Question

Within today’s international business environment, there has been a great deal of discussion about the convergence of United States accounting standards (also known as GAAP), with international standards. In two hundred words or more, please comment on this topic. Please use proper citation when posting your response on the discussion board.

Answer 1

Generally accepted accounting principles(GAAP) are the accounting rules used to prepare and standardize the reporting of financial statements,such as income statements and cashflow statements.balance sheets,for publicly traded companies and many private private companies in the united states. GAAP-based income is measured so that the information provided on financial statements is useful to those making economic decisions about a particular company,such as potential investors and creditors.It is implemented through measurement principles and disclosure principles. Basically,It is concerned with the measurement of economic activity;the time when such measurements are to be made are recorded;the disclosures surrounding this activity;the preparation and presentation of summarized economic information in financial statements.without it,companies would be free to decide for themselves what financial information to report and how to report it,make things quite difficult for investors and creditors. GAAP improves the clarity of the communication of financial information.It also helps investors and creditors better compare companies.Although it is not written in law,the U.S Securities and Exchange Commision(SEC) requires publicly traded companies and other regulated companies to follow GAAP for financial reporting.Although Adhering to GAAP guidelines can help to implement proper controls and safeguards.