Fundamental Auditing Principles and Concepts

Auditing:
Auditing refers to a systematic and independent examination financial statements and underlying records (books, accounts, documents and vouchers) of an organization to ascertain whether the financial statements present a true and fair view of the concern. It also attempts to ensure that the books of accounts are properly maintained by the concern as required by law

True and Fair View
True and fair view in auditing means that the financial statements are free from material misstatements and faithfully represent the financial performance and position of the entity.
Explanation
Although the expression of true and fair view is not strictly defined in the accounting literature, we may derive the following general conclusions as to its meaning:
True suggests that the financial statements are factually correct and have been prepared according to applicable reporting framework such as the IFRS and they do not contain any material misstatements that may mislead the users. Misstatements may result from material errors or omissions of transactions & balances in the financial statements.
Fair implies that the financial statements present the information faithfully without any element of bias and they reflect the economic substance of transactions rather than just their legal form.