The Institute of Chartered Accountants of Scotland (ICAS) has welcomed the FRC's statement reaffirming the centrality of the "true and fair view" in financial reporting.

ICAS has been campaigning over the last three years for a more principles-based approach to accounting, and is pleased that the FRC has confirmed the true and fair view as the fundamental principle which underlies financial statements.

ICAS is also pleased that Martin Moore QC has confirmed the equivalence of the "true and fair" concept to the international equivalent of "presents fairly" and that both should be regarded as overarching concepts in financial reporting.

-- Advertisement --

David Wood, Executive Director of Technical Policy at the Institute said: "We welcome the view of Martin Moore QC that the preparation of financial statements is not just a mechanical process and that, although compliance with accounting standards will result in financial statements giving a true and fair view, this will not always necessarily be the case.

"ICAS therefore supports the FRC’s statement that company directors should consider their financial statements in the round, and concurs that auditors need to exercise their professional judgement on this matter before expressing an audit opinion."

(GK/NS)