Financial accounting focuses on producing financial reports for external users — investors, creditors, regulators, and the public. It follows standardized rules (GAAP or IFRS) to ensure consistency and comparability.
The main outputs are the income statement, balance sheet, cash flow statement, and statement of equity. These four statements together give a complete picture of a company's financial health.
Unlike management accounting (which is internal and flexible), financial accounting is strict, standardized, and historical. Public companies are legally required to produce audited financial statements.