GAAP refers to the common set of accounting principles, standards and procedures that ensure consistent accounting procedures are followed in recording business transactions and preparing financial statements. GAAP is based on basic accounting assumptions like separate entity, monetary unit and time period, as well as principles like historical cost, full disclosure and revenue recognition. Publicly traded companies must follow GAAP to provide transparent and consistent financial reporting. Similarly, IAS are international standards that facilitate cross-border capital flows and global business by standardizing financial reporting across countries.