Accounting systems that must follow generally accepted accounting principles (GAAP) are the standards and procedures by which accountants prepare financial statements. These rules and regulations help ensure that companies and organizations provide accurate, reliable, and consistent information about their finances. GAAP sets out required measurements, methods, and principles for preparing and reporting financial statements. This includes guidelines for transactions recording, classifying, summarizing, reconciling, and disclosing related to assets, liabilities, equity, income, expenses, and cash flows. Companies must adhere to these standards when producing regular financial performance reports – including balance sheets, income statements, and statement of cash flows. Properly documenting accounting systems helps businesses demonstrate their trustworthiness, efficiency, and fair reporting practices.