Pub Date : 2020-01-01DOI: 10.20869/auditf/2020/157/001
G. Tănase, Aurelia Ștefănescu
For the external audit to ensure the credibility of the financial statements, it is a mandatory and vital requirement to maintain the independence in audit engagements. In practice, when performing the audit engagements there are various threats to independence, such as the non-audit services, the financial dependence of the auditor on its client, and the familiarity between client and auditor. The risk they pose to independence may be diminished through the rotation policy of the partner and audit firm. The rotation (voluntary or compulsory of the partner or audit firm) generates, according to the professional literature, both advantages and disadvantages, the legal practices and regulations being different from one country to another. Although the Romanian legislation does not require the rotation within the audit engagements, we believe that adopting these practices is an indication of maintaining independence and conducting a quality audit. Starting from this aspect, our research aims at the rotation practices of the banking institutions operating on the Romanian market. The results show that most banks adopt their own rotation policy of the partner and audit firm. This research may be useful to interest-holders within the banking system, as well as to the regulatory bodies in Romania.
{"title":"Independence in Financial Audit Engagements. The Case of Romanian Banks","authors":"G. Tănase, Aurelia Ștefănescu","doi":"10.20869/auditf/2020/157/001","DOIUrl":"https://doi.org/10.20869/auditf/2020/157/001","url":null,"abstract":"For the external audit to ensure the credibility of the financial statements, it is a mandatory and vital requirement to maintain the independence in audit engagements. In practice, when performing the audit engagements there are various threats to independence, such as the non-audit services, the financial dependence of the auditor on its client, and the familiarity between client and auditor. The risk they pose to independence may be diminished through the rotation policy of the partner and audit firm. The rotation (voluntary or compulsory of the partner or audit firm) generates, according to the professional literature, both advantages and disadvantages, the legal practices and regulations being different from one country to another. Although the Romanian legislation does not require the rotation within the audit engagements, we believe that adopting these practices is an indication of maintaining independence and conducting a quality audit. Starting from this aspect, our research aims at the rotation practices of the banking institutions operating on the Romanian market. The results show that most banks adopt their own rotation policy of the partner and audit firm. This research may be useful to interest-holders within the banking system, as well as to the regulatory bodies in Romania.","PeriodicalId":30958,"journal":{"name":"Audit Financiar","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2020-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45965318","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-11-01DOI: 10.20869/auditf/2019/156/026
Mihai Carp, I. Georgescu
The quality of financial information is a decisive landmark in the decision-making process of all users. This is why meeting the quality criteria should be a desideratum for all the stakeholders involved in the development and verifying of financial reports. In this context, this paper aims to analyze the influence exercised by the audit opinion on the quality of the financial information reported by Romanian companies listed on the regulated market of the Bucharest Stock Exchange. Quality is assessed in terms of the degree of manipulation of operational activities (intervention in the conduct of commercial transactions and controlling the cost of the goods sold via overproduction, respectively). The analyzed data cover a time frame of 6 financial years (2012-2017), and the dependency relations are also tested by introducing control variables such as: company size, indebtedness, profitability and reputation of the auditor. The results obtained highlight the contribution of the audit opinion to boosting the quality of financial information, measured based on the degree of manipulation of sales (under the aspect of value and the time when the transactions were made). In case of manipulation via overproduction, the audit opinion does not exercise significant influences, reflecting possible limitations of the audit endeavor in terms of its capacity to identify corrupt activities associated with production. The auditor’s reputation does not have a significant impact on the manipulation of sales, only in overproduction case this characteristic having a positive role.
{"title":"The Influence of Audit Opinion on the Degree of Real Earnings Management. The Case of Romanian Listed Companies","authors":"Mihai Carp, I. Georgescu","doi":"10.20869/auditf/2019/156/026","DOIUrl":"https://doi.org/10.20869/auditf/2019/156/026","url":null,"abstract":"The quality of financial information is a decisive landmark in the decision-making process of all users. This is why meeting the quality criteria should be a desideratum for all the stakeholders involved in the development and verifying of financial reports. In this context, this paper aims to analyze the influence exercised by the audit opinion on the quality of the financial information reported by Romanian companies listed on the regulated market of the Bucharest Stock Exchange. Quality is assessed in terms of the degree of manipulation of operational activities (intervention in the conduct of commercial transactions and controlling the cost of the goods sold via overproduction, respectively). The analyzed data cover a time frame of 6 financial years (2012-2017), and the dependency relations are also tested by introducing control variables such as: company size, indebtedness, profitability and reputation of the auditor. The results obtained highlight the contribution of the audit opinion to boosting the quality of financial information, measured based on the degree of manipulation of sales (under the aspect of value and the time when the transactions were made). In case of manipulation via overproduction, the audit opinion does not exercise significant influences, reflecting possible limitations of the audit endeavor in terms of its capacity to identify corrupt activities associated with production. The auditor’s reputation does not have a significant impact on the manipulation of sales, only in overproduction case this characteristic having a positive role.","PeriodicalId":30958,"journal":{"name":"Audit Financiar","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42304741","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-11-01DOI: 10.20869/auditf/2019/156/027
O. Bunget, A. Brinduse
The purpose of this article is to emphasize the strong connection between managers and controllers, as well as some of the benefits of their relationship. The complexity of the operations within a company, as well as the dynamic environment have led to the development of the controlling department. Due to the changes that the controller profession has undertaken, it was considered necessary to carefully analyze the literature that puts into discussion this subject. Moreover, the information discovered within the literature will be correlated with the ones from the companies which have controlling departments, in order to ensure the relevance of the study.
{"title":"Connection Between Controlling Department and Management – Premise for Achieving Organizational Objectives","authors":"O. Bunget, A. Brinduse","doi":"10.20869/auditf/2019/156/027","DOIUrl":"https://doi.org/10.20869/auditf/2019/156/027","url":null,"abstract":"The purpose of this article is to emphasize the strong connection between managers and controllers, as well as some of the benefits of their relationship. The complexity of the operations within a company, as well as the dynamic environment have led to the development of the controlling department. Due to the changes that the controller profession has undertaken, it was considered necessary to carefully analyze the literature that puts into discussion this subject. Moreover, the information discovered within the literature will be correlated with the ones from the companies which have controlling departments, in order to ensure the relevance of the study.","PeriodicalId":30958,"journal":{"name":"Audit Financiar","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47586195","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-11-01DOI: 10.20869/auditf/2019/156/028
Silviu Duțulescu, Ileana Nisulescu-Asfrahzadeh
Tax evasion is a very complex phenomenon, with wide social implications, but with a special manifestation in the economic sector, managing in some cases to seriously affect the standard of living of citizens. The research of this phenomenon started from studies commissioned in 2015 by the European Parliament, which established the losses registered by each member country of the European Union as a result of the phenomenon of tax evasion. Based on this information, new elements have been added from the studies of other authors as well as from our own investigation and in this way the connection between the size of the tax evasion and the volume of the underground economy at the level of the European Union states has been demonstrated. An important role in this demonstration was represented by the variable, the level of taxation, which showed that the fiscal pressure can to some extent influence the evasive behavior of the commercial entities that choose to increase their profit by techniques located outside the legal boundaries. An improvement of evasion behavior can come from auditors who, through the recommendations they make to their clients, can make them aware of the danger posed by the tax evasion on the health of the national economy.
{"title":"Tax Evasion in the Countries of the European Union - Challenges for Professionals","authors":"Silviu Duțulescu, Ileana Nisulescu-Asfrahzadeh","doi":"10.20869/auditf/2019/156/028","DOIUrl":"https://doi.org/10.20869/auditf/2019/156/028","url":null,"abstract":"Tax evasion is a very complex phenomenon, with wide social implications, but with a special manifestation in the economic sector, managing in some cases to seriously affect the standard of living of citizens. The research of this phenomenon started from studies commissioned in 2015 by the European Parliament, which established the losses registered by each member country of the European Union as a result of the phenomenon of tax evasion. Based on this information, new elements have been added from the studies of other authors as well as from our own investigation and in this way the connection between the size of the tax evasion and the volume of the underground economy at the level of the European Union states has been demonstrated. An important role in this demonstration was represented by the variable, the level of taxation, which showed that the fiscal pressure can to some extent influence the evasive behavior of the commercial entities that choose to increase their profit by techniques located outside the legal boundaries. An improvement of evasion behavior can come from auditors who, through the recommendations they make to their clients, can make them aware of the danger posed by the tax evasion on the health of the national economy.","PeriodicalId":30958,"journal":{"name":"Audit Financiar","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44889166","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-11-01DOI: 10.20869/auditf/2019/156/025
O. Bătae
Nowadays, the communication between the auditors and both shareholders and stakeholders has a significant role in delivering value. Therefore, the new format of the audit reports that will be analysed in the following chapters, has not only the role to improve the dialogue between shareholders and directors, but also to provide the key to the audit „black box” in order to explain in details what is the work performed by an auditor, leading to an increase in the trust placed in an auditor by the shareholders. This study has two main objectives, the first one being represented by the identification and analysis of the components of an audit report, while the second one is represented by identifying and analysing the key audit matters. The third objective which is an adjacent one is represented by a comparative analysis of the audit fees by taking into account different indicators, such as profit before tax or total assets.
{"title":"Expanded Audit Reports and Audit Fees – A Content Analysis on the Romanian Banking Sector","authors":"O. Bătae","doi":"10.20869/auditf/2019/156/025","DOIUrl":"https://doi.org/10.20869/auditf/2019/156/025","url":null,"abstract":"Nowadays, the communication between the auditors and both shareholders and stakeholders has a significant role in delivering value. Therefore, the new format of the audit reports that will be analysed in the following chapters, has not only the role to improve the dialogue between shareholders and directors, but also to provide the key to the audit „black box” in order to explain in details what is the work performed by an auditor, leading to an increase in the trust placed in an auditor by the shareholders. This study has two main objectives, the first one being represented by the identification and analysis of the components of an audit report, while the second one is represented by identifying and analysing the key audit matters. The third objective which is an adjacent one is represented by a comparative analysis of the audit fees by taking into account different indicators, such as profit before tax or total assets.","PeriodicalId":30958,"journal":{"name":"Audit Financiar","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43015997","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-11-01DOI: 10.20869/auditf/2019/156/024
A. Tudor, G. Cordoș, M. Fülöp
Today's students are part of Generation Y (Millennials) and have certain specific characteristics that employers cannot ignore when they enlarge their staff. The profile and expectations of this generation differ greatly from those of previous generations. In this regard, the research aims to question the undergraduate and master students that attend or have attended economic background Universities in Romania, in order to highlight the understanding and attractiveness of the profession of financial auditor for these generations. The results of the study reveal a good knowledge of the responsibilities of the auditors and the existence of an attraction for this profession among Millennials. Given the rather demanding degree of the profession, and the desire of the Y generation to have a balance between personal lives and service the study shows which aspects should focus the employers, to ensure the sustainability of the activity from a human capital point of view.
{"title":"Financial Auditor Profession’s Attractiveness for Y Generation Millennials","authors":"A. Tudor, G. Cordoș, M. Fülöp","doi":"10.20869/auditf/2019/156/024","DOIUrl":"https://doi.org/10.20869/auditf/2019/156/024","url":null,"abstract":"Today's students are part of Generation Y (Millennials) and have certain specific characteristics that employers cannot ignore when they enlarge their staff. The profile and expectations of this generation differ greatly from those of previous generations. In this regard, the research aims to question the undergraduate and master students that attend or have attended economic background Universities in Romania, in order to highlight the understanding and attractiveness of the profession of financial auditor for these generations. The results of the study reveal a good knowledge of the responsibilities of the auditors and the existence of an attraction for this profession among Millennials. Given the rather demanding degree of the profession, and the desire of the Y generation to have a balance between personal lives and service the study shows which aspects should focus the employers, to ensure the sustainability of the activity from a human capital point of view.","PeriodicalId":30958,"journal":{"name":"Audit Financiar","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42905873","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-11-01DOI: 10.20869/auditf/2019/156/022
D. Botez
{"title":"Comparative Study at European Level on the Criteria that Determine the Obligation to Audit the Financial Statements and the Organizational Structure of the Statutory Audit Oversight Body","authors":"D. Botez","doi":"10.20869/auditf/2019/156/022","DOIUrl":"https://doi.org/10.20869/auditf/2019/156/022","url":null,"abstract":"","PeriodicalId":30958,"journal":{"name":"Audit Financiar","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48001946","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-01DOI: 10.20869/auditf/2019/155/017
N. Xhani, Marioara Avram, Ilir Mece, L. Cela, Albania Economy
The audit process has progressed and improved with the economic and political development of each country as response to the challenges of society and politics in each country and as result of the global changes' effect. The purpose of this study is to analyze the development of the audit concept and to study the main factors influencing the internal audit legislation in Albania and Romania. The research aimed to highlight some aspects of theory about how the internal audit has emerged in Albania and Romania, and to provide an overview of the differences and similarities of the two legislations on public internal audit. A detailed comparative study of the laws of both countries has concluded that Albania's legislation needs to be revised, as there are some issues that are not fully covered by the law. Efforts to improve the internal audit activity are numerous, but much remains to be done. Although Romania has a more comprehensive and detailed internal audit law, both countries need to strengthen the enforcement of legislation. For a reasonable use of public funds, the authors advocate the imposition of "restrictive"/"blocking" mechanisms or procedures for entities that do not comply with the legal provisions on internal audit.
{"title":"Comparative Study on the Organization of Internal Public Audit in Albania and Romania","authors":"N. Xhani, Marioara Avram, Ilir Mece, L. Cela, Albania Economy","doi":"10.20869/auditf/2019/155/017","DOIUrl":"https://doi.org/10.20869/auditf/2019/155/017","url":null,"abstract":"The audit process has progressed and improved with the economic and political development of each country as response to the challenges of society and politics in each country and as result of the global changes' effect. The purpose of this study is to analyze the development of the audit concept and to study the main factors influencing the internal audit legislation in Albania and Romania. The research aimed to highlight some aspects of theory about how the internal audit has emerged in Albania and Romania, and to provide an overview of the differences and similarities of the two legislations on public internal audit. A detailed comparative study of the laws of both countries has concluded that Albania's legislation needs to be revised, as there are some issues that are not fully covered by the law. Efforts to improve the internal audit activity are numerous, but much remains to be done. Although Romania has a more comprehensive and detailed internal audit law, both countries need to strengthen the enforcement of legislation. For a reasonable use of public funds, the authors advocate the imposition of \"restrictive\"/\"blocking\" mechanisms or procedures for entities that do not comply with the legal provisions on internal audit.","PeriodicalId":30958,"journal":{"name":"Audit Financiar","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48489178","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-01DOI: 10.20869/auditf/2019/155/015
I. Robu, I. Herghiligiu, B. Budeanu, Sorin Chiru
Information comparability can be ensured by consistently applying the same financial reporting framework or similar financial reporting frameworks. The comparability of financial information can be measured both between firms and from one period to another. In the study there has been evaluated the comparability of accounting information over time, from one financial exercise to another, and in space, between firms, with panel data analysis using models with fixed-effects. The study was conducted on a sample of 63 BSE Romanian listed companies, during the period 2007-2016, and to obtain the research results, panel data analysis was performed. The main results have revealed that the move to IFRS has led to increased comparability of financial information, based on the estimates of time and cross fixed effects.
{"title":"Assessing Comparability of Accounting Information Using Panel Data Analysis","authors":"I. Robu, I. Herghiligiu, B. Budeanu, Sorin Chiru","doi":"10.20869/auditf/2019/155/015","DOIUrl":"https://doi.org/10.20869/auditf/2019/155/015","url":null,"abstract":"Information comparability can be ensured by consistently applying the same financial reporting framework or similar financial reporting frameworks. The comparability of financial information can be measured both between firms and from one period to another. In the study there has been evaluated the comparability of accounting information over time, from one financial exercise to another, and in space, between firms, with panel data analysis using models with fixed-effects. The study was conducted on a sample of 63 BSE Romanian listed companies, during the period 2007-2016, and to obtain the research results, panel data analysis was performed. The main results have revealed that the move to IFRS has led to increased comparability of financial information, based on the estimates of time and cross fixed effects.","PeriodicalId":30958,"journal":{"name":"Audit Financiar","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45324105","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2019-08-01DOI: 10.20869/auditf/2019/155/018
D. Levanti
The time when the auditors of the public interest entities have been issuing a standardized audit report, without describing the most significant risk identified throughout the audit process, has ended. In the new reporting framework, the audit reports provide more information and transparency to stakeholders, in particular on the significant matters discussed by the auditors with those charged with the entities’ governance. The purpose of the research is to identify and analyze the key audit matters reported by the financial auditors for a sample of public interest entities in Romania. The results highlighted that most auditors complied with ISA’s requirements on the presentation of key audit matters, respectively that auditors have different approaches in terms of the average number of key audit matters reported, nature of the key audit matters and disclosure of the materiality used in the audit process.
{"title":"Aspects Regarding the Changes to the Independent Auditor’s Report. The Case of Public Interest Entities","authors":"D. Levanti","doi":"10.20869/auditf/2019/155/018","DOIUrl":"https://doi.org/10.20869/auditf/2019/155/018","url":null,"abstract":"The time when the auditors of the public interest entities have been issuing a standardized audit report, without describing the most significant risk identified throughout the audit process, has ended. In the new reporting framework, the audit reports provide more information and transparency to stakeholders, in particular on the significant matters discussed by the auditors with those charged with the entities’ governance. The purpose of the research is to identify and analyze the key audit matters reported by the financial auditors for a sample of public interest entities in Romania. The results highlighted that most auditors complied with ISA’s requirements on the presentation of key audit matters, respectively that auditors have different approaches in terms of the average number of key audit matters reported, nature of the key audit matters and disclosure of the materiality used in the audit process.","PeriodicalId":30958,"journal":{"name":"Audit Financiar","volume":null,"pages":null},"PeriodicalIF":0.0,"publicationDate":"2019-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46132807","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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