A Study on the Relationship between Audit Opinion and Accounting Principles
Author:
Associate Prof. Ovidiu-Constantin BUNGET, Ph. D.; Univ. Lecturer. Alin-Constantin DUMITRESCU. Ph. D.
JEL:
M42
DOI:
Keywords:
financial audit, accounting principles, audit opinion, financial crisis, taxtion
Abstract:
What does the auditor offer? The answer can be simple: credibility for financial reporting and accounting information. He can be seen as a „guardian of the true and fair view”, and his report as a certificate which attests „the healthiness of financial reporting”. How can the audit profession develop? By consolidating the credibility offered by the auditor. To demonstrate that there is a direct link between following accounting principles and the auditor’s opinion, a link which, of course, passes through the „filter” of professional judgement, the study starts-off from the information offered by a representative mid-sized audit cabinet from western Romania. The starting point of the research is comprised of a sample of audit opinions which were expressed for statutory audits of the financial years 20XX and 20XY. The study follows the typology of the sampled audit opinions for the two consecutive years and it also follows, on one hand, the reasoning based on which the auditor expresses opinions other than unqualified, and on the other hand, the effects on the yearly financial statements of not abiding to accounting law, and as a consequence, the effects on the audit opinion. Generally speaking, departing from accounting law principles when drafting the annual financial statements represents one of the elements that generate the modification of the audit opinion, and the main causes of this type of behaviour on the part of the audited companies are connected to the influence of fiscal-minded decisions, window dressing and the inadaptability to the conditions of the economical and financial crisis. The relevance of the conclusions is not only based on the premises and the nature of the information subjected to the analysis, but also by the practical confirmation of these aspects by the involved part of the economic environment (investors, shareholders, administrators, CEOs).\r\n\r\n