eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2021-02-17 19 161 105 118 10.20869/AUDITF/2021/161/105 9659 article The COVID-19 pandemic had a significant impact on all aspects of life, but also on the financial reporting of companies and on the activity of auditors. The paper aims to highlight the importance of reporting in the financial statements the subsequent events caused by the COVID-19 pandemic, but also of the aspects that can significantly influence the going concern of companies` activities, respectively how these effects can cause changes in the quality of audit services. The study was conducted on a sample of 60 companies listed on the Bucharest Stock Exchange, analyzing the components of the annual reports for the financial year 2019, namely the financial statements, the administrator`s report and the independent auditor`s report. The results showed that the effects generated by the COVID-19 pandemic had a significant impact in most of the industries studied, affecting both companies to carry out activities by closing borders, reducing or even closing certain activities, stopping travel and hindering communication with suppliers, customers or investors, reduced sales, deferred payments or the need to optimally manage costs and available resources, as well as at the level of employees by performing work at home, technical unemployment or salary reductions, but also at the level of the client-auditor relationship, by limiting travel in business interest. Most of the estimated effects of the pandemic were presented in the administrator`s report, some of the effects being mentioned in the explanatory notes to the financial statements. From a statistical point of view, the companies` declaration of the effects of the pandemic was correlated with the size of the auditor, the opinion issued by him and the average number of employees. The study showed that certain auditors assessed the risks posed by subsequent events reported by companies, presenting insignificant uncertainties in some cases, but also significant uncertainties regarding the going concern of the activity of some companies. http://revista.cafr.ro/temp/Article_9659.pdf COVID-19; audit; subsequent events; going concern; adjustment eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2021-02-17 19 161 119 129 10.20869/AUDITF/2021/161/119 9660 article The subject of the study is the analysis of the risks associated with threats generated by disruptive technologies in the context of current financial information systems of the entities. The phenomenon of cybercrime, facilitated by the development of Artificial Intelligence, Deep Learning and the disruptive frequency of security incidents represents the foundation of this paper. The aim of the article is to integrate, compare and investigate the impact of disruptive technologies, current security risks and incidents, and to design measures in order to manage risk. The results of this paper highlight Advanced Persistent Threats (APTs), malware, ransomware, sabotage of external actors, third-party threats in the top 5 most common security incidents. The paper acknowledges the complexity of digitization and transposes a practical model of risk management. The paper contributes to informing stakeholders about the forced penetration of hackers into victims` devices, under the pretext of COVID-19. http://revista.cafr.ro/temp/Article_9660.pdf risks associated with the financial system; cyber threats; disruptive technologies; current information systems; Artificial Intelligence impact; Deep Learning impact; COVID-19 eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2021-02-17 19 161 130 144 10.20869/AUDITF/2021/161/130 9661 article The current economic turmoil manifested at international and national level is influencing the banking sector, situation which calls for an innovative approach to the informational value of the independent auditor’s report. In order to reduce the information asymmetry of the audit reports from a stakeholder’s perspective, competent authorities have issued a series of regulations aiming to change the structure and the content of these reports. The most important change relates to the reporting of the key audit matters, which are considered to bring many benefits to stakeholders. In this context, this research aims to identify, analyze and compare the key audit matters reported by the statutory auditors of credit institutions operating in Central and Eastern Europe. The results revealed that the reported key audit matters reflect the particularity of the industry and of the activities carried out by these institutions. Also, the research highlighted a portfolio of convergent and divergent elements in the key audit matters reporting both at the level of the analyzed territories and at audit firm level. The results of the research are useful to stakeholders of the banking industry, professional bodies and regulators from two perspectives: firstly, by generating value added to the informational value of the audit report and secondly, by building an informational symmetry of the audit report in relation to its stakeholders. http://revista.cafr.ro/temp/Article_9661.pdf statutory audit; independent auditor’s report; key audit matters (KAM); credit institutions; Central and Eastern Europe eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2021-02-17 19 161 145 155 10.20869/AUDITF/2021/161/145 9662 article Corporate governance still remains a topic of great interest to both researchers and practitioners, as a result of the on-going challenges that companies face. The current economic and pandemic context and the need for a sustainable development bring new requirements to the governance, imposing a rethinking of strategy and business processes. The new challenges require consolidated implementations of corporate governance. The purpose of this study is to analyze how the companies’ alignment to the governance requirements is reflected in “comply or explain” declarations as well as in the non-financial reports and emphasize some identified vulnerabilities, most of them being determined by the obvious limitation of transparency and the attempt of minimizing the importance of some nonconformities. The objective of the study is to identify the barriers occurred in a solid corporate governance implementation and sustainable development of companies, as these aspects are emphasized in the reports of companies from various industries listed on Bucharest Stock Exchange. The companies’ governance consolidation process, on all its pillars, encompasses the social responsibility coordinate, and remains for the Romanian companies a process that must be accelerated and assumed entirely. The conclusions of this study offer important reflection points and might represent a solid basis for improvement of corporate governance and implicitly of stakeholders` benefits. http://revista.cafr.ro/temp/Article_9662.pdf comply or explain declaration; Bucharest Stock Exchange; non-financial reporting; Romania; corporate governance eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2021-02-17 19 161 156 171 10.20869/AUDITF/2021/161/156 9663 article Over time social and economic events have reflected that the role of supervisory committees and especially of audit committees within entities is essential for ensuring sustainable development, increasing transparency and confidence. The purpose of the paper is to study the role of the audit committee in the financial reporting process of the companies listed on the Bucharest Stock Exchange in the period 2015-2019. The proposed econometric model shows that the management of the entity is oriented towards reducing deficiencies and non-compliances with internal policies and procedures, giving internal control a central role in the decision-making process. http://revista.cafr.ro/temp/Article_9663.pdf audit committee; reporting; risk management; Bucharest Stock Exchange eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2021-02-17 19 161 172 190 10.20869/AUDITF/2021/161/172 9664 article Tax pressure can be calculated at the macroeconomic level, but also at the microeconomic level, by analysing the data provided by companies in their financial statements, or by authorities giving official statistics. In this study, the authors adapt a formula for the calculation of the effective tax rate, proposing, at the denominator, the taxes reported explicitly by companies in their profits and loss account, to which they added the reconstituted value of social and fiscal contributions of the employees. Also, unlike the literature so far, they divided these tax expenses to the sales (revenues) and not to any other indicators from the profit and loss account. The population analysed is represented by the companies listed on the AeRo market of BSE, in the period 2010-2019, a total of almost 3,000 observations. The results allowed them to notice a systematic increase in the share of the tax burden in sales, over the period taken into account. In verifying the effects of some variables proposed by the literature on the tax burden, the authors found that large firms have a lower tax burden, more profitable firms are more taxed than others, the tax burden is lower for more leveraged firms, and increasing the share of fixed assets in the balance sheet leads to an increase in the tax burden. In addition to the literature, they introduced a new variable - audit opinion - and found out that firms that receive modified audit opinions have a higher tax burden. http://revista.cafr.ro/temp/Article_9664.pdf tax burden; sales; Romanian companies listed on AeRo; effective tax rate eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2021-02-17 19 161 191 200 10.20869/AUDITF/2021/161/191 9665 article This paper checks if the auditors in an emergent context, where the fair value (FV) concept, its implementation and audit are relatively new, are aware of the estimation risk induced by the valuation process (the FV provider and FV disclosure), depending on the quality of internal control (IC). An experiment was applied to a group of auditors and master students, using two elements pertaining to FV reporting: “Valuation attributes and sensitivity of data”, respectively “Methods, assumptions and model”. This experiment revealed that: (1) FV audit risk is lower when the estimation is made by an external, instead of an internal valuator; (2) the master’s students, compared to more experienced professional auditors, manifest an overconfidence in the external Valuation Report in terms of valuation attributes, data availability and solutions adopted to test the sensitivity of value; (3) the audit risk is lower when the valuator is external and hence the auditors verify in detail the information provided in the Valuation Report as inputs and methods applied; (4) when IC is strong as quality, the verification of methods, assumptions and model induces for auditors a higher risk than the other FV disclosed component, valuation attributes and sensitivity of data, in the case of management estimation. http://revista.cafr.ro/temp/Article_9665.pdf fair value measurement (valuation); audit risk; valuation methodology; valuation attributes