Because GAAP specifies what must be contained in financial reports,management is precluded from disclosing financial and nonfinancial operating details that GAAP does not require-thus promoting comparability among companies' financial reports.

GAAP

Generally Accepted Accounting Principles, a standard framework of guidelines for financial accounting used in any jurisdiction.

Financial Reports

are formal records that outline the financial activities and condition of a business, government, or other entity, typically including balance sheets, income statements, and cash flow statements.

Nonfinancial Operating Details

Refers to the operational information of a business that does not directly relate to financial figures but is crucial for comprehensive business analysis, such as productivity metrics or customer satisfaction levels.