Study on the Role of Financial Auditing to Ensure the Conservatism in Financial Reporting
Author:
Associate Prof. Constantin TOMA, Ph. D.; Ioan-Bogdan ROBU, Ph. D.
JEL:
C13, C20, C58, M41, M42
DOI:
Keywords:
financial auditor, financial reporting, fair view, conservatism
Abstract:
For meeting the requirement of accounting information to fairly representation of the financial position and performance of listed companies, the financial statements must be prepared on the basis of compliance with the principles imposed by a financial reporting framework. Among these principles, the conservatism protects the company from potential risks and the occurrence of adverse events, requiring a pessimistic view on financial reporting. The purpose of this study is to assess the measure to which Romanian companies listed on BSE apply conservatism in financial reporting and to estimate influence of financial auditing on the manner of application of this principle. The study was conducted on a sample of 63 Romanian companies listed in BSE, in the financial exercise 2012. To obtain the research results advanced statistical methods were used to analyze the collected data, by using SPSS 20.0.\r\n