Financial Reporting

Definition

Financial reporting refers to the reporting of the financial activities of a business, or other entity, to stakeholders of the entity or business. The stakeholders are often referred to as 'users.'

Overview

The reports produced for the users are the end product of a financial reporting, or accounting, system. This involves the recording and summarising of the business or entity's transactions and events so that the financial activities can be reported in a format that is useful to the stakeholders of the business or entity.

In order to understand the financial reporting process it is important to consider:

• the context and purpose of financial reporting,
• the importance of a financial reporting framework,
• the design of financial reporting systems,
• how the financial systems are controlled, and
• how to interpret financial reports.

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