Highlight concept of faithful representation and is it valid or not?
Highlight concept of faithful representation and is it valid or not?
The concept of Faithful representation advocates that the financial statements and information should represent what it claims to represent. In other words, it should actually be what it says it is
In other words, the concept states that for a piece of financial information to be useful, besides being relevant, it should faithfully represent what it purports to represent. Faithful representation, thus, means representation of the substance of a phenomenon and not just the form of it
Ordinarily, three characteristics are said to be essential in a faithful representation:
1. Completeness : All necessary information should be adequate or having full disclosure property
2. Neutrality : Such information should be fair and free of any bias
3. Error free: Such information should have no inaccuracies and omissions
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