Accounting GAAP (Generally Accepted Accounting Principles) is a set of standards and rules that provide a definitive guide for financial reporting. From corporations to governments, businesses everywhere must follow these rules in order to provide accurate and reliable information about their financial assets, liabilities, income, expenses, and other related activities. By following GAAP standards, companies are better able to ensure the accuracy of the books and records that are used to report financial performance to investors, creditors, and other stakeholders. With a shared language and common accounting principles, companies worldwide can more effectively compare performance data and make sound business decisions.