FRC to revise the meaning of 'true and fair'
The decision to review the original legal opinion on what it means to have ‘true and fair accounts’ follows recent questions about its current relevance from the investors
The regulator has tasked a legal expert with revising the profession’s
official 20-year-old formal opinion of ‘true and fair’.
Paul Boyle, chief executive of the
Financial Reporting
Council, said this week that the decision to review the original legal
opinion on what it means to have ‘true
and fair accounts’ as provided by Hoffmann and Arden in 1983 and 1984
followed recent questions about its current relevance from the investors and
those who prepare accounts.
‘There were concerns raised about whether the concept of “true and fair” is
still relevant in the context of international accounting standards, EU
legislation and even the Companies Act.
‘We sought to get legal opinion which would be an authoritative statement of
what the present day legal position would be, given the changes in legislation
over the last 20 years. We hope the opinion will set the record straight,’ said
Boyle.
Boyle declined to name the QC who has undertaken the task, but said that the
expert is to also review all legal cases that have emanated since Hoffmann and
Arden’s views 20 years ago in presenting a new legal opinion.