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The Importance of Generallly Accepted Accounting Principles

Why is it important for financial statements and other external reports to be based on generally accepted accounting principles?

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The mission of the Financial Accounting Standards Board (FASB) by its own definition is described as being "to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors and users of financial information" (FASB, 2005). To accomplish its mission, and to promote the utilization of generally accepted accounting principles, the FASB issues standards and interpretations, financial ...

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