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There is an exception in the law for local auditees that, under Louisiana law, cannot issue bonded debt (R.S. The audit law ( Louisiana Revised Statute (R.S.) 24:514) requires the reports of local auditees to be prepared in accordance with GAAP. The Financial Accounting Standards Board or FASB sets GAAP for all non-governmental entities, including nonprofit organizations. The Governmental Accounting Standards Board or GASB sets GAAP for state and local governmental entities. The audit report of a department store should include the same types of information as the audit report of another department store and the audit report of a city should include the same types of information as the audit report of another city.ĭifferent standards setting bodies establish GAAP for different types of entities.

Reporting in accordance with GAAP ensures consistency and comparability among like entities. Generally accepted accounting principles or GAAP are the minimum standards and guidelines for financial accounting and reporting. Three of the acronyms that are confusing to CPAs – because they are related in form and in substance – are those for generally accepted accounting principles (GAAP) generally accepted auditing standards (GAAS), and generally accepted government auditing standards (GAGAS). The meaning of these acronyms is not always clear, even to the members of the profession that use them. Certified public accountants, like other professionals, use a lot of acronyms.