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Accounting Mock Interview

Question 15 of 30 for our Accounting Mock Interview

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Question 15 of 30

A start up company needs help understanding GAAP. How would you explain why GAAP is important?

GAAP stands for Generally Accepted Accounting Principles, and it's the framework for accounting standards. If you're new to your accounting career, you could talk about how you studied GAAP rules in college. If you're an experienced accountant, talk about how you've applied GAAP in your work.

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How to Answer: A start up company needs help understanding GAAP. How would you explain why GAAP is important?

Advice and answer examples written specifically for an Accounting job interview.

  • 15. A start up company needs help understanding GAAP. How would you explain why GAAP is important?

      How to Answer

      GAAP stands for Generally Accepted Accounting Principles, and it's the framework for accounting standards. If you're new to your accounting career, you could talk about how you studied GAAP rules in college. If you're an experienced accountant, talk about how you've applied GAAP in your work.

      Written by Bobbi Witt on January 8th, 2021

      Entry Level

      "GAAP is the standard set of regulations is used for American financial statements and processes. This is important because if every company was allowed to devise their own accounting method, the government or investors would have trouble understanding them. This would cause a lot more work for the government as well as investors, which could deter them from investing in the company. Having a standard set of rules keeps companies honest and sets out a path to follow when filling out financial documents."

      Written by Bobbi Witt on January 8th, 2021

      Answer Example

      "GAAP stands for Generally Accepted Accounting Principles, which is the standardization set out by the AICPA or American institute for Certified Public Accountants. They created these regulations to ensure that if you go from company to company, the skeleton of the financial records will be the same. That way, auditors and the IRS can easily find the necessary information across multiple companies."

      Written by Bobbi Witt on January 8th, 2021

      Experienced

      "GAAP is important for companies because without the detailed standards, it would be chaos. Now GAAP is not the same as the IFRS, which is the International Financial Reporting Standards. These standards are actually a little more relaxed than GAAP in a lot of ways apart from inventory valuation methods. Knowing the differences between GAAP and IFRS will help if the company decides to expand internationally in the future."

      Written by Bobbi Witt on January 8th, 2021

      Anonymous Interview Answers with Professional Feedback

      Anonymous Answer

      "They are the principles used in making financial statements understandable to those reading them."

      Jaymie's Feedback

      This is a good start! Are there any other talking points that would be important to discuss with a start-up?