The Captain was sober, the First Mate was drunk. Was that true? Was that fair?

I’ve been a qualified accountant for a fair few years now.

I had the pleasure of bumping into my first auditing lecturer recently. It was at a business mixer event and even though it was a long time since we last saw each other he really hadn’t changed that much.

We got talking and I reminded him of something that he told me that I’ve remembered ever since and to me is a great way of explaining what is meant by “True and Fair”. Those of you that have studied financial reporting papers will be aware of the importance of “True and Fair” in connection with financial statements.

In summary, financial statements should provide what is generally understood as a true and fair view of the reporting entity’s financial position, performance and changes in financial position.

I always remember my lecturer telling me the story of the ship’s captain that was having a problem with his first mate who was always drunk. In the end the captain wrote an official entry in the captains log saying “Today, the first mate was drunk.”

The first mate was upset about this and the next time he took charge of the ship when the captain was asleep, he wrote in the log that “Today, the captain was sober”. This of course implied that on other days the captain wasn’t sober as he was drunk.

Now, the statement “today, the captain was sober” was clearly true but I’ll leave it up to you to decide whether or not it was fair!

Register to a free ACCA demo course
Register to a free CIMA demo course
Register to a free DipIFR demo course

EY confirm the women were real

Some of you may have heard of the website Ashley Madison. For those of you who haven’t heard of Ashley Madison, it’s a website where[..]

Are you better looking than your boss?

So who’s better looking – you or your boss? Well, if you are male and your boss is also male there could be some disappointing[..]

Would a good liar make a good accountant?

Do you have children? Have they ever told you a lie? Even a small teeny weeny lie? Well, if they have then although you may[..]

Subscribing To A Hot Seat

A lot of us are used to paying a monthly fee for a wide range of goods and services as customers. For example, we may[..]

Are these real Nikes?

Originally founded in 1964 as "Blue Ribbon Sports" by Bill Bowerman and Phil Knight the company officially became Nike Inc. 6 years later. Since then,[..]

EY to split into 2?

Interesting times for EY, the Big 4 accounting group. They have just reported record global revenues of $45.4 billion in the year to the end[..]