Can you find a specific definition of “True and Fair view”? As of my last attempt, there is no authoritative ie. “black and white” version available for all parties to adopt.
The ambiguity then gives rise to confusion.
The public accountants are required by the Companies Act to express an opinion on whether the financial statements are true and fair. The auditors conduct control test and substantive test based on varying degree of sampling to reach a conclusion.
Clients may enter into a lengthy discussion to change their auditors’ opinion to qualify their accounts.
ACRA said the criterion of a “true and fair view” is NOT an accounting criterion. It is open to legal test in Court. ACRA is saying that public accountants thus do not have the final say.
Mr Joseph Alfred, Technical Director of ACCA Singapore, in his article in Focus Qtr 4- 2006, presented his arguments against accounting profession being “absorbed and subsumed under the legal profession”.
Given the current direction from ACRA, he said you should not be surprised if you were to be directed by your auditors to the lawyers to obtain opinions on contentious accounting interpretations.
Why should the accounting profession be exempted from a legal review when other professions like medical are included?