- April 17, 2014
- Posted by: Rayvat Accounting
- Category: Bookkeeping Services
A strong USA Base Bookkeeping helps companies keep accurate records for a range of purposes. These include analyzing business activities, seeking finance, attracting investors, lodging and paying tax.
Since it is a tedious job for companies to set up their own bookkeeping system, it is advised that they must seek help from outsourced bookkeeping services.
Rules For USA Base Bookkeeping
Each country has their own set of accounting rules that go a long way in determining the way the outsourced bookkeepers and accountants will function. For instance, the U.S. Securities and Exchange Commission (SEC) follow GAAP (“generally accepted accounting principles”). GAAP is a set of accounting principles, detailed rules and standards and generally accepted practices used by the accountants throughout to prepare transaction lists; financial statements, such as balance sheets, income statements and cash flow statements.
These principles are followed while making a note of financial data; day to day transactions. These do not allow a company to withhold any financial information from the investors and company stakeholders.
Thus for a Bookkeeping Services provider in the Unites States, understanding GAAP becomes of prime importance as these principles determine the rules of accounting and recording financial data. Companies therefore seek accounting and bookkeeping officials who are expert in GAAP to avoid any negative outcomes. Companies like Enron have been suffering negative consequences as a result of their attempt to create an illusion of financial stability.
Two Authoritative Bodies that Determine the Ways the Accountants in the States have to Function are:
1. FASB (Financial Accounting Standards Board): It is the most important body in the private sector responsible for keeping the accountants up to date with the latest GAAP guidelines.
2. SEC (the federal Securities and Exchange Commission): SEC draws authority from federal securities laws and exercises power over companies whose shares are publicly traded.
Thus accountants and bookkeepers in the USA need to keep up with the guidelines of these bodies, in their respective public and private sectors.
In order to set up one’s own bookkeeping system, it becomes necessary to be well versed with the principles of the region that go into shaping the accounts and bookkeeping industry there. Therefore in the United States, GAAP becomes the set of those principles and FASB and SEC become the impostors of the same.
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