Analisys Of Financial Position In Determining The General Inherent Risk

The auditing of financial statements is a complex process which besides knowledge of accounting nature, also uses other disciplines from the economic area, having the purpose of obtaining necessary samples for justifying the opinion which is to be given by the auditor. In this way it is justified that the financial statements do not contain major distortions caused by fraud or error, and thus, the users of finance accounting are provided with a higher level of trust. The economical – financial analysis represents one of these disciplines through which the auditor may obtain information concerning the audited entity’s financial position. For expressing opinion concerning financial situations, the statutable auditor identifies and evaluates the risks which may point out the fact that, these may contain significant distortions, which are likely to influence the decisions taken by the users of the information. One of these risks, evaluated and determined by financial auditor, is the inherent general risk. The auditor uses worksheets for identifying the level of this risk which support him in establishing some risk factors’ degree of influence upon the information given in the financial situations, factors which are not always of economical nature. These risk factors refer to aspects concerning managerial environment, accounting environment, operational environment of the audited entity. Among risk factors concerning managerial environment, financial position and the dissolution of audited entity are worth mentioning. In order to determine the level of risk for these factors, the auditor utilizes elements of economic – financial analyses such as structural analysis of balance sheet liability, analysis of financial equilibrium, analysis of financial risk, analysis of bankruptcy risk – Altman Model, solvency analysis and liquidity analysis. After accomplishing these analyses, the auditor establishes the level of general inherent risk for the financial position and dissolution of the audited entity, using a professional reasoning. Thus, the paper follows the presentation of these aspects from a theoretical point of view and then making am analysis of financial position and dissolution of the audited entity and presenting the degree of general inherent risk made by the statutable auditor.