FINANCIAL ACCOUNTING

While management accounting is listening carefully primarily on internal processes, financial accounting is concerned with the reporting and communication of a business's economic information to outer stakeholders:  shareholders, creditor's regulators, and governmental tax authorities.  Publicly held companies must prepare and report financial statements every quarter and also must file detailed reports annually as well as whenever there is a significant event (as defined by law). There are, of course, common rules that all businesses must follow in reporting their financial in sequence. Companies must arrange their financial statements according to regulations known as usually established secretarial principles (GAAP), which are shaped by the Financial Accounting Standards Board (FASB) and compulsory by the Securities Exchange Commission (SEC) in the United States, and by governmental tax agencies. As a financial accounting, consequence tends to be a rule-driven discipline, and financial accountants use thorough rules and procedures to generate a business's required financial statements. The benefit of such a process is that the economic presentation of many different businesses is comparatively easy to compare. Thus you can use financial statements to analyze a company's presentation over time and to contrast it to other organizations.