What constitute 'True and Fair' is not defined under any law. In order to show a true and fair view what is to be ensured by an auditor ?

The main object of audit is to find out whether the financial statements prepared by a company show the true and fair view of the financial state of affairs of a company and if not then in what respect they are not showing. However, what constitutes true and fair is not defined under any law. In order to show a true and fair view the auditor should ensure that: The final accounts (Trading and Profit and loss Account and Balance Sheet) agree with the books of accounts. The closing stock is physically verified and valued properly. Intangible assets like goodwill, patents, preliminary expenses or other deferred revenue expenses are valued and written off properly. Expenses/income of Capital nature is not treated as revenue and vice versa. Contingent liabilities are not treated as actual liabilities and vice versa Provision is made for all known losses and liabilities Transactions are recorded on accrual basis, i.e. outstanding expenses, prepaid expenses, income accrued and advance income is recorded properly The exceptional or non-recurring transactions are disclosed separately in the accounts