Financial accounting is a branch of accounting where businesses are required to keep their financial transactions. These transactions are recorded, summarized and presented in the form of statements called financial statement or financial report and income statement or a balance sheet.
In United States, these documents can be prepared according to the generally accepted accounting principles (GAAP). Financial reports are prepared for use by external customer like investor, banker and internal customers like company shareholders and employees.
According to the Securities and Exchange Commission (SEC), a publicly traded company is required to file financial reports every quarter. The purpose of filing these documents is not to report the value of company but to provide sufficient information’s to others to assess the value of company.