what are accounting principles 
accounting principles are the rules and guidelines that companies and other bodies must follow when reporting financial data these rules make it easier to examine financial data by standardizing the terms and methods that accountants must use the international financial reporting standards ifrs is the most widely used set of accounting principles with adoption in 168 jurisdictions the united states uses a separate set of accounting principles known as generally accepted accounting principles gaap 1ryan oakley investopediaunderstanding accounting principlesthe ultimate goal of any set of accounting principles is to ensure that a company s financial statements are complete consistent and comparable this makes it easier for investors to analyze and extract useful information from the company s financial statements including trend data over a period of time it also facilitates the comparison of financial information across different companies accounting principles also help mitigate accounting fraud by increasing transparency and allowing red flags to be identified the ultimate goal of standardized accounting principles is to allow financial statement users to view a company s financials with certainty that the information disclosed in the report is complete consistent and comparable comparability is the ability for financial statement users to review multiple companies financials side by side with the guarantee that accounting principles have been followed to the same set of standards accounting information is not absolute or concrete and standards are developed to minimize the negative effects of inconsistent data without these rules comparing financial statements among companies would be extremely difficult even within the same industry inconsistencies and errors also would be harder to spot 