engleski

Financial statements quality in the conditions of global economic crisis - a case of Croatian capital markets

A growing number of stakeholders emphasize the importance of information base quality that primarily consists of financial statements. The quality of financial statements in this context is an imperative for investors and other stakeholders, whose competencies take concrete form only after they analyze data from financial statements and choose an alternative that seem to be appropriate. In this sense it is important to note that the quality of financial statements is affected by a number of factors that can be grouped into several major groups such as the legal system, the dominant types of sources of financing the businesses, the tax system, the national culture and other factors that are the result of historical events and circumstances. The financial statements auditing is assumed to be the basic premise of their quality so it is used as a starting point of research which results will be presented in the article. Namely, the auditors in their efforts to estimate the reality and objectivity of financial statements, determine their information credibility in the same time, and thereby indicate the level of financial statements quality to stakeholders. Type of auditor's opinion will therefore, be an indicator of the quality of financial statements. Between two extreme possibilities – unqualified opinion, which assumes the highest level of financial statements quality, and adverse opinion, as the lowest quality level, there are three types of options – unqualified opinion with an explanatory paragraph, qualified opinion and disclaimer of opinion. Along with the establishing the degree of financial statements quality for business entities whose securities are listed on the Zagreb Stock Exchange for the period 2009 – 2010, the reasons for deviations from unqualified opinion will be analyzed, which will result in determining the most important areas that affect the quality of financial statements and the problems identified by auditors to clients in period of economic crisis.

Financial statements quality, auditing, global economic crisis, Croatian capital market

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