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Rules of Financial Reporting

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Rules of Financial Reporting

Category: Essay

Subcategory: Accounting

Level: Masters

Pages: 2

Words: 550

Starbucks and GAAP Compliance
Name
Institutional Affiliation
Date

Starbucks and GAAP Compliance
Control Procedures
The rules used in financial reporting are contained in the generally accepted accounting principles that are often referred as (GAAP). These rules are made to regulate the information that a company releases (Morrow, 2009). The information will inform interested parties of the previous and anticipated performances of a company. This will help investors decide whether to involve their resources in activities of a company (Morrow, 2009). Without these rules, companies would be free to selectively determine what they want to report (Lohrey, 2018). This would lead to partial reporting of values that are positive and therefore misleading investors. For all private and public traded companies in the United States, the GAAP must be applied in writing a financial statement such as balance sheets and cash flows (Richards, 2018). Similarly, Starbucks has an obligation to include these measurements in their reports.
GAAP are meant to show units of measurement and disclosure. Units of measurements are mainly those that show the particular time when the statements were made. They show the timeframe within which the results implied were obtained (Lohrey, 2018). Disclosure units are those that state the specific numbers of the performance such as the numerical financial results. GAAP concerns itself with four activities reporting which include;
An indication of the …

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