What Are Generally Accepted Accounting Principles (GAAP)?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

Generally Accepted Accounting Principles, or GAAP, is a standardized set of rules and systems used by all firms with regards to their financial statements. All financial statements have to conform to GAAP for them to be credible and believable.

The reason behind GAAP is so that all firms comply to the same basic level, and this means investors know where from and how the numbers on their financial statements are derived, giving them more confidence in their accuracy.

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Patrick Curtis

Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.