Posted on 19 August 2005

The Financial Reporting Council has published an analysis of the impact of IFRS and new auditing standards on the concept of "true and fair view". The obligation on companies under IFRS is to prepare financial statements that "present fairly" the company's financial position, financial performance and cash flows. There have been concerns that the safeguards against corporate scandals will be weakened if the overarching concept of "true and fair view" is no longer required in corporate reporting or in the audit of financial statements. The FRC paper concludes that the intent and substance of "presents fairly" and "true and fair" are similar, that there has been no substantive change in the objectives of an audit or the nature of auditors' responsibilities, and that the need for professional judgement remains central to the work of preparers of accounts and auditors. The FRC is inviting views on its paper by 1 November. The FRC paper is available at: www.frc.org.uk/images/uploaded/documents/Implications%20of%20new%20accounting%20and%20auditing%20standards5.pdf