From David H. Marshal and Wayne W. McManus.  Accounting. What numbers mean.

Financial accounting generally refers to the process that results in the preparation and reporting of financial statements for an entity. As will be explained in more detail, the financial statements present the financial position of an entity at a point in time, the results of the entity's operations for some period of time, the cash flow activities for the same period of time, and other information about the entity's financial resources, obligations, owners' interests, and operations.

Financial accounting is primarily externally oriented. The financial statements are directed to individuals who are not in a position to be aware of the day-to-day financial and operating activities of the entity. Financial accounting is also primarily concerned with the historical results of an entity's performance. Financial statements reflect what has happened in the past, and although readers may want to project past activities and their results into future performance, financial statements are not a clear crystal ball.

Bookkeeping procedures are used to accumulate the results of many of an entity's activities, and these procedures are part of the financial accounting process. Bookkeeping procedures have been thoroughly systematized using manual, mechanical, and computer techniques, and although these procedures support the financial ac­counting process, they are only a part of the process.

Financial accounting is done by accounting professionals who have generally earned a bachelor of science degree with a major in ac­counting. The financial accountant is employed by an entity to use her/his expertise, analytical skills, and judgment in the many activi­ties that are necessary for the preparation of financial statements. The title controller is used to designate the chief accounting officer of a corporation. The controller is usually responsible for both the financial and managerial accounting functions (see below) of the organization. Sometimes the title comptroller (the Old English spell­ing) is used for this position.

An individual earns the Certified Public Accountant (CPA) pro­fessional designation by passing a comprehensive four-part examina­tion taken over a two-day period. A uniform CPA exam is given nationally during May and November each year, although it is admin­istered by individual states. Some states require that candidates have accounting work experience before sitting for the exam. More than 30 states have enacted legislation requiring CPA candidates to com­plete a minimum of 150 semester hours of college study before becoming eligible to sit for the exam. This national trend to increase the educational requirements for CPA candidates reflects the in­creasing demands placed on accounting professionals to be both broadly educated and technically competent. Practicing CPAs work in all types of organizations, but as explained later, a CPA who expresses an auditor's opinion about an entity's financial statements must be licensed by the state in which she/he performs the auditing service.