Perceptions of True and Fair View: Effects of Professional Status and Maturity

True and Fair Override: Accounting Expert Opinions, Explanations from Behavioural Theories, and Discussions for Sustainability Accounting

“…This contrasts to previous research under Spanish GAAP, whereby a sanction was considered appropriate especially by students. The evidence suggests that students tended to be more justice orientated than accounting academics and professionals, who show a more sceptical vision [8].…”

“…Differences between auditors and finance directors were found in the UK [9,31]. Gonzalo-Angulo et al [8] focus on a sample of undergraduate students, postgraduate students enrolled in an audit master course, and auditors, and they find a different understanding in the area of TFV, according to the participant's professional status and maturity. Garvey et al (2017) [35] also detect that academics and students do not share similar cognitive structures when different aspects of TFV are tested.…”

“…Livne and McNichols [34] found that UK firms invoking more costly overrides report weaker performance and have less informative financial statements and lower earnings quality. More recently, Gonzalo Angulo et al [8] use a sample of auditors in public practice and Spanish students (undergraduates enrolled in final year and postgraduate students enrolled in an audit masters course) and find that participants prefer to follow the accounting standard rather than consider the overriding aspect that is included in the EU Directive, when compliance with the standards does not achieve a TFV. The evidence also suggests that the understanding of TFV is different depending on the participant's professional status and maturity.…”

“…Prior studies suggest that, in practice, the TFO is regarded as "a just in case" option, where there is no real incentive to use it. Companies have reservations about using it, even when it would avoid the presentation of misleading financial information by strictly complying with standards rather than faithfully representing the reality of the company (see, e.g., the discussion provided by [2][3][4][5][6][7][8]). This raises the question as to whether the future of the TFO needs to be questioned.…”

“…The basis of any court decision in this area would revolve around whether the company's financial statements show a TFV and while compliance with relevant specific accounting standards is considered a prime indicator of TFV, it may not be the only one. This has led to tension in understanding the relationship between compliance with IFRS, TFV, FP, application of the TFO, and a rules vs. principles-based approach (see e.g., [2,6,[8][9][10][11][12][13][14]).…”