Financial Accounting though processes Accounting Information using fundamental principles and techniques, interpretation of Financial Information and the Financial Statements can differ among different approved and recognized standards. In the United States, the Generally Accepted Accounting Principles (GAAP) is preferred and used by Businesses throughout. As it goes with the US, most Businesses having international presence follow the GAAP standard.

The practice of Financial Accounting follows fundamental principles and approaches in processing Accounting Information. The Information is first captured and stored in Accounting Ledgers using the Single Entry Method or the Double Entry Method. These Accounting Ledgers are universally same across all standards of Financial Accounting and is based on the same principle. These Accounting Ledgers become the bases of all future references by the Financial Accountant, in order to further process them into a meaningful and summarized perspective. The methods of calculation and formulae remain unchanged across Financial Accounting Standards, and remain universal and known to all Financial Accountants. However after the Financial Information is processed, different Financial Accounting Standards put them into different Statements and Reports and present them according to the specifications of the Standard. Since majority of decision makers, such as the Leadership, Creditors, Investors, Shareholders and Tax authorities, review and make decisions based on the summarized Financial Statements, it is imperative that universal comprehension in Financial Statements across Businesses is maintained. Consistency in preparing Financial Statements over the years helps a great deal in connecting historical Financial Information and detecting trends.

Some of the authorized reviewers and approving authorities of Financial Accounting Standards are Securities Exchange Commission (SEC), Accounting Principles Board (APB), Committee on Accounting Procedure (CAP), Financial Accounting Standard Board (FASB), Governmental Accounting Standards Board (GASB) and the International Accounting Standards Committee (IASC). In the United States, the FASB is the primary organization which defines the largely prevalent GAAP Financial Accounting standard. The SEC retains the authority to establish Financial Accounting Standards for Publicly Traded companies. The GASB is a special organization which defines Financial Accounting Standards for Local and State Governments.