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These reports also allow the company to communicate their financial information to the public through financial reporting process. They are used because it allows the stockholders to have a glance at the company and to see whether or not there was a profit or loss. “The central feature of external financial reporting is a set of four financial statements: (1) an income statement, (2) a statement of changes in equity, (3) a balance sheet, and (4) a statement of cash flows” (Edmonds, Edmonds, McNair, & Olds, 2006, p. 9). Each of these financial statements has been organized into different categorizing elements...
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