True and Fair View

The  concept  of  true  and  fair  is  a  fundamental  concept  in  auditing.  The  phrase true  and

fair in the auditors report signifies that the auditor is required to express his opinion as to

whether  the  state  of  affairs  and  the  results  of  the  entity  as  ascertained  by  him  in  the

course  of  his  audit  are  truly  and  fairly  represented  in  the  accounts  under  audit.

This requires that the auditor should examine the accounts with a view to verify that all assets,

liabilities,  income  and  expenses  are  stated  as  amounts  which  are  in  accordance  with

accounting  principles  and  policies  which  are  relevant  and  no  material  amount,  item  or

transaction  has  been  omitted.

 In  more  specific  terms,  to  ensure  true  and  fair view,  an  auditor  has  to  see  :

(i)  that  the  assets  are  neither  undervalued  or  overvalued,according to the applicable accounting principles, (ii) no material asset is omitted;

(iii) the charge,  if  any,  on  assets  are  disclosed;

(iv)  material  liabilities  should  not  be  omitted;

(v) the profit and loss account discloses all the matters required to be disclosed by provisions

(vii)  accounting  policies  have  been  followed  consistently;  and

(viii)  all unusual, exceptional or non-recurring items have been disclosed separately.