Publicly traded companies are required to prepare P&L statements and must file their financial statements with the U.S. Securities and Exchange Commission (SEC) so that they can be scrutinized by investors, analysts, and regulators. Companies must comply with a set of rules and guidelines known as generally accepted accounting principles (GAAP) when they prepare these statements. Private companies, on the other hand, are not necessarily required to comply with GAAP. Some smaller companies, though, may even not prepare formal financial statements at all.