what is financial reporting

Financial reporting is the process of reviewing and analyzing financial data on a monthly, quarterly, or yearly basis to drive better business performance and results. The main goal of financial reporting is to help finance, business partners, department leaders, and stakeholders make strategic decisions about a company's operations, growth, and future profitability based on its overall financial health and stability. Financial reporting aims to track, analyze, and report a business's income, resource usage, cash flow, assets, liabilities, and owner's equity to assess its financial health and growth potential. Financial reports must comply with tax regulations and financial reporting criteria established by the International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) in the US. Financial reporting is important for both external and internal stakeholders, such as regulatory agencies, tax authorities, investors, lenders, and senior company management, to evaluate a company's financial health and earnings potential