Yakub02
Banned
What is fair presentation? Directors are required to issue financial statements that present fairly the financial position, financial performance and cash flows of an entity.
This means that the financial statements must be a faithful representation of the effects of transactions and other events in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in IFRS.
The application of IFRSs, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation. A component of this involves the selection and application of accounting policies in accordance with IAS 8, Accounting Policies,
Changes in Accounting Estimates and Errors; Auditors are required to give an independent opinion on whether financial statements are presented fairly.
If in the opinion of the auditor fair presentation is not achieved the auditor will issue a qualified audit report.
These requirements do not result in a statement of financial position that is correct in the sense that there is only one possible answer to different accounting questions. In reality, a fair presentation can encompass a range of different figures.
Differences such as those above might arise in the normal course of events with no attempt to engineer the figures. This can lead to loss of comparability. Also, the situations described and others like them allow for accountants to manipulate figures to achieve a certain result
This means that the financial statements must be a faithful representation of the effects of transactions and other events in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in IFRS.
The application of IFRSs, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation. A component of this involves the selection and application of accounting policies in accordance with IAS 8, Accounting Policies,
Changes in Accounting Estimates and Errors; Auditors are required to give an independent opinion on whether financial statements are presented fairly.
If in the opinion of the auditor fair presentation is not achieved the auditor will issue a qualified audit report.
These requirements do not result in a statement of financial position that is correct in the sense that there is only one possible answer to different accounting questions. In reality, a fair presentation can encompass a range of different figures.
Differences such as those above might arise in the normal course of events with no attempt to engineer the figures. This can lead to loss of comparability. Also, the situations described and others like them allow for accountants to manipulate figures to achieve a certain result
