GAAP Overview

If you are a college graduate and are looking to get into the workforce, or are switching careers and what to get a job as an accountant, there are certain things you need to know. Every industry has certain rules and guidelines to follow and the accounting field is no different. Before you get involved in accounting you must know and follow these guidelines and principles. These guidelines and principles are known as Generally Accepted Accounting Principles (GAAP). If these rules and guidelines are followed on a regular basis, everything is fine. But when someone goes off course and decides to go by his own principles, accounting fraud develops. GAAP comprises many standards, interpretations, opinions, and more that is developed by the FASB (Financial Accounting Standards Board), the American Institute of Certified Public Accountants (AICPA), and the Securities and Exchange Commission (SEC).

 

·        FASB: FASB is the group that developed GAAP. They developed the standards and guidelines that make up GAAP, and put them into practice.

·        AICPA: This organization enforces GAAP for all accountants and CPAs. They make sure that anyone who is a CPA, CMA, or bookkeeper upholds the standards and set forth in the bylaws of the FASB.