Conceptual Understanding: Generally Accepted Accounting Principles
Fidelity Investments Company is a well-known mutual fund investment company. It makes investments worth billions of dollars in companies listed on the New York Stock Exchange and other stock markets. Generally accepted accounting principles (GAAP) are very important for Fidelity's investment analysts. What are generally accepted accounting principles? Why are financial statements that have been prepared in accordance with GAAP and audited by an independent CPA useful for Fidelity's investment analysts? What organizations influence GAAP? Explain how they do so.