Financial Reporting
Financial reporting is the process of systematically documenting and communicating a company’s financial performance and position. It involves creating and presenting financial statements like the Balance Sheet (BS), Income Statement (IS) / Profit & Loss Statement (P&L), Cash Flow Statement (CF), Statement of Shareholders’ Equity (SE) which provide insights into a company’s financial health to both internal and external stakeholders.
The purpose of financial reporting is to provide stakeholders (including management, investors, lenders, and regulators) with accurate and timely information to assess a company’s financial status and make informed decisions.
Authorities For Further Research(i) The Financial Accounting Standards Board (FASB) sets accounting and reporting standards for public and private entities following Generally Accepted Accounting Principles (GAAP) in the U.S..
(ii) The Governmental Accounting Standards Board (GASB) establishes GAAP for U.S. state and local governments.
(iii) The International Accounting Standards Board (IASB) develops International Financial Reporting Standards (IFRS), used globally to enhance financial reporting.
(iv) The Federal Accounting Standards Advisory Board (FASAB) issues standards for the U.S. federal government.
(v) The Securities and Exchange Commission (SEC) has the authority to set and enforce accounting standards, particularly for public companies adhering to GAAP.
(vi) The Public Company Accounting Oversight Board (PCAOB) oversees audits of public companies.
State Boards of Accountancy regulate licensed accounting professionals within their states.
(vii) The American Institute of Certified Public Accountants (AICPA) develops standards for audits of nonpublic entities and sets ethical requirements for its members.
(viii) The National Association of State Boards of Accountancy (NASBA) coordinates state boards and promotes uniform regulations.
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