Question

• Discuss why integrity, honesty, and transparency are essential in financial reporting. Give credit to any sources or real-world examples you use to support your statements.
• GAAP are the general rules, regulations, and guidelines that accountants in the United States follow to ensure their practices are legal and ethical. Explain why GAAP is so useful. Give credit to any sources or real-world examples you use to support your statements.

Answer 1

Honesty and integrity play vital roles in financial reporting because they allow investors to trust the information they receive about companies in which they invest and Honesty in financial reporting is the primary characteristic that allows financial decision -lmakers to make appropriate judgments.Transperancy provides ready access to requires financial information such as it's price ,audited financial statements.It reduces volatility in the market and thus improve decisios. The balance sheet of any company in the world is the good example of integrity,honesty and transperancy.

GAAP is useful because

i) It improves greater assurance level to all parties.

ii) It provides guidelines for preparation and presentation of financial statements.

III) It helps to maintain consistency in financial statements.

iv) It reduces risk of misrepresentation and fraud.

In real world it is used in various situations like audit and verification of organization accounts.

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