Explain the importance of the &Lsquo;True and fair' presentation of financial statements essay
Goal. Each financial statement plays an extremely important role as it provides the company's stakeholders, including customers, suppliers, creditors, banks, government agencies, shareholders and employees, with insight into where the company stands. These financial statements are also used to determine the various accounting ratios, the definition of true representation. The Board of Directors prepares annual accounts that provide a true and fair view of the entity's results. When assessing these financial statements, the accountant expresses an opinion on their truth and fairness. Although there is no definition of true in the International Standards on Auditing. What does a faithful representation mean? Financial statements are described as giving a 'true and fair view' when they are free from material misstatement and fairly represent the financial performance and position of an entity. In some countries this is an essential part of financial reporting. According to International Financial Reporting Standards, 1 of the Companies Act, 2013 “Act”, stipulates that the financial statements “FS” must give a 'true and fair view' of the state of affairs of the company and must comply with the accounting standards notified under of the Act, and also be in the form provided in Schedule for different classes of companies. In order to provide a true and fair view of the accounts, accountants must study, research and rely on judgments on various issues that affect accounts, such as: Moreover, there is a tight time frame. for the audit advisory report prescribed in the respective laws of regulatory authorities.