The companies Act requires that all limited liability companies’ appoint an auditor whose task is to express an independent opinion as to whether the financial statements prepared by the directors show a true and fair view of the financial performance and position of a company. What constitutes true and fair is not defined by the Act. Previously the auditor was required to certify as to the truth and correctness of accounts, the phrase true and correct implying arithmetic accuracy. Such an approach ignored the overall view of the accounts, which are prepared using subjective accounting policies and would be difficult to prove. It is not possible to certify that one set of accounts is the correct set, because many accounting areas are subject to a wide variety of interpretations and therefore presentation. As a result the auditor is only required to express an opinion as to whether the accounts show a true and fair view of the state of affairs of the company and of its profit or loss for the period.


The auditor only expresses an opinion on the accounts. He does not certify them as being correct.