No abstract

Given the present-day economic situation, which is characterized by economic destabilization as a result of the pandemic crisis, auditors are facing the issue of establishing materiality, which is partly based on the fact that a certain level of financial misstatement influences the decisions of the involved parties. The aim of the present study is to suggest an econometric model for readjusting significance threshold levels through quick audit tests used on sustainable companies. The main objectives of the study are to emphasize the causal relationship between the manifestation of constant errors in financial reports and the inconsistency of audit opinions, as well as to put into practice the causal relationship that exists between the improvement of the audit function and sustainability itself, given companies’ crisis situation. In this particular context—based on the entire sample of companies listed in the Bucharest Stock Exchange (BVB), Bucharest Exchange Trading Plus category (BET Plus)—we estimated a number of financial indicators between 2009 and 2018 so that we could determine the materiality of accounting errors identified by auditors in order to express an opinion regarding the reliability and accuracy of financial reporting. The study’s key findings show that, given the economic crisis, the significance threshold level is a volatile test and it needs to be reconsidered taking into account the decline in the quality of reporting and, indirectly, the disclosure of financial information. From a holistic point of view, we believe that our study will have a significant impact on both practitioners and regulatory entities by shifting the qualitative approaches of analysis itself towards key prudential regulations stipulated by International Standard on Auditing (ISA) 320, ISA 450 and ISA 700. The study also highlights the process of refining information sources that can impact the significance, understanding and materiality of business decisions.

No abstract

Integrated reporting is currently the newest form of corporate reporting that is in the process of being developed and adopted by companies around the world. Integrated reporting is the answer to the many requirements related to reporting non-financial information and their connectivity with financial information and different approaches to performance. The main objective of this research is the analysis of the performance of the companies that have adopted the integrated reporting, according to the specific business sector, through the profitability indicators. To achieve this goal, we created a sample of companies operating in Europe, North and South America, over 2015-2017. The result of the research reflects that the adoption of integrated reporting does not represent a significant influence factor on the profitability of the analyzed business sectors which will certainly lead to the increase of the performance over time. Integrated reporting is a management tool that must be used appropriately to gain maximum benefits both in the performance of a company and in corporate reporting.