The Perception of the Representatives of the Accounting Profession from Romania on the Relationship Between Conservatism and True and Fair View
Author:
Claudia Catalina CIOCAN, Iuliana GEORGESCU, Mihai CARP
JEL:
M41
DOI:
10.20869/AUDITF/2020/159/022
Keywords:
true and fair view; conservatism; creative accounting; questionnaire; accounting principles; earnings management
Abstract:
Assuming that there is a potential conflict between true and fair view and conservatism, the authors aimed to identify, by means of a survey, the perception of the representatives of the accounting profession from Romania, namely chartered certified accountants, licensed accountants, financial auditors and accountants other than chartered certified and licensed accountants, on the following aspects: the meaning of true and fair view, the need to assign a universally accepted definition to this concept, the meaning of creative accounting, the use of conservatism as a way to manipulate earnings and, last but not least, on the relationship between conservatism and true and fair view. The result indicated that the most representative interpretation of true and fair view is „the application, in good faith, of all accounting principles”. Regarding creative accounting, this was perceived mainly as a way to manipulate earnings within the law, most of the respondents considering that the current accounting regulations facilitate the existence of such practices. Within the limit of the analyzed sample, the relation between true and fair view and conservatism has been perceived as complementary, in the sense that it implies the use of conservatism in order to obtain an image that represents the economic reality.
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