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Financial Statements, as part of Engagement Letters in the context of External Audit within Accounting Principles for a Business, refer to the documents that outline a company's financial performance and position. These statements include the balance sheet, income statement, cash flow statement, and statement of changes in equity, which provide an overview of a company's assets, liabilities, revenue, expenses, and cash movements during a specific period. The financial statements are crucial for stakeholders to make informed decisions about the business and are used by auditors to evaluate the accuracy and completeness of the company's financial records. In this hierarchy, Financial Statements serve as the foundation for the External Audit process, which is initiated through Engagement Letters and conducted in accordance with Accounting Principles that govern Business operations.