The Importance of Accounting Principles

The world of be opens doors of opportunity for investors, stockholders and many businesses and organizations. However, accountants must come about guidelines established by The American Institute of Certified existence Accountants. (AICPA) Council designated the Federal write up Standards Advisory Board or (FASAB) as the body that establishes generally accepted business relationship system principles (generally accepted accounting principles). Accounting Standards GAAP is considered to be collection of methods used to prepare, process and present accounting randomness. GAAP is a general method, overall, is applicable to many divergent types of industries. The methods of using GAAP can be specific or principle based requirements. The use of GAAP can be flexible and general in the United States and are judge to attend GAAP principles. Many organizations contribute to GAAP, however, the Financial Accounting Standards Board is the main contributor to GAAP. Generally accepted accounting principles vary, but are based on some basal principles that must be followed by all GAAP rules. The staple fibre principles are consistency, reliability, relevance, and comparability. Based on these principles accountants are sworn to follow these rules.

The first principle that should be followed is consistency, consistency in accounting means that all information should be gathered and presented in the alike(p) way each period. Whether quartley, annually or monthly, this information must be presented the same each time. For instance, if a association makes an entry in the fiscal statement, it must be presented the same way each time and a valid apprehension for the entry should be considered. (http://www.suite101.com) The second principle that must be followed is reliability, reliability simply means that the information in the financial statement is reliable and verifiable by an self-directed party. If an independent auditor were to follow-up with the same information, that auditor should come up with the same information as... If you want to get a in effect(p) essay, order it on our website: Orderessay

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