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

"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."

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.

"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."