The Role of Financial Auditing in Increasing the Quality of Financial Information

Author:Associate Professor Constantin TOMA, Ph. D.

JEL:M41, M42

DOI:

Keywords:financial audit, qualitative characteristics, financial statements, true and fair view, crisis

Abstract:
Annual fianancial statements are the main means to communicate to users financial-accounting information, as well as other types of information. The quality of the information in these documents has a decisive impact on the investors’ behaviour and decisions, especially in times of crisis, as well as on other categories of beneficiaries. This is why, financial auditors have a major social responsibility, and they become true guarantors of the veridicity and credibility of financial reports communicated by entities. They have to make sure that information presented by individual entities or groups of societies satisfy the quality criteria established via accounting regulations and that the latter mirror reality, i.e. they provide a faithful image of assets, liabilities, financial state, profit or loss. The role of these professionals in times of generalised economic and financial crisis becomes hightened, given that there are enough voices who have been associating them with the failures that large companies or business groups have experienced lately.\r\nBased on a comparative and critical analysis of contemporary realities, this article aims to bring to the attention of specialists in the field and, potentially, to suggest as a topic of debate, the relation between financial auditing and the qualitative characteristic features of financial and accounting information, as a premise to increase the credibility and usefulness of financial reports in grounding entities’ decisions.\r\n

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