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Spanish auditors and the 'true and fair view'

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Abstract

In 1990 a new Spanish 'Plan General de Contabilidad' (PGC) implemented the requirements of the EU 4th and 7th Directives in Spain. Included in the PGC is the requirement, derived from the 4th Directive, that accounts should present a 'true and fair view', in Spanish 'imagen fiel'. Where the term has been used in English speaking jurisdictions it has proved to have a variety of shades of meaning, and to have had strikingly different impact in different countries. Within the European Union the term has been seen as a 'Trojan horse', inserted into the 4th Directive to inject an Anglo-Saxon approach of flexibility and judgement dependent accounting into a Continental European accounting tradition of detailed prescription and uniformity. In this paper we report on a survey of the views and experience of Spanish auditors relating to 'imagen fiel'. Specifically, we: 1) Review the English language literature on 'true and fair view' to identify the key areas of controversy. 2) Consider the significance of the 'true and fair view' within the EU 4th Directive. 3) Report on the experience of Spanish auditors in working with this concept, their views on the value of the term, and their experience in use of the true and fair view 'override'.

Suggested Citation

  • Oriol Amat & John Blake & Ester Oliveras, 1999. "Spanish auditors and the 'true and fair view'," Economics Working Papers 409, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:409
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    1. K. Van Hulle & K. U. Leuven, 1993. "Truth and untruth about true and fair: a commentary on 'A European true and fair view' comment," European Accounting Review, Taylor & Francis Journals, vol. 2(1), pages 99-104.
    2. David Alexander, 1993. "A European true and fair view?," European Accounting Review, Taylor & Francis Journals, vol. 2(1), pages 59-80.
    3. David Alexander, 1993. "A European true and fair view?," European Accounting Review, Taylor & Francis Journals, vol. 2(1), pages 17-46.
    4. Craig Deegan & Pamela Kent & Ching-Ju Lin, 1994. "The True And Fair View: A Study Of Australian Auditors‘ Application Of the Concept," Australian Accounting Review, CPA Australia, vol. 4(7), pages 2-12, May.
    5. Alain Burlaud, 1993. "Commentary on the article by David Alexander 'A European true and fair view'," European Accounting Review, Taylor & Francis Journals, vol. 2(1), pages 95-98.
    6. Peter Walton, 1993. "Introduction: the true and fair view in British accounting," European Accounting Review, Taylor & Francis Journals, vol. 2(1), pages 49-58.
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    1. Claudia Catalina CIOCAN & Iuliana GEORGESCU & Mihai CARP, 2020. "The Perception of the Representatives of the Accounting Profession from Romania on the Relationship Between Conservatism and True and Fair View," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 18(159), pages 585-585.

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    More about this item

    Keywords

    Auditing; true and fair view; 4th European Directive;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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