The review of financial statements to assess their fairness and adherence to GAAP is
What is the review of financial statements to assess their fairness and adherence to GAAP?Accounting Chap 1 Terms. What is fairness in financial statements?Fairness has an important place in the practice of accounting. It is stated in the auditor's report that the financial statements present fairly the results of operations and cash flows for the year ended in conformity with generally accepted accounting principles.
What is GAAP and why is it important to the users of financial statements please explain?GAAP is a term that refers to a set of accounting rules, standards, and practices used to prepare and standardize financial statements that are issued by a company. The goal of these standards is to help investors and creditors better compare companies by establishing consistency and transparency.
How does GAAP impact the financial statements?GAAP compliance makes the financial reporting process transparent and standardizes assumptions, terminology, definitions, and methods. External parties can easily compare financial statements issued by GAAP-compliant entities and safely assume consistency, which allows for quick and accurate cross-company comparisons.
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