A friend of your says, “I understand there are ‘rules’ for financial reporting. But what are these rules, where can a person find them, and which ones are more important?”

One of the most common rules for financial reporting is GAAP, which is Generally Accepted Accounting Principles. GAAP are and is a combination of authoritative standards and simply the common accepted ways of recording and reporting accounting information from companies.

GAAP can be found and imposed by companies so that investors have minimum level of consistency in the area of financial statements when analyzing companies for investment purposes. The GAAP covers such things as revenue recognition and balance sheets. Do understand also that companies are expected to follow GAAP rules when reporting their financial data via financial statements, so be very cautious if one is not using GAAP. The most important of financial reporting, is also the Financial Accounting Standard Board also known as the FASB, which is the highest of authoritative of Accounting Standards Codifications.

GAAP is not statistic. It includes very complex standards that were issued in response to some very complicated business transactions. GAAP can be found in such industries; utilities, banking and insurance.

You and a friend are in the same accounting class. During the first test, you observe that your friend cheated by copying one of her answers from another student (who was unaware of the copying). When the exams are returned, your grade is a B, while your friends’ grade is an A.

Ethics, as we know it, is a basic study that deals with proper conduct of individuals and good living. However, according to the AICPA, we have six principles of professional conduct that we must ethically comply with as future and current professionals. Out of the six I feel that responsibility and integrity are of the most