Re-examination of a true and fair view opinion in the midst of pecuniary crisis for investment decision-making

Abstract

This paper is set out to examine the use of a true and fair opinion in audit reports with a view to proposing an alternative phrase that would limit the auditors‟ liability on the audit, and create confidence for investment decision-making. The views of accountants and business administrators in academics and practice; and the public within the academic environment represented the sample used as respondents for primary data collection. Data collected were analyzed using statistical tools like simple percentages and Kendalls measure of concordance. Amongst others, it was found that a majority of the respondents are of the opinion that a shift from the popular „a true and fair view‟ opinion would create more credibility on the audit function, and decision making. The researcher advocates an alternative phrase that would reflect the independent auditors‟ actual role in the financial audit along with standardized transparency rating-similar to the credit rating given to bonds, to enhance the integrity of the auditor, and dependability of prospective investor.

Keywords: Published report; true and fair; expectation gap; independent auditor; value.