Acca aaa s21 Notes

matters communicated with those charged with governance
, we determine those matters that were of 
most significance in the audit of the financial statements of the current period and are therefore the 
key audit 
matters
. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure 
about the matter or when, in extremely rare circumstances, we determine that a matter should not be 
communicated in our report because the adverse consequences of doing so would reasonably be expected to 
outweigh the public interest benefits of such communication. 
The engagement partner on the audit resulting in this independent auditor’s report is [name]. 
[Signature in the name of the audit firm, the personal name of the auditor, or both, as appropriate for the 
particular jurisdiction]
[Auditor Address]
[Date]
September 2021 to June 2022 exams
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6. What is meant by ‘true and fair’?
'True and fair' is a widely used descriptor of financial reporting (e.g. in UK company legislation since 
1948). As near as probably matters, the word ‘true’ means that the information is factually correct and 
not materially misstated. 
‘Fair’ is a more difficult concept. You can have information which is accurate but which is nevertheless 
presented in a way which is unfair, and which perhaps conceals or does not reflect the commercial 
substance of transactions. For example, it would not be fair to present a bank loan as a non-current 
liability if, in fact, it is repayable in the next 12 months (i.e. a current liability). This would distort the 
financial position presented because the bank loan would not be included in assessing the company's 
liquidity as shown, for example, by the current ratio.
The IAASB prefers the phrase 'present fairly, in all material respect', which is deemed to be equivalent 
in ISAs. 
As corporate accounting increasingly involves the use of estimates and judgments, it is one of the 
recommendations for audit reform in the UK (Brydon Report, December 2019) that 'true and fair' be 
replaced with 'present fairly, in all material respects' in the Companies Act.