Corporate financial reporting is the process of providing creditors, investors, authorities, and other external users with access to a company’s published financial statements and related data. When information is provided, it is not limited to financial statements when it comes to “financial reporting.”
Financial reporting has a wider scope than financial statements
Financial statements are one of the many tools used to convey information about the state and performance of the company’s finances. Corporate financial reporting are an essential part of financial reporting. They act as the primary means of disseminating accounting information to others outside of an organization. Even though the financial statements may include information from sources other than accounting records, the majority of the information for the financial statements comes from the elements of the financial statement i.e., assets, liabilities, revenues, expenses, and equity. A company’s financial statement consists of the balance sheet, statement of profit and loss or, if the business is non-profit, an income and expenditure account, cash flow statement, and explanatory notes. A statement of changes in equity will be included in a company’s financial statements if it must compile them in compliance with Standards.
For all intents and purposes, we refer to these as financial statements. Financial reporting includes financial statements as well as other channels for exchanging information. Financial reporting techniques other than general purpose financial statements may be used by management to share information with third parties when a regulatory rule demands it or when they voluntarily share information they think will be helpful to those outside the company.
These data can be found in a variety of formats and pertain to a broad range of subjects, such as capital investment plans, new product launches, financial projections, and new clients added to IT companies. The importance of voluntary disclosure, or disclosure made in excess of what is mandated by law, in financial reporting has increased recently.