Why is it permissible to violate generally accepted accounting principles when preparing reports used by company management?

Question

Arjun Jackson

Business

23 December, 22:42

Why is it permissible to violate generally accepted accounting principles when preparing reports used by company management?

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Answers (1)

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Leandro Kaiser · Answer 1

Yes, it is permissible to violate generally accepted accounting principles when preparing reports used by company management.

Explanation:

GAAP stands for 'Generally Accepted Accounting Principles'. It is a group of standards which are agreed by policy boards and are the ways that are commonly accepted to record and report accounting information.

It majorly aims to improve the clarity and consistency of financial information.

When there is any other method which is more beneficial for the user for presentation of information, then it is permitted that GAAP can be violated for preparing reports used by company.