Accounting convention

Accounting conventions have evolved to help practitioners overcome some of the practical problems associated with preparing accounting statements. They have developed in an attempt to ensure that the accounts reflect the true ‘substance’ of the business, i.e. that they present a “true and fair view”. The conventions act as guidelines in the preparation of accounts so that the accounts can be presented consistently and accurately. However, it should be noted that conventions are not black letter law and that there is scope for accountants to determine what, in their view, presents a “true and fair view” of a business.