Generally Accepted Accounting Practices: GAAP

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Generally Accepted Accounting Practices (GAAP) What are GAAP? Generally accepted accounting principles (GAAP) offer a framework for all standards, rules and procedures that are ""¦defined by the professional accounting industry" and have been adopted by "nearly all publicly traded U.S. companies" (Investing Answers). The principles contained within GAAP are regularly updated in order to "reflect the latest accounting methodologies," and companies rely on these updated principles, which are both established and administered by the American Institute of Certified Public Accountants (AICPA) and the Financial Accounting Standards Board (FASB) (Investing Answers). Details of any given financial organization must be fully transparent and accurate, because any investor seriously contemplating putting money into a financial company, must be certain that the financial data is accurate and up to date. Because "unscrupulous companies often find a way to bend or manipulate" GAAP rules, making them seemingly more favorable to the potential investor, a smart investor should "always review a company's GAAT financial results" in order to compare those results with other investment companies' GAAT results (Investing Answers). What organizations influence GAAP? They (AICPA) and (FASB) were mentioned in the first paragraph of this paper. But as an example, how are the actions of the FASB related to GAAP? According to the Journal of Accountancy, a recent action by the FASB was
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