Question

"What is the main reason that it is necessary for public companies to follow the rules and format set out in the Generally Accepted Accounting Principles​ (GAAP) when creating financial​ statements?"

Answer 1

Answer:

Unlike private companies or small businesses, publicly listed companies make a significant impact on the economy and the financial markets in general.

Moreover, both foreign and local investors are interested and invest in these companies.

Because of their significance, there should be the ability of comparability of these companies and their financials must be reliable and accurate.

Explanation: