In order to compare the financial statements of different companies, it would be desirable to have each company develop its own set of accounting rules and practices.

Question

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It would be difficult to compare the financial statements if each company used its own set of accounting rules and practices. In order to facilitate comparison, there are generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) that many companies adhere to. These standards provide a consistent framework for financial reporting across various companies and industries.

In Order to Compare the Financial Statements of Different Companies