‘True and Fair’ in the Context of Financial Report Presentation
Section 295 of the Corporations Act requires directors to make a declaration that includes, inter alia, that the financial statements and notes are in accordance with the Act, including Section 296 (accounting standards) Section 296 (‘true and fair view’).
Your task is to provide an assessment of whether the two parts above (that the financial statements and associated notes are prepared in accordance with accounting standards AND that they give a
‘true and fair view’ of the entities financial position and performance) are consistent with each other or could it be argued that compliance with one of the two statements may indeed lead to conflict with the other statement.
Your assessment cannot be based on your opinion. You will need to review the literature on this subject and draw conclusions derived from this review. As a starting position, two research papers are provided for your review – please note these papers are provided as a basis for giving you a
place to start your search for relevant research papers. It would also be useful to identify whether this issue has been discussed within the professional magazines – CA Magazine/CPA In the Black/IPA Public Accountant for example. You also need to show that you understand the Australian context that underpins the requirements for the Director’s Statement.
Assessment Task 2 Part A
There are two requirements associated with Part A.
Requirement 1: Prepare a discussion paper that addresses the following question:
Does compliance with accounting standards always result in Financial Statements that provide a ‘true and fair view’ of the financial position and performance of the entity?
In your discussion you are required to address both sides of the argument (appropriately referenced), before coming to your own conclusion. The discussion must be written in a professional manner, and you may use accounting terminology.
Note: please paraphrase your arguments using your own words, do not directly copy the arguments from research papers or online materials (which may lead to plagiarism and a breach of academic integrity).