THE IMPORTANCE OF PREPARATION OF FINANCIAL STATEMENTS IN THE PROCESS OF MAKING SIGNIFICANT MANAGEMENT DECISIONS BY TOP MANAGEMENT IN ENTERPRISES

Ivan Arnautovic, Goran Vitomir, Veljko Samardzic, Tatjana Davidov, Sanda Nastic and Slobodan Popovic
Additional contact information
Ivan Arnautovic: HIGH SCHOOL OF ENTREPRENEURSHIP, 11000 BEOGRAD, REPUBLIC OF SERBIA
Goran Vitomir: NOVA BANKA A.D. BANJA LUKA, REPUBLIKA SRPSKA, BOSNIA & HERZEGOVINA
Veljko Samardzic: VOCATIONAL SCHOOL FOR ENTREPRENEURSHIP, KARADORDEVA 15, 11000 BELGRADE, REPUBLIC OF SERBIA
Tatjana Davidov: INFOSTAN TEHNOLOGIJE D.O.O. BEOGRAD, 11000 BEOGRAD, REPUBLIC OF SERBIA
Sanda Nastic: JKP TRZNICA NOVI SAD, ZIKE POPOVICA 4, 21000 NOVI SAD, REPUBLIC OF SERBIA
Slobodan Popovic: AUTHORIZED PUBLIC SECTOR INTERNAL AUDITOR JKP GRADSKO ZELENILO NOVI SAD, MLADENA LESKOVCA 1, 21000 NOVI SAD, REPUBLIC OF SERBIA

Annals - Economy Series, 2021, vol. 4, 97-103

Abstract: The preparation of financial statements is of great importance for the normal operation of heterogeneous enterprises. Financial reporting can contribute to the improvement of the overall business of the company by enabling the improvement of crucial business decisions made by the top manager. Financial reports that present the company's business in a realistic way can enable top management to better manage the company, because business decisions are made in such a timely manner and with a greater dose of security. At the same time, making new business decisions is safer if the financial statements reflect the real business of the company from the previous business period. In this way, financial reporting can improve and modernize the overall management of companies, which is of great importance in the business of companies in transition countries. Initiating a change in the substance of financial reporting can be very different. The authors point out that in the event of a change in the financial reporting framework, the key role can be played by internal auditors 'reports received by top management in the form of internal auditors' recommendations, but also by internal control reports submitted to top management. The processes of establishing internal control and internal audit mechanisms are aimed at substantially improving the overall management of the company.

Keywords: valid financial statements; decision; internal control and audit (search for similar items in EconPapers)
Date: 2021
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