What does the financial section of a CAFR include?

The financial section of a Comprehensive Annual Financial Report (CAFR) includes the basic financial statements and required supplementary information. This section typically encompasses several key components such as the statement of net position, statement of activities, fund financial statements, and any accompanying notes that clarify and expand on the figures and policies represented in the financial statements.

Including required supplementary information helps ensure that stakeholders have the necessary context and details to understand the financial position and results of operations. This information often includes details on funding progress for pension and other post-employment benefits, which are vital for assessing the fiscal health of a governmental entity.

The other choices focus narrowly on individual elements that do not encompass the full scope of what the financial section entails. For example, limiting the financial section to only the statement of activities would exclude essential financial statements and context provided by supplementary materials. Similarly, specifying only the notes to financial statements or focusing on introductory statements would overlook the broader reporting requirements that ensure transparency and accountability in governmental financial reporting.