Reporting Standards and Practices

  1. Objective 15-4 Explain the key standards and principles for reporting financial statements.

Accountants follow standard reporting practices and principles when they prepare external reports. The common language dictated by standard practices and spelled out in GAAP is designed to give external users confidence in the accuracy and meaning of financial information. GAAP cover a range of issues, such as when to recognize revenues from operations and how to make full public disclosure of financial information. Without such standards, users of financial statements wouldn’t be able to compare information from different companies and would misunderstand—or be led to misconstrue—a company’s true financial status. ...

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