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Public Companies and GAAP Accounting

In the United States, all publicly traded company's financial statements are required to be generated based on Generally Accepted Accounting Principles (GAAP) established by the Financial Accounting Standards Board (FASB).  The FASB rules focus on improving the accuracy and usefulness of financial statements by focusing on the primary characteristics of relevance and reliability, and on the qualities of comparability and consistency.  Publicly traded firms must use GAAP when presenting financial information to interested third parties in order to comply with U.S. securities laws.

© 2010 by Michael C. Dennis.  All Rights Reserved