Perceptions of true and fair view: Effects of professional status and maturity

Abstract

This paper examines the effects that professional status and maturity have on the understanding and perception of the true and fair view (TFV) and its True and fair override in Spain. The effects were deduced by a survey conducted on students and auditors. The results show that, while the goal of reaching the TFV is fully integrated into the Spanish accounting system, the implications of such an objective are far from what would be expected. The evidence suggests a practical rejection of the overriding aspect associated with the TFV notion in the EU Directives which is demonstrated by a preference to follow the accounting standards in all cases rather than having to choose when not to apply them in order to achieve this objective. This aversion is logical in a country whose legislation allows little room for flexibility. Finally, the study identifies a pattern of change according to the participant’s professional status and maturity. It is observed that the younger and less professional participants are more concerned with obtaining the TFV than the strict coherence with the accounting standards. However, as the participants evolve according to age and professional status they prefer the TFV to be obtained by a rigorous following of the standards without having to override them, they are also more demanding for a detailed definition of TFV and are much less favourable to the imposition of fines where the TFV is not achieved by following the accounting standards.