GAAP, or Generally Accepted Accounting Principles, is a set of rules and standards that guide how financial statements are prepared and presented in the United States. These principles ensure that financial reporting is consistent, transparent, and comparable across different organizations, making it easier for investors and stakeholders to understand a company's financial health. By following GAAP, companies provide a clear picture of their financial performance, which helps build trust with investors and regulators. This framework covers various aspects of accounting, including how to recognize revenue, measure assets, and report expenses, ultimately promoting accuracy and reliability in financial reporting.