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The Information Content Of Audit Opinion For Users Of Financial Statements

Author

Listed:
  • Andreea Claudia Crucean

    (East European Center for Research in Economics and Business, West University of Timisoara, Romania.)

Abstract

In a market economy with frequent changes, audit is an area that can provide some stability at the economic and social lever, even if the economic and financial crises have questioned the audit work and led to a decrease in the trust of the intended users in the auditors work, leading to a distortion of the primary purpose of the financial audit. The article presents the relevant aspects of the evolution of audit reporting, especially on the underlying issues that expressing qualified opinions or disclaimer of opinion. The content of paper includes a review literature, national and international, and a case study that identified and analyzed the qualified opinions expressed in the auditor’s independent reports, after analysis the financial statements of companies listed on the Bucharest Stock Exchange for the period 2015, 2016 and 2017. The entities were grouped on 9 sectors of activity and researched for each industry if the auditors expressed an unqualified opinion or a modified opinion and if the auditor is part of a Big4 company or belongs to another auditor category. The reasons behind the modified opinions were analyzed and grouped according to the frequency of their appearance in the audit reports. The most important conclusion of the case study was that in all cases, the reasons that led to express modified opinions, was detailed in the auditor’s report, this being considered as a reference guide for the future auditor’s missions, as well as, a recommendation for improving the highlighted aspects.

Suggested Citation

  • Andreea Claudia Crucean, 2019. "The Information Content Of Audit Opinion For Users Of Financial Statements," Oradea Journal of Business and Economics, University of Oradea, Faculty of Economics, vol. 4(2), pages 91-101, September.
    • Handle: RePEc:ora:jrojbe:v:4:y:2019:i:2:p:91-101
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    References listed on IDEAS

    as
    1. Ioan-Bogdan ROBU & Maria GROSU & Costel ISTRATE, 2016. "The Effect of the Auditors’ Rotation on the Accounting Quality in the Case of Romanian Listed Companies under the Transition to IFRS," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 14(133), pages 1-65, January.
    2. Melinda Timea FULOP, 2018. "New tendencies in audit reporting, examples of good practices BVB," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 16(150), pages 249-249.
    3. Camelia-Daniela HATEGAN & Andreea-Claudia CRUCEAN, 2018. "Reporting of subsequent events in financial statements – between obligation and necessity," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 16(152), pages 571-571.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    auditor’s report; modified opinion; disclaimer of opinion; financial statements; financial reporting; Big4.;
    All these keywords.

    JEL classification:

    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

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