Generally Accepted Accounting Principles (GAAP) are a set of standardized accounting principles, standards, and procedures used by companies to prepare and present financial statements in conformity with regulatory requirements and industry norms. GAAP ensures consistency, comparability, and transparency in financial reporting, allowing investors, creditors, regulators, and other stakeholders to make informed decisions. GAAP encompasses principles-based guidelines, such as the accrual basis of accounting, revenue recognition principles, and matching principles, as well as specific rules and conventions governing financial statement presentation, disclosure, and measurement. Compliance with GAAP is mandatory for publicly traded companies in many jurisdictions, while private companies may also follow GAAP for consistency and credibility. GAAP evolves over time in response to changes in business practices, accounting standards, and regulatory requirements, reflecting ongoing efforts to enhance financial reporting quality, reliability, and relevance.