Alternatively, these assets can be valued at net book value, which is the original cost adjusted for depreciation or amortization. It is really important that the information reflected in the books are correct and transparent. In other words, the favorable and unfavorable financial information is presented in the financial statements. In 2009, Satyam Computer Services, an Indian based company, presented falsified accounts in order to elevate profit. While accounting for assets at original cost is preferred in many instances, Jamie Pratt does relate in "Financial Accounting in an Economic Context" a situation in which an asset is valued and reported in the balance sheet at the net present value. It creates goodwill for the company. So companies that follow good accounting standards based on objectivity principle are free from the pressure of government sanctions. Any false record will question the credibility of the entire book. Auditors are extremely careful while auditing books and goes through each and every documentation minutely. This helps financial statements to be trustworthy and be useful for evaluation. Objectivity principle of accounting states that each and every financial transaction should be supported with evidence. ABC Limited has applied for loans in the bank. The company’s books contains Balance Sheet, Profit and loss Statement, Cash Flow Statement, and Shareholder equity. This is the objectivity principle, where all the assets shown in the books should have proper documentation and should be audited. So the records are completely factual, and it makes the book transparent. So there should be a team appointed by the company in order to keep track of the changing accounting principles and act accordingly from time to time. Ramalinga Raju, the chairman of Satyam computers, confessed the crime, and it is considered the biggest accounting scandal in India. The objectivity principle extends to internal auditors and CPA firms as well. The value set of a final accounts presented to managements depends so much on basic assumptions which has been presented by the accountant. This will require documentation for all entries. This has been a guide to What is Objectivity Principle & its Definition. – Jim is an accountant who is the CFO of Fisher Corp. So this type of record-keeping is very costly and requires a lot of procedures in place to do so. The company’s books are followed by investors, suppliers, stakeholders, government agencies, shareholders, and other parties. In practical terms, an essential attribute of each measurement in the statements is that an identical result would be obtained by two independent observers, not influenced by personal views or perceptions.