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 ...
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'.
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