Requirement of UK company law for UK companies not using IASB system. The expression that is used by auditors to indicate whether, in their opinion, the
financial statements fairly represent the state of affairs and financial performance of a company.
Video Guide For True And Fair View
What is the dictionary definition of True And Fair View?
Dictionary Definition
A True and fair view in accounting (specifically auditing) means that a financial statement is free from material misstatements and faithfully represents the financial performance and positioning of an entity.
Synonyms For True And Fair View
fair picture accurate image fair view fairly fair
presentation
True And Fair View FAQ's
What is the meaning of fair view?
A requirement in an auditor’s report that the set of accounts or financial statements are true, in that there are no falsehoods, and fair, in that the result accurately reports the condition it wishes to portray.
Cite Term
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True And Fair View. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. October 22, 2022 https://payrollheaven.com/define/true-and-fair-view/.
Chicago Manual of Style (CMS):
True And Fair
View. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/true-and-fair-view/ (accessed: October 22, 2022).
American Psychological Association (APA):
True And Fair View. PayrollHeaven.com. Retrieved October 22, 2022 , from PayrollHeaven.com website: https://payrollheaven.com/define/true-and-fair-view/
Definition Sources
Definitions for True And Fair View are
sourced/syndicated and enhanced from:
A Dictionary of Economics (Oxford Quick Reference)
Oxford Dictionary Of Accounting
Oxford Dictionary Of Business & Management
This glossary post was last updated: 14th April, 2022 | 0 Views.
Directors' Duties in relation to Financial Reporting
Introduction
Quality financial information is crucial for strong and vibrant markets. More than ever, investors, suppliers, financial institutions, customers, company directors, corporate executives and many more are asking for reliable and timely financial statements in order to obtain a more accurate picture of the business, whether in terms of generating value or understanding the risks involved.
Over the past
decade, businesses have also become more challenging and business models more complex. To cope with them, financial reporting standards have become increasingly complex and require more professional judgement on the part of the preparers of financial statements. Examples include the accounting for business acquisitions, the fair value measurement of assets and revenue recognition of multi-element transactions.
It is essential that the market remains confident in the level of transparency,
integrity and quality of financial reporting. In response to this, ACRA has commenced a Financial Reporting Surveillance Programme to enforce against poor financial reporting that leads to unreliable information and/or non-compliance with the prescribed accounting standards.
Companies Act requirements
Under sections 201(2) and 201(5) of the Companies Act (the Act), directors are responsible to present and lay before the company, at its annual general meeting, financial statements
that:
comply with Accounting Standards1 issued by the Accounting Standards Council; and
give a true and fair view of the financial position and performance of the company.
In addition, directors of a company incorporated in Singapore are responsible to maintain a system of internal accounting controls
and keep proper accounting and other records that will enable the preparation of true and fair financial statements under sections 199(2A) and 199(1) of the Act, respectively.
Guidance to directors in carrying out these financial reporting duties
Review of financial statements– Directors, whether executive or non-executive, should exercise care, competence and diligence in the review of the financial statements that are presented to shareholders and
subsequently filed with ACRA. Directors should read, understand and enquire into the form and content of the financial statements to ensure that the financial information presented is clear, complete and consistent with their understanding. Even if they are not accounting experts, directors should question the accounting treatments applied when the treatment does not reflect their understanding of the substance of arrangement. They should also apply professional scepticism when assessing
management views’ on areas of significant judgement and estimates.
Financial literacy – Directors are not expected to be accounting experts, but should have sufficient and up-to-date knowledge of the accounting principles and practices to perform an effective high-level review of the financial statements. Otherwise, directors should seek help and/or attend training.
Appointment of management- Directors should ensure that senior management of
the company, such as the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), have adequate knowledge, competence, experience and integrity to undertake their roles.
Under the Code of Corporate Governance 2018, directors of listed companies should comment in the Annual Report on whether they have received assurance from the CEO and the CFO:
that the financial records have been properly maintained and the financial statements give a true and fair view of the
company’s operations and finances; and
regarding the adequacy and effectiveness of the company's risk management and internal control systems.
Whilst the assurance from the CEO and the CFO do not diminish the directors’ responsibility in these areas, it can provide directors assurance that management has exercised due care in the financial reporting process.
Competent and adequately resourced finance function – Directors
should ensure that management maintains competent and adequately resourced finance function who can prepare high quality financial statements. Qualified accountants should be recruited and provided with relevant and continuous training to keep them abreast of the financial reporting developments.
Using external help – Directors could seek professional accounting advice and/or outsource to professional accounting service providers the keeping of accounting and other
records and the preparation of financial statements. However, they remain responsible and should ensure any such advice and/or service(s) are provided by suitably qualified persons with an appropriate level of expertise and knowledge of the accounting standards, and that such advice is unbiased and objective.
Working with the independent auditors – The independent auditors are required to communicate with those charged with governance on significant audit
findings, including why they consider a significant accounting practice is not appropriate to the particular circumstances of the company, prior to issuance of the audit reports. Directors should resolve these issues amicably and seek help when necessary. Directors should not rely on the independent auditor in forming their own opinion on the financial statements. Doing so will undermine the objective of an independent audit.
Internal control system and accounting and other
records–Directors should ensure that management adopts appropriate accounting policies, designs and implements appropriate internal controls and processes, and maintains complete and accurate accounting and other records. This obligation exists regardless of whether books and records are maintained in-house or outsourced to a third party.
The above is meant to guide directors in complying with certain significant duties in relation to financial reporting. They do not
exhaustively define the duties applicable to directors under the Act and/or related legislation. When in doubt, legal advice should be sought by directors to clarify the scope of their duties.
Financial Reporting Resources for Companies and Directors
ACRA provides companies and directors with help resources such as:
Practice Guidance
Financial Reporting Practice Guidance No. 1 of 2021: Areas
of Review Focus for FY2021 Financial Statement under the Financial Reporting Surveillance Programme administered by ACRA (PDF, 278KB)
Financial Reporting Practice Guidance No. 2 of 2020: Areas of Review Focus for FY2020 Financial Statements under the Financial Reporting Surveillance Programme administered by ACRA (PDF, 488KB)
Financial Reporting Practice Guidance No. 1 of 2020: Proposed Areas of Review Focus by Directors on the Financial Statements
Affected by the COVID-19 Pandemic (PDF, 539KB)
Financial Reporting Practice Guidance No. 2 of 2019: Areas of Review Focus
for FY2019 Financial Statements under ACRA's Financial Reporting Surveillance Programme (PDF, 578KB)
Financial Reporting Practice Guidance No. 1 of 2019: Areas of Review Focus for FY2018 Financial
Statements under the Financial Reporting Surveillance Programme administered by ACRA (PDF, 636KB)
Financial Reporting Practice Guidance No. 1 of 2018: Areas of Review Focus for FY2017 Financial
Statements under the Financial Reporting Surveillance Programme administered by ACRA (PDF, 95KB)
Financial Reporting Practice Guidance No. 1 of 2016: Areas of Review Focus for FY2016 Financial Statements under the Financial
Reporting Surveillance Programme administered by ACRA (PDF, 402KB)
Financial Reporting Practice Guidance No. 2 of 2015: Areas of Review Focus for FY2015 Financial
Statements under the Financial Reporting Surveillance Programme administered by ACRA (PDF, 56KB)
Financial Reporting Practice Guidance No. 1 of 2015: Areas of Review Focus for FY2014 Financial Statements under the
Financial Reporting Surveillance Programme administered by ACRA (PDF, 47KB)
Financial
Reporting Practice Guidance No. 1 of 2014: Areas of Review Focus for FY2013 Financial Statements under the Financial Reporting Surveillance Programme administered by ACRA (PDF, 58KB)
Financial Reporting Practice Guidance No. 1 of 2012: Accounting Considerations in an Uncertain Economic Environment (PDF, 126KB)
1 Accounting Standards refer to Singapore Financial Reporting Standards (International) (SFRS(I)s), Singapore Financial Reporting Standards (SFRS), Singapore Financial Reporting Standards for Small Entities (SFRS for SE) and Charities Accounting Standards.
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Who is responsible for true and fair view of financial statements?
. 02 The auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud.
Who is responsible for financial reporting?
Directors prepare financial statements, audit committees monitor the integrity of financial information. Auditors audit the financial statements and perform other procedures on other parts of the annual report.
Who review the financial statements?
In a financial statement review, the accountant performs those procedures necessary to provide a reasonable basis for obtaining limited assurance that no material changes are needed to bring the financial statements into compliance with the applicable financial reporting framework.
Which report is given by auditor when financial statements show true & fair view?
Audit Opinion Letter
If there were no material errors in the financial statements, then the auditor will give an audit opinion that the financial statements represent a true and fair view of the company's performance and position. Learn more about audit standards from AICPA.