Accounting Principles Compliance – the True and Fair View Recipe. A Theoretical Perspective on the Contribution of Accounting Principles to the Financial Reporting Objective Achievement

Claudia Cătălina Ciocan
Additional contact information
Claudia Cătălina Ciocan: "Alexandru Ioan Cuza" University of Iași

CECCAR Business Review, 2021, vol. 2, issue 11, 49-61

Abstract: This paper explores the significance of the true and fair view, as the main objective of financial reporting to which accounting principles are subordinated, and the relationship between it and all accounting principles, focusing on identifying their contribution to achieving the true and fair view and, simultaneously, the potential conflicts. To address this issue, several interpretations of the true and fair view objective were analyzed together with the way the requirements of each accounting principle contribute to the achievement of this objective. The paper highlights that the true and fair view recipe involves contributions such as aggregating values from different reporting periods, separately reflecting assets and liabilities to prevent hiding part of a company’s wealth or masking the risks that the company is facing, accurate, neutral and free from error/omission representation of transactions, establishing an acceptable materiality level that does not allow information to be over contracted or overcrowded with insignificant details, reflecting the economic substance of the transaction instead of the legal one, a realistic and balanced estimation of the risks and value losses, the presentation of past rights and obligations without being limited by their effective settlement date.

Keywords: true and fair view; accounting principles; the quality of information; information objectivity; prudence; timeliness (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.ceccarbusinessreview.ro/accounting-pri ... -a176d/download-PDF/ (application/pdf)
https://www.ceccarbusinessreview.ro/accounting-pri ... nanc-a176a/abstract/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ahd:journl:v:2:y:2021:i:11:p:49-61

DOI: 10.37945/cbr.2021.11.07

Access Statistics for this article

CECCAR Business Review is currently edited by Robert-Aurelian ȘOVA

More articles in CECCAR Business Review from Body of Expert and Licensed Accountants of Romania (CECCAR)
Bibliographic data for series maintained by Radu CIOBANU ().