The accounting profession has developed standards that are generally accepted and universally practiced. This common set of standards is called generally accepted accounting principles (GAAP). these standards indicate how to report economic events.
the primary accounting standard-setting body in the United States is the Financial Accounting Standards Board (FASB). The Securities and Exchange Commission (SEC) is the agency of the U.S. government that oversees U.S. financial markets and accounting standard-setting bodies. The SEC relies on the FASB to develop accounting standards, which public companies must follow. Many countries outside of the United States have adopted the accounting Standards issued by the International Accounting Standards Board (IASB). These standards are called International Financial Reporting Standards (IFRS).
As markets become more global. It is often desirable to compare the results of companies from different countries that report using different accounting standards. In order to increase comparability, in recent years the two standard setting bodies have made efforts to reduce the differences between U.S. GAAP and IFRS.
Source: Accounting Principles by Weygandt, Kimmel, & Kieso