Truth, Faithfullness and Reliability Vagueness in the Accounting Theory as a Challenge for Accounting Teachers

Abstract

The study was aimed at examining the notion of truth, faithfulness and reliability approaches in chosen social sciences, and accounting theoretical foundations among them. In order to explore whether accounting conceptual framework together with accounting theoreticians have developed a satisfactory understanding of the notion of truth, faithfulness and reliability, a literature review was undertaken seeking the definitions and classifications of truth that might be useful in business practice, especially in accounting preparation of financial reports. The main method used in order to achieve the aim was a critical analysis of the contemporary English and Polish literature on accounting, philosophy, as well as psychology and sociology to go to the comparison of the truth and reality perception from various perspectives. The results have shown that the recent changes made in foundations of accounting theory did not provide a satisfactory solution to the problem. The researchers contribute to the existing literature as there is an on-going debate on the direction and extent of changes in the international harmonization and standardisation of accounting that is focused on the problem of faithfulness of the information disclosed in the financial reports. It is argued that the understanding of truth is a key to an understanding of accounting theory and an inevitable factor of proper practice of accounting. Considering accounting teaching process, there was a qualitative analysis conducted based on accounting curricula of Polish public university with long tradition in accounting undergraduate and graduate education. With regards to the accounting curricula of a chosen university, it has been observed that there is an urgent need for a discern of accounting curricula in order to make substantive contents corresponding with developing economic surroundings of business entities preparing financial reports. Moreover, the importance of non-algebraic approach is stressed as a result of the study. Key words: economic reality, faithfulness, faithful representation, financial reporting, truth in accounting, accounting education.

Assesment of the Quality of Reporting Information on CO2 Emission Rights on the Example of Energy Sector Groups Listed on the Warsaw Stock Exchange

“…Data presented in the financial statements, including the data on CO2 emission rights, not only have to be true, but also properly compiled as a compact, structured, internally consistent set, and should reflect a true and fair overview of the entity's financial and property standing at the balance sheet date. This means that showing true information in the financial statements, i.e., information consistent with the material truth, does not yet guarantee the fulfillment of the true and fair view principle relating to the entire picture of the economic entity standing [33,34,35,36]. The main issue is the correct valuation of the asset and equity, requiring the use of an appropriate parameter and method of valuation.…”