Financial reporting involves the process of preparing financial statements that summarize an organization's financial performance and position. These statements are crucial for stakeholders to assess the health and performance of the business.

The main financial statements include the balance sheet, income statement (or profit and loss statement), statement of cash flows, and statement of changes in equity. Each provides different perspectives on the financial health of a company.

Financial accounting focuses on external reporting to investors, regulators, and other stakeholders, following generally accepted accounting principles (GAAP). Management accounting, on the other hand, is used internally by management to make operational decisions and plan for the future.

GAAP (Generally Accepted Accounting Principles) are a set of accounting standards and rules used primarily in the United States. IFRS (International Financial Reporting Standards) are standards developed by the International Accounting Standards Board (IASB) and are used in many countries outside the U.S.

An auditor examines a company's financial statements and accounting records to ensure they are accurate and comply with relevant accounting standards and regulations. This independent review provides assurance to stakeholders about the reliability of the financial information.

Accrual accounting records revenues and expenses when they are earned or incurred, regardless of when cash transactions occur. It provides a more accurate picture of a company's financial performance and position over time.

Financial statement analysis involves assessing a company's financial health, profitability, liquidity, and solvency using tools like ratio analysis, trend analysis, and comparative analysis.

Financial ratios such as liquidity ratios (e.g., current ratio), profitability ratios (e.g., return on equity), and efficiency ratios (e.g., inventory turnover) are commonly used to analyze a company's financial performance and health.

The accounting cycle includes several steps: identifying transactions, journalizing, posting to the ledger, preparing a trial balance, adjusting entries, preparing financial statements, closing entries, and post-closing trial balance.