How is GAAP characterized in terms of its origin?

Generally Accepted Accounting Principles (GAAP) are characterized as being influenced by political action and logic because they develop through a combination of accounting standards bodies, regulatory agencies, and ongoing feedback from the business community and stakeholders. This means that they are shaped not only by logical frameworks and theoretical considerations but also by the practical needs and influences of various political and economic environments.

The development of GAAP involves negotiation and debate among professionals, which can result in standards that reflect current economic realities, social expectations, and regulatory requirements. As such, these principles are not static; they evolve based on a blend of professional judgment, empirical data, and often the political landscape surrounding the accounting profession.

For example, changes in regulatory practices or significant events in the financial markets can lead to revisions in GAAP to address new challenges and to ensure that financial reporting remains relevant and reliable for users. This reflects the ongoing negotiation and consensus-building process inherent in its development.