Accounting standard refers to the set of rules, guidelines, and principles framed by the regulatory body or the government that acts as a framework for accounting policies and practices. In the United States, the Generally Accepted Accounting Principle, also known as GAAP, is an accounting standard that must be followed while presenting and preparing financial statements. Generally, accounting standards are established to ensure transparency of accounting professionals and consistency in accounting principles followed by organizations. All countries have their own accounting standards framed by the regulatory body or the government. However, these standards may vary from one country to another.