Financial statements are reports, which reflect the fiscal health of a company. The financial statements are usually prepared by Certified Public Accountants, also known as CPAs.
Financial statements are made by experienced professionals to avoid the manipulation of statistical data. There are certain guidelines or principles, which are followed while preparing financial reports or financial statements. These principles or guidelines are called GAAP or Generally Accepted Accounting Principles. Statements worked out following these guidelines are called GAAP financial statements.
GAAP financial statements furnish details of the under mentioned:
Measurement of shares
The GAAP guidelines have been implemented so that a standard is maintained in the preparation of financial statements. The norms (GAAP) are formed by a combination of standards laid down by various policy boards.
Although, GAAP financial statements are compiled using GAAP standards, there is every possibility of violating GAAP standards. However, a financial statement, which is not done as per GAAP standards may not be very dependable. A corrupt accountant can always deviate from the GAAP standards.
Last Updated on : 26th June 2013