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Accounting is the systematic recording, reporting, and analysis of financial transactions of a business and a principle is a rule or ethical standard. The definition of an accounting principle is a principle that governs current accounting practice and that is used as a reference to determine the appropriate treatment of complex transactions (InvestorWords.com).
In the audit report, the term accounting principle is referred to the rules and ethical standards that are used to provide reasonable and reliable assurance that the maintenance of records are accurately reflecting the transparency of any transactions and dispositions that occurred in the current year, that company operations were authorized and approved by management and directors of the respective company, and there is assurance that any unauthorized occurrences that may have a material effect on the financial statements have been prevented...
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