Rules, standards and procedures that are accepted and used in the accounting community for reporting financial information. In the US, GAAP standards are set by the Financial Accounting Standards Board (FASB). Financial statements submitted to the SEC by publicly traded companies are required to meet GAAP standards. Be wary of the companies whose financial statements are not made using GAAP standards. Also, just because GAAP is used, it does not guarantee that figures on statements are not purposely incorrect.