Financial reporting is the systematic process of communicating a company's financial performance and position to external stakeholders, such as investors, creditors, regulators, and the public. It involves preparing and presenting financial statements, including the balance sheet, income statement, and cash flow statement, along with accompanying notes and disclosures. Financial reporting adheres to accounting standards, such as GAAP or IFRS, ensuring transparency, consistency, and comparability of financial information. Accurate and reliable financial reporting enhances trust, facilitates investment decisions, and fosters a clear understanding of a company's financial health and prospects.