WHY THEACCOUNTINGDEPARTMENT ISYOUR WORSTENEMY
In the United States, a mammoth code known as Generally Accepted Accounting Principles (GAAP, pronounced “gap”) spells out the procedures governing accounting. GAAP comprises thousands of pages’ worth of rules and guidelines. A private organization called the Financial Accounting Standards Board (FASB) monitors GAAP and regularly updates it. Most other countries have something similar.
Every publicly traded company in the United States must maintain its books according to the rules of GAAP. Privately held companies aren’t required to do so, but if a private company wants to establish a credit line or get a loan from a bank, it will often have to show the bank’s loan officer a set of financial ...