Faithful Representation In Accounting

Faithful Representation Name Date Professors name Program of Study Faithful Representation The IAS 1 rule requires that all financial transactions be conveyed with fair representation, which means that any reported financial information must be materially accurate (Ruhl Smith, 2018), presented in a manner that reflects the true purpose and meaning of the data being shown. The requirement of fair representation is a qualitative assessment of financial information, whereas requirements on accuracy or correctness are simply quantitative, as they provide quantitative numbers, percentages, and so forth. The main argument for fair representation is that it ensures information is complete, neutral, and free of errors (Atrill McLaney, 2019). The main arguments against fair representation or other accounting standards allowing company directors to use reasonable judgements is that standardisation does not account for differences in how firms operate across industry or region they can be costly and they can be subject to political bias or influence. Fair representation has three requirements completeness, neutrality, and lack of material errors (Ruhl Smith, 2018). The requirement of completeness means that all relevant information being presented in financial reporting is included. For example, a firm might acquire new assets by leasing new properties. A lease also has