Which of the following is not true about generally accepted accounting principles (GAAP)?
A) GAAP provide specific guidelines as to how to account for specific events impacting the financial performance of the firm.
B) The scrupulous application GAAP accounting rules does ensure consistency in comparing one firm's financial performance to another.
C) It is customary for definitive agreements of purchase and sale to require that a target company represent that its financial books are kept in accordance with GAAP.
D) GAAP guarantees that a firm's financial books are accurate.
E) Differences between how a firm records actual financial transactions and how they should be recorded based on GAAP may indicate fraud or mismanagement.

Question

Quizplus · Accepted Answer

GAAP do not guarantee that a firm's financial books are accurate. While following GAAP guidelines is important to ensure consistency and transparency in financial reporting, there are still opportunities for errors or misstatements to occur. It is the responsibility of the firm's management and auditors to ensure the accuracy of the financial statements.

Which of the Following Is Not True About Generally Accepted