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July 07, 2020, 04:23:26 am

Author Topic: Verifiability vs Faithful Representation  (Read 269 times)  Share 

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student1081

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Verifiability vs Faithful Representation
« on: February 01, 2020, 04:13:05 pm »
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Hey guys,
Can someone explain to me the difference between these two qualitative characteristics? I sometimes get confused between them in some scenarios presented in certain questions.
Many thanks!
2019: Methods [40]
2020: Latin, Accounting, Specialist Mathematics, English, Chemistry

idrk

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Re: Verifiability vs Faithful Representation
« Reply #1 on: February 05, 2020, 08:51:04 pm »
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Faithful Representation requires that financial information is a faithful representation of the real world event, which is complete and free from material error and bias. This mainly refers to ensuring that the financial information is accurate and not miss leading, whether it be valuing at fair value or use of source documents etc.

This differs from Verifiability, as Verifiability refers solely to source documents ability to allow other observers to come to the same conclusion. In this sense Verifiability is limited to the use source documents to ensure reports are accurate, while faithful representation encompasses all accounting decisions/methods in order to ensure reports are an accurate representation of the business.
Methods 43 [2018] Physics 38 [2018] Accounting 45 [2019]
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student1081

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Re: Verifiability vs Faithful Representation
« Reply #2 on: February 05, 2020, 09:04:07 pm »
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Thanks so much for the response! I appreciate it greatly!
2019: Methods [40]
2020: Latin, Accounting, Specialist Mathematics, English, Chemistry