True And Fair View Case Study
Part A. What is the history of the TFV? How did it come about, where, and when? What has been this historical purpose of the TFV?
The demand for the phrase” true and fair view” is originated from the fact that people, involved in business, needs to assure the quality of book of accounts in which they used to communicate the business performance, settling the business’s profit and others. The development of the phrases “true and fair view” is closely attached to the development of business relationship, and regulations, which was reflected in business agreement, partnership and laws regulating business activities.
What is the history of the TFV? How did it come about, where, and when?
Historically, as companies grow in size, become more complex …show more content…
From 1844, 'true and correct' or 'true and fair' was used in financial statements generally. The UK Joint Stock Companies Act (1844) required that company directors shall make up a 'full and fair balance sheet'.
The Joint Stock Companies Act (1856) removed this provision to the model (optional) company regulations. Those regulations required the directors of a company to keep true accounts upon the principle of double entry. The auditors were required to state their opinion like 'the balance sheet is a full and fair balance sheet and properly drawn up to exhibit a true and correct view of the company’s …show more content…
Also, previous legal documents have not offered a definition either. In the UK Companies Act (1947), every company was required to produce annually balance accounts showing a true and fair view statement of its activities, and the company's auditors should give opinion on whether the accounts were true and fair or not. The Companies Act in 1981 included an "override" provision that changed this requirement. The purpose of Act was that the principle of true and fair should replace detailed rules. The word fair meant that the reports were consistent between the internal records and economic reality. The word true was opposite to “false”. It was not the absolute truth, but it was free of lies, errors, and other
The demand for the phrase” true and fair view” is originated from the fact that people, involved in business, needs to assure the quality of book of accounts in which they used to communicate the business performance, settling the business’s profit and others. The development of the phrases “true and fair view” is closely attached to the development of business relationship, and regulations, which was reflected in business agreement, partnership and laws regulating business activities.
What is the history of the TFV? How did it come about, where, and when?
Historically, as companies grow in size, become more complex …show more content…
From 1844, 'true and correct' or 'true and fair' was used in financial statements generally. The UK Joint Stock Companies Act (1844) required that company directors shall make up a 'full and fair balance sheet'.
The Joint Stock Companies Act (1856) removed this provision to the model (optional) company regulations. Those regulations required the directors of a company to keep true accounts upon the principle of double entry. The auditors were required to state their opinion like 'the balance sheet is a full and fair balance sheet and properly drawn up to exhibit a true and correct view of the company’s …show more content…
Also, previous legal documents have not offered a definition either. In the UK Companies Act (1947), every company was required to produce annually balance accounts showing a true and fair view statement of its activities, and the company's auditors should give opinion on whether the accounts were true and fair or not. The Companies Act in 1981 included an "override" provision that changed this requirement. The purpose of Act was that the principle of true and fair should replace detailed rules. The word fair meant that the reports were consistent between the internal records and economic reality. The word true was opposite to “false”. It was not the absolute truth, but it was free of lies, errors, and other