Fairness in Financial Reporting

ABSTRACT Public companies in most countries are legally required to publish annual accounts, and these are widely used for making financial decisions. To prevent users of accounts being misled into making disastrous decisions, all major Western countries have introduced controls on the ways accounts are presented. By British and EEC law a company's accounts must give a 'true and fair view' of its financial state.
It has become widely accepted that if accounts are prepared according to standards drawn up by the accounting profession itself, then they can be considered as being 'true and fair'. In this paper it is argued that such an interpretation of 'true and fair' gives inadequate protection to users. How users' interests might be better protected is discussed. Finally, it is suggested that Rawls' notion of a 'veil of ignorance' could be used to ensure that in the preparation of accounts equal regard is paid to the interests of different types of user.     

A NOTE CONCERNING THE MATCHED GROUP DESIGN

Despite its strong logical and technical appeal, the employment of the matched group design in applied psychological research has been restricted by practical problems associated with its use. A procedure which circumvents several of the problems of conventional matching was described. Basically, the procedure involves pairing of subjects from two or more treatment pools after the completion of training or other treatment, but without knowledge of the performance of the subjects. Three empirical tryouts of the procedure were summarized. The procedure worked quite well when only two groups were involved and was fairly satisfactory when applied to four groups. Other experimental designs may be better when more than two groups are involved. It was concluded that matching from treatment pools after differential treatment of the pools warrants more extensive use in applied psychological research than it has been accorded in the past.