Ethical Obligations and Decision-Making in Accounting 2nd Edition by Steven Mintz, Roselyn Morris

Exercise 6

What is meant by the “true and fair view” override?   How and when might it be applied?

Step 1 of 2

Accounting:

In simple words, accounting is the process of recording, classifying and analyzing the financial information of a company. This is not a single process as it includes many sub-processes under it. It requires specific knowledge.

According to the AICPA Code of Professional Conduct, an accountant should use his professional knowledge and should be responsible for moral judgment in all his activities done in the course of action.

Accounting standard:

This is a set of basic rules and principles set by the Financial Accounting and Standard Board (FASB). These rules help the manager in managing accounts properly. It increases the transparency of accounts. It helps in fair representation of accounts.

IFRS:

IFRS stands for international financial reporting standards. It is developed by the IASB (International accounting system board) for the preparation of the balance sheet and other profitability statements.