I often wondered why people can see the same thing and come out with different conclusions. While thinking about this for some time and my knowledge of business, society and psychology I believe there is a fundamental reasons why information gets changed in a persons mind. People see what they are interested in and socialized to accept.
Consider two people in a conversation about a particular topic. Both hear something different and see the event differently. It is possible that the information they saw, retained and recalled is based on their memory and interest. If we are interested in a particular topic of information then we will remember that which either confirms our interest or that which helps us.
People skew information either inadvertently or intentionally. Through the natural course of paying attention to some information and ignoring others they may be inadvertently skewing the information. However, some skew information in order to obtain a benefit that wasn't necessarily derived from the conversation.
For example, a person could try and skew information to bolster their position with others or to try and reframe information. An important and regularly used method that is effective. Power structure makes this even more difficult when people who don't hold equal power dont have the ability to call the bluff without consequences.
Likewise, people have developed mental models throughout their lives and use those models for interpreting information. Those models filter out some information and leave other information. The interpretation of the event and top becomes skewed by the model. If the model is dysfunctional it will be consistently inaccurate.