Question

1.) Institutions, both public and private, provide financial statements according to GAAP guidelines to the public. Included in these reports are operating activities, investment activities, assets, expenditures and revenue. Does sharing this information to the public give the university transparency to its constituents and supporters or does this leave the university vulnerable to scrutiny over expenses and investigations?

Answer 1

Answer -

Yes, sharing financial statements information, according to GAAP Guidelines, with the public give university transparency to its constituents and supporters as well as leave the university vulnerable to scrutiny over expenses & investigations.

Because,GAAP refers to accounting policies and procedures which used in practice. It includes the set of principles which governs the accounting for financial transactions underlying the preparation of financial statements.

GAAP is a common set of accounting principles, accounting standards and procedures which are used by Accountants to prepare the financial statements.

GAAP includes following principles while preparing the Financial Statements, are as -

1. Recognition - items recognized in the financial statements (ex. Assets, Liabilities, Revenues, & Expenditures)

2. Measurement - determine amounts should be reported for each elements included in the financial statements

3. Presentation - states the line items, subtotals & totals should be displayed in the financial statements and how might the items aggregated within the financial statements

4. Disclosure - states about the specific information which is important for user of the Financial Statements.

On above mentioned principles of GAAP the financial statements are prepared and these financial statements are used or refer by end users like as Investors, Banks, Lenders ( who are third party), suppliers, government departments ( as Tax Officers & Authorities), competitors, etc.