If your business is classed as a public company, you are required to publish quarterly financial statements that are available to the public. If your business is classed as a private company, then you are not obliged to make your financial statements public, you just have to file your tax returns with the secretary of state that your business is incorporated in.
If your business is a public company, then shares in your company are available for purchase. It also means that you owe transparency to your shareholders, i.e. the public. Large retirement funds and nonprofits may also be legally required to have audited financial statements. There can be advantages and disadvantages to running a public or private company. If your company is private, then you have the benefits of confidentiality, greater financial freedom, and an element of flexibility. On the other hand, if at any time you find yourself looking for outside help, either from a financial institution, angel investor or venture capitalist, you may run into difficulties securing their assistance without providing a complete financial picture of the company
Additionally, companies that issue financial statements often choose, or are obligated, to be audited by an independent auditor. This means that an independent examiner investigates your company’s financial information to prevent fraud. By law, public entities are required to have their financial reports audited, thanks to the US Securities and Exchange Commission. Other companies may choose to have their reports audited to lend credibility to their financial position.