Analysis of Auditor’s Reports and Bankruptcy Risk in Banking Sector in the Republic of Serbia

Amfiteatru Economics, 15 (34), pp. 431-441, 2013

11 Pages Posted: 10 Jul 2013

See all articles by Milovan Stanisic

Milovan Stanisic

Singidunum University

Danka Stefanovic

Singidunum University

Nada Arezina

Singidunum University

Vule Mizdrakovic

Singidunum University

Date Written: June 9, 2013

Abstract

This paper aims to point out the significance of external audit and auditor’s reports. The stability of banks and its operations are vital not only for efficient financial system functioning, but also for overall industry. The banking sector, both in developed and undeveloped countries, experienced financial crisis in the last few years. Considering these circumstances and the fact that demands of financial statements users grow in complexity, their control is essential. We provide the empirical evidence on the banking sector auditor’s reports in the Republic of Serbia, with particular reference to auditor’s opinions and audit agencies that had conducted banks audits. The review of the audit legislation and professional standards will be presented, as well as the notion of bankruptcy risk and its relevance for baking sector. Our research results indicate that special attention should be paid to banks which auditor’s report had some explanatory paragraphs or even qualification. In conclusion we highlight the red flags that may damage banks operations and emphasize the importance of keeping the high level of auditor’s independence with the intention to provide confidence to stakeholders who form their decisions based on their reports.

Keywords: audit, banks, financial statements, insolvency, risk

JEL Classification: M42

Suggested Citation

Stanisic, Milovan and Stefanovic, Danka and Arezina, Nada and Mizdrakovic, Vule, Analysis of Auditor’s Reports and Bankruptcy Risk in Banking Sector in the Republic of Serbia (June 9, 2013). Amfiteatru Economics, 15 (34), pp. 431-441, 2013, Available at SSRN: https://ssrn.com/abstract=2291496

Milovan Stanisic

Singidunum University ( email )

Danijelova 32
Belgrade, 11000
Republic of Serbia

Danka Stefanovic

Singidunum University ( email )

Danijelova 32
Belgrade, 11000
Republic of Serbia

Nada Arezina

Singidunum University ( email )

Danijelova 32
Belgrade, 11000
Republic of Serbia

Vule Mizdrakovic (Contact Author)

Singidunum University ( email )

Danijelova 32
Belgrade, 11000
Republic of Serbia

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