Question

The concept of true and fair pervades the financial accounting and reporting process. It influences the decisions
regarding the collection, classification, measurement, and summarization of data concerning the results of an
enterprise’s economic activities. It also bears on decisions concerning the presentation of that data and the
related disclosures in financial statements. As applied by preparers and auditors, the concept of true and fare
is generally understood ultimately to involve determination of the importance of a matter for financial
reporting purposes. From the light of the above statement, answer the following questions. Use your own views
and response to each question.
a) What is true and fair and why is it difficult to apply the concept? (200 Words)
b) What factors should be considered in deciding whether information is true and fair? (200 Words)