Balance sheet is an integral part of the financial reports of a company. It is the snap shot of the state of affairs of the company at the end of its fiscal period. However, it does not necessarily reflect the true value of the company. Financial reports give a true and fair view of the company (FSA Handbook 2004) as the audit standard for financial reporting. Discrepancies arise because of the cost of accounting accuracy, the different valuation method, and financial reporting principles. In the following paragraphs, I will further analyze the discrepancy and its causes.
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