Need asssistance responding to this post in personal opinion Whether you are an investor, an owner, or a potential client, when considering a transaction with a particular company, having accurate financial information is a must. Especially with large, complex organizations, it can be very difficult to know if and how they are doing well or poorly. Both profits and losses are easily hidden, and companies who appear to be performing well might not be, or visa versa. It is in these situations in which strong accounting standards are a must. These standards ensure that financial reports are being produced according to rules and norms which are common across all industries. 

This helps those reviewing the financial reports to know exactly what they are looking at and how the data was collected. The Financial Accounting Standards Board produces the Generally Accepted Accounting Principles standards which are the norm for corporations in the USA and beyond. The FASB recently underwent a leadership change, and throughout the transition both the incoming and outgoing leadership expressed optimism about the standards and the industry has a whole (Cohn, 2020). Although even with the best standards unscrupulous accountants can always find ways to bend the data and produce deceitful reports, however GAAP principles go a long way toward holding everyone to the same standard. Key to GAAP principles is the concept of neutrality (Johnson, 2017). 

Accountants are expected to do their jobs without favoring any interested party or attempting to influence the behavior of anyone involved. This is intended to avoid a situation in which accountants present information in such a way to attempt to make a business look more profitable (for investment purposes), less profitable (for tax purposes) or to otherwise skew the data in a way which does not accurately present the company's actual financial position. Although it is doubtless that this neutrality is always 100% followed in the corporate world, the principle does provide pressure to minimize the amount of bias that goes into financial reports, particularly in publicly traded companies who are held to additional regulations. In the end, while investors always should do their homework and investigate all available information about a company, in general GAAP standards ensure that financial reports are overall trustworthy and useful to investors and other interested parties.  

Answer rating: 100% (QA)

SOLUTION 1 IT IS TRUE GAAP STANDARDS ENSURE THAT FINANCIAL REPORTS ARE OVERALL TRUSTWORTHY AND USEFU... View the full answer