The Financial Reporting Council has today published an Opinion by Martin Moore QC that confirms the continued relevance of the ‘true and fair’ concept to the preparation and audit of financial statements following the enactment of the Companies Act 2006 and the introduction of international accounting standards.

The 'true and fair' concept has been a part of English law for many decades and was the subject of two important Opinions written by Lord Hoffmann and Dame Mary Arden. Since those Opinions were written, there have been some significant changes in accounting standards and company law which have led some to question whether the views expressed in those Opinions remain applicable.

In his opinion, Mr Moore has endorsed the analysis in the Opinions of Lord Hoffmann and Dame Mary Arden and confirmed the centrality of the true and fair requirement to the preparation of financial statements in the UK, whether they are prepared in accordance with international or UK accounting standards.

FRC Chief Executive Paul Boyle said:

“The FRC believes that this Opinion is an important confirmation that the concept of ‘true and fair’ is a key contributor to the integrity of financial reporting in the UK.”

In the future, the FRC and those of its operating bodies with responsibilities for accounting and auditing (i.e. the Accounting Standards Board, the Auditing Practices Board, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy and Actuarial Discipline Board) will have regard to Mr Moore’s Opinion.

1. The Financial Reporting Council (FRC) is the UK's independent regulator responsible for promoting confidence in corporate reporting and governance.
2. The FRC’s functions are exercised principally by its operating bodies (the Accounting Standards Board, the Auditing Practices Board, the Board for Actuarial Standards, the Financial Reporting Review Panel, the Professional Oversight Board and the Accountancy and Actuarial Discipline Board) and by the FRC Board. The Committee on Corporate Governance assists the Board in its work on corporate governance.
3. The text of the Opinion of Martin Moore QC as well as an FRC statement on the Opinion can be found on the FRC’s website at www.frc.org.uk/about/trueandfair.cfm. The texts of previous Opinions on the ‘True and Fair’ concept written by Lord Hoffmann and Dame Mary Arden in 1983, 1984 and 1993 can be found can also be found at the above website address.
4. All media enquiries should be addressed to Ian Rodger, Head of Communications, +44 (0)20 7492 2395 or email at: i.rodger@frc.org.uk.