External reporting

External reporting is the issuance of financial statements to parties outside of the reporting entity. The recipients are usually investors, creditors, and lenders, who need the information to evaluate the financial condition of the reporting entity. At its most formal level, external reporting involves the issuance of a complete set of audited financial statements, which include an income statement, balance sheet, and statement of cash flows. The recipients may allow the issuance of unaudited financial statements for interim periods.

The most elaborate external reporting is conducted by publicly-held companies, which must issue the annual Form 10-K and quarterly Form 10-Q to the Securities and Exchange Commission. The reporting requirements for these forms are extremely detailed.