key term - Generally accepted accounting principles (GAAP)

Definition

GAAP consists of a common set of accounting rules and standards used in the United States for preparing financial statements. These principles ensure consistency, clarity, and comparability of financial information across different organizations.

Related terms

Financial Statements:

Reports such as balance sheets and income statements that provide an overview of a company's financial condition.

Auditing:

The process of examining a company's financial records to ensure they are accurate and in accordance with GAAP.

Disclosure: The act of providing important financial information to stakeholders, which is guided by the transparency principles under GAAP