Financial reporting is the process of producing statements that disclose an organization's financial status to management, investors and the government.
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In the United States, the four basic reports are balance sheets, income statements (also referred to as profit and loss statements), cash flow statements and statements of shareholders' equity.
All public companies in the U.S. are mandated by the Securities and Exchange Commission (SEC) to tag financial statements using eXtensible Business Reporting Language (XBRL). While the deadline is still a moving target, the United States is currently working to merge the Generally Accepted Accounting Standards (GAAP) with the International Financial Reporting Standards (IFRS) to create new financial reporting standards.
While financial statements can be compiled using Microsoft Excel, experts recommend automating the financial reporting process by either using an enterprise resource planning (ERP) system's finance module or industry-specific financial reporting software. Most specialty products include an XBRL tagging engine, which analysts say reduces manual labor.