is one of the most prominent principles of accounting. It suggests that an enterprise should provide a true and fair view about its financial conditions and operating results. The concept of true and fair view does not mean absolute truth about enterprises. Financial statements are a product of management's judgments and estimates. The principle of true and fair view requires comparative truth about the enterprises' picture. True and fair view is rather defined operationally; it is thought to be accomplished by complying with all other lower accounting principles.
what British law requires a company's accounts to give.
The requirement for financial statements prepared in compliance with the Companies Act to 'give a true and fair view' overrides any other requirements. Although not precisely defined in the Companies Act this is generally accepted to mean that accounts show a true and fair view if they are unlikely to mislead a user of financial information in giving a false impression of the company.
A business report compiled under the principle of a true and fair view enables a detailed view of the real asset and income position of a company.
When auditors examine an organisation's accounting records and annual accounts they have to decide whether the accounts present a fair and honest picture of the organisation's trading and finances. The audit report has to say whether the accounts show a true and fair view.