What is the main reason that it is necessary for public companies to follow the rules and format set out in the Generally Accepted Accounting Principles (GAAP)when creating financial statements?
A)It is easier to find specific information in such a report if it is laid out in a clear and consistent manner.
B)It ensures that information on the performance of private companies is readily available to the public.
C)It ensures that important information is not omitted and superfluous information is not included.
D)It makes it easier to compare the financial results of different firms.
E)To make sure they satisfy the auditor.

Question

Quizplus · Accepted Answer

Following GAAP ensures that financial statements are created using consistent accounting methods, which makes it easier to compare the financial results of different firms. This facilitates investment decision-making and promotes transparency in financial reporting.

What Is the Main Reason That It Is Necessary for Public