Are Truth and Fairness Generally Acceptable?

The article presents practical differences between two concepts, namely, the British standard of the "true and fair" view and the American standards of fair presentation, general acceptance, and consistency. A progressive study of each concept leads to the same barrier, the lack of a clear definition of objectives in financial reporting. As an inevitable result, both concepts produce standards of financial reporting that the profession cannot regard as satisfactory. The main accounting requirements of British company legislation are truth and fairness, the "true and fair" concept. Insufficient thought has been given to the significance of this concept. The objectives of the balance sheet and statement of earnings need to be defined clearly. Truth in real terms, is a desirable attribute of these documents, and may well be recognized as the primary objective of accounting reports. Fairness in accounting reports has to be related to some person or class of persons. The American concept of "generally accepted, principles of accounting" does not provide a satisfactory basis for judgment on accounting reports to stockholders, since it is open to a number of important criticisms.