GAAP

GENERALLY ACCEPTED ACCOUNTING PRINCIPLES -GAAP

The accounting profession has developed some standards that are generally accepted and universally practiced. This common set of standards is known as Generally Accepted Accounting Principles-GAAP. Generally Accepted Accounting Principles (GAAP) may be described as broad rules adopted by the accounting profession as guides in measuring, recording, and reporting the financial affairs and activities of a business. They consist of a number of concepts, principles and procedure. Every business enterprise prepares its financial statements in accordance with the GAAP. GAAP are some accounting rules and regulations, which are to follow in preparing financial statements by the preparers of an enterprise. Auditors should follow the GAAP to scrutiny the statements whether those are prepared in accordance with the GAAP. Since the GAAP are generally acceptable to the preparers, auditors and other categories of users.