investor is an individual or group that contributes to the funding of a financial project.

In conclusion, Investors and analysts must have certain capabilities regarding financial reporting which include:

an understanding of current financial reporting standards.
recognition that management selects the financial reporting standards used.
an ability to recognize that financial statement information reported is grounded in judgment as well as facts