The set of rules that a U.S.company must follow when preparing its financial statements is called ________.
A)AICPA
B)FASB
C)GAAP
D)SOX

Question

Quizplus · Accepted Answer

GAAP (Generally Accepted Accounting Principles) is the set of rules and guidelines established by accounting professionals and regulatory bodies that companies must follow when preparing their financial statements. AICPA (American Institute of Certified Public Accountants) is a professional organization for accountants, FASB (Financial Accounting Standards Board) is responsible for developing and updating GAAP, and SOX (Sarbanes-Oxley Act) is a law that established new or expanded requirements for financial reporting and corporate governance in the wake of accounting scandals in the early 2000s. While these other options are related to accounting and financial reporting, GAAP specifically refers to the set of rules that companies follow.

The Set of Rules That a U