In this section:
Financial reports impact businesses, especially the financial and managerial accounting needs of organizations. Organizations may need financial reports to describe their financial condition and provide a framework for examining past performance, current financial situations, possible future performance, and the financial positions and performances of various employees, groups, and departments within and outside of these organizations. Organizations may require reports that describe their financial position at a particular point in time and their financial performance during a specified range of time.
Internally, financial reports may be required by various levels of managers within the organization to evaluate and make decisions about current and future operations. The reports may require highly detailed or summarized financial information, depending on management requirements for decision making. These internal financial reports may include sales reports, production cost reports, or other detailed financial reports.
Externally, financial reports may be required by people or agencies outside the organization who have an interest in the business activities of that organization. For example, suppliers, lenders, investors, and government agencies may need to access the financial status of a business for any number of reasons. External financial reports may include balance sheets, income statements, or cash flow statements.