What does the term "financial reporting" generally refer to?

The term "financial reporting" generally refers to the process of sharing financial information with stakeholders. This includes the preparation and dissemination of financial statements, such as the balance sheet, income statement, and cash flow statement, which provide important insights into an organization's financial position and performance. The primary goal of financial reporting is to ensure that various stakeholders, including investors, creditors, regulators, and management, have relevant and reliable information to make informed decisions regarding the entity's operations and financial health.

Financial reporting is a regulated process, often governed by accounting standards that ensure transparency, consistency, and comparability of financial information across different periods and entities. By providing stakeholders with timely and accurate financial data, companies can build trust and confidence, which is essential for maintaining strong relationships with investors and other parties interested in the business's financial status.

In contrast, tax filings pertain specifically to the documentation required for tax obligations and do not encompass the broader scope of financial reporting. Auditing of financial statements is a validation process that occurs after financial reporting, aimed at ensuring that the reported information is accurate and complies with applicable standards. Internal management assessments of revenue focus on internal performance evaluation rather than the external sharing of information, which is the essence of financial reporting.