Conservatism, or Prudence

Frauds do get committed by inflating profits and by showing a financial position much better than what it really is. If two figures are possible, the lower one is to be preferably indicated in case of profits and assets valuation; and the higher figure in case of liabilities and costs. [As abiding by materiality convention, the omitted figure may, if and by whichever manner appropriate, be indicated elsewhere with proper reference.] However, there is to be read no directive that figures of profits or assets by deliberately deflated nor of liabilities or costs be inflated. Essentially, CAUTION IS ADVOCATED. Moreover, "PRUDENCE DOES NOT JUSTIFY CREATION OF SECRET OR HIDDEN RESERVES.