What are Generally Accepted Accounting Principles (GAAP)? How do GAAP affect financial reporting? How might GAAP need to change to accommodate today’s dynamic business environment?The GAAP is the accounting rules used to prepare or standardize the reports of financial statements that include balance sheets, cash flow, and income statements from publicly and private companies. This information from the GAAP is helpful for individuals that are making decisions about a company, mainly investors or creditors. GAAP affects the financialreporting by measurement and disclosure principles. These principles can recognize the timing and basis of things that are entered into the accounting cycle by knowing when transactions are recorded. The disclosure principle gives information about the numbers that are essential to the financial statements. The GAAP might need to change in order to make room for international accounting and financial reporting. The GAAP is known as U.S. GAAP but companies are trying to operate with offshore operations so an international accounting criteria would need to be followed so this would mean the GAAP needs to have global accepted accounting standards in order to meet the needs of accounting professionals all over the world.'Response 2The GAAP is simply defined as the accounting principles, standards, and procedures that accounting professionals use to compile their financial statements.' These principles are developd a group of policy boards that determne what things are commonly agreed upon to compile companies financial information into usable statements which maintain a level of constistancy.' This constistancy should everyone to the same standards of accuracy and should prevent companies from making their financial standings look better than they really are.' The GAAP needs to continually revued to keep up with the technology avialable to accounting professionals now.' The continual change in technology give people larger oppertunities to hide information from its
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