What is the disconnect between GAAP and public companies versus the privately held companies?© BrainMass Inc. brainmass.com October 10, 2019, 4:53 am ad1c9bdddf
Have you ever heard of the blue-ribbon panel in the accounting field? If not, this is the exact sort of topic that the blue-ribbon panel addresses. Here is what the question is referring to about the disconnect. Let's look at the relation between GAAP and public companies. Basically, GAAP is designed to cover essentially every area of accounting, and GAAP is designed with the primary target of the stakeholders. GAAP regulations make it so that by both public and private companies having to conform with GAAP, information is predictable and in the prescribed GAAP format. With public companies this is extremely critical. We see what can happen when companies don't follow GAAP. Fraud, ...
This solution explains the disconnect between GAAP and public companies versus the privately held companies.