What is defition of financial accounting?

Financial accounting is the art of preparing and presenting financial information about a firm to users outside the firm. This information is usually presented in the form of financial statements (Balance Sheet, Income Statement, Statement of Cash Flows, etc). This information helps various stakeholders such as current and potential shareholders, current and potential creditors, and professional analysts make various decisions about what direction the firm is heading in and what their decisions relative to the firm should be. I always raise the caution that historical financial information should NOT be the only factor used in making investment decisions (just because a firm was profitable for the last three years does not mean it will stay profitable). However, accounting information, in conjunction with various market and industry analyses, is a useful tool when making these decisions.