What aspect of compliance is financial reporting concerned with?

Financial reporting is primarily focused on ensuring that the information provided is useful to external users, such as investors, creditors, and regulatory agencies. This aspect of compliance involves adhering to established accounting standards and regulations that require transparency and accuracy in the financial statements. External users rely on this information to make informed decisions regarding their investments or lending.

The focus on external users distinguishes financial reporting from other forms of compliance that may cater to internal stakeholders, like management or employees. Financial reporting aims to provide a clear picture of an entity's financial health and performance, ensuring that outside parties can trust the information presented.