Financial Auditing and Financial Reporting for Romanian State-Owned Companies– Modified Opinions and Observations

Costel Istrate

Journal of Accounting and Management Information Systems, 2018, vol. 17, issue 4, 513-531

Abstract: Starting with 2016, the Romanian authorities decided that 17 state-owned companies should use IFRS in their individual financial statements. The objective of this paper is to analyse how these companies have applied the accounting standards – before the transition to IFRS (2010-2017) – through the observations included in the reports delivered by the financial auditors. The main findings are: the presence of Big 4 auditors is quite limited, but in line with the situation of others categories of Romanian companies (especially the listed companies); the modified opinion are, by far, the most frequent (more than 78%). The main justifications of the modified opinions are the non-observance of the accounting rules on the provisions, followed by problems in the measurement of the assets/liabilities, and the consequences of the prudence principle. Emphasis of matters paragraph is also very present in the audit reports: the main observations in these paragraphs is about the going concern matters ant about the dependence of the state owned companies on the decisions of some public authorities.

Keywords: state-owned companies; audit reports; modified opinions; emphasis of matter paragraph; financial reporting (search for similar items in EconPapers)
JEL-codes: M41 M42 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ami:journl:v:17:y:2018:i:4:p:513-531

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