generally accepted accounting principles GAAP
Question
Financial statements?
Financial statements are based on generally accepted accounting principles (GAAP) and audited by CPA firm, so do investors need to worry about the validity of those statements? Explain your answer.
2 months ago - 2 answers
Best Answer
Chosen by Asker
Absolutely, financial statements are forward looking trying to predict the future profits. Investors need to buy low before the stock price rises and predicting future profits before they are reported as fact. Therefor they must rely on the validity of theses statements.
by Joe S
2 months ago
Asker's Rating: 
Other Answers
With all of the frauds going on - yes but there is not much that can be done about it. As for the statements, they are not forward, they look backwards. How did the company perform in the last period (income statement) and what did the company look like at the end of the period (balance sheet) The readers need to make guesses about what will happen in the future
by Sarah M- 2 months ago