What Is The Function Of "Flags" In A Micro Processor?

Flags are usually a single bit indicating a status of an Arithmetic Logic Unit (ALU) operation or some other time critical operation.  Some common flags include Overflow, Direction, Interrupt, Trap, Sign, Zero, Auxiliary carry, Parity and Carry.  

For example, the zero flag indicates a zero result, without taking additional time to do a comparison of a register's value against zero.  A sign flag would indicate the result was negative.  A carry flag indicates two values added up to something larger than the output register can hold, and a carry bit should be added to the next higher word or byte.   Since the logic to calculate these flags is provided in hardware, they increase the speed of processing by quickly providing commonly needed information.