Question

Which of the following is the best description of fair presentation in accordance with IAS 1, Presentation of Financial Statements?

A The financial statements are accurate.
B The financial statements are as accurate as possible given the accounting systems of the organisation.
C The directors of the company have stated that the financial statements are accurate and correctly prepared.
D The financial statements are reliable in that they reflect the effects of transactions, other events and conditions.

Answer 1

Option D, The financial statements are reliable in that they reflect the effects of transactions, other events, and conditions, is the best description of fair presentation in accordance with IAS 1, Presentation of Financial Statements.

Step-by-step explanation:

The best description of fair presentation in accordance with IAS 1, Presentation of Financial Statements, is option D: The financial statements are reliable in that they reflect the effects of transactions, other events, and conditions.

Fair presentation means that the financial statements provide a true and fair view of the financial position, performance, and changes in financial position of an entity. It requires the financial statements to be free from material misstatements and to faithfully represent the financial performance and position.

For example, if a company uses accurate and reliable accounting systems and practices, the financial statements it prepares would be considered to provide a fair presentation of its financial position and performance.