Generally Accepted Accounting Principles (GAAP)  is a term used to refer to the standard framework of guidelines for financial accounting  used in any given jurisdiction which are generally known as Accounting Standards . GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements

Financial Accounting is information that must be assembled and reported objectively. Third-parties who must rely on such information have a right to be assured that the data are free from bias and inconsistency, whether deliberate or not. For this reason, financial accounting relies on certain standards or guides that are called "Generally Accepted Accounting Principles" (GAAP).

Principles derive from tradition, such as the concept of matching. In any report of financial statements (audit, compilation, review, etc.), the preparer/auditor must indicate to the reader whether or not the information contained within the statements complies with GAAP.

International Accounting Standards and Rules

Many countries use or are converging on the International Financial Reporting Standards  (IFRS), established and maintained by the International Accounting Standards Board . In some countries, local accounting principles are applied for regular companies but listed or large companies must conforms to IFRS, so statutory reporting is comparable internationally, across jurisdictions.

* Source : WIKI