Debating true and fair in Australia: An exercise in deharmonization?

Abstract

In spite of the intemationalization of securities markets and the harmonizing activities of the International Accounting Standards Committee and the European Community, it can be argued that company financial reporting in certain countries has been “deharmonized” in recent decades rather than harmonized. Australia and the United Kingdom are possible examples of this. This article discusses the phenomenon at the conceptual level by considering the reaction of Australian accountants to the explicit true and fair view requirement “imported” from U.K. company law by the Australian states from 1955 onwards. The article also considers the nature of the debate and its participants and the role of the debate in changing Australian legislative requirements in respect of truth and fairness. It seeks explanations for the quite different reactions of the standard-setters in the two countries to an overriding true and fair requirement and argues that these arose largely from the different national environments in which the standard-setters operated from the 1960s onwards.