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Econviews : Review of Contemporary Entrepreneurship, Business, and Economic Issues, Vol. 34 No. 2, 2021.

Review article

https://doi.org/10.51680/ev.34.2.16

Assessment of transparency of audit reports based on presentation of key audit matters – the cases of Bosnia and Herzegovina and Croatia

Mirjana Hladika orcid id orcid.org/0000-0003-3170-9138 ; University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia
Jelena Poljašević ; University of Banja Luka, Faculty of Economics, Banja Luka, Bosnia and Herzegovina
Josipa Grbavac ; University of Mostar, Faculty of Economics, Mostar, Bosnia and Herzegovina

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Abstract

Purpose: One of the ways to enhance transparency and usefulness of audit reports is to include information on key audit matters (KAMs). In this paper, based on the presented KAMs, we investigate transparency of audit reports of listed companies in Bosnia and Herzegovina and in Croatia.

Methodology: For the purposes of this research, we collected and systematised data from published audit reports and then analysed them by means of descriptive statistical methods.

Results: The research results show that in Croatia only a few audit reports lack a section on KAMs and there is no difference between the audit reports issued by the Big Four and the reports of other audit firms. In Bosnia and Herzegovina, most audit reports do not include a section on KAMs, but, unlike the Big Four, who disclose at least one KAM, other audit firms generally do not present any. Additionally, the research results show differences in the number of communicated KAMs between the audit reports prepared by the Big Four in Croatia and their reports for Bosnia and Herzegovina. There are also differences in the type of KAMs used in the two observed countries.

Conclusion: Having analysed the situation in the two developing countries, we obtained different results. The discrepancies mainly stem from the varying degrees of transparency of the audit profession in each country.

Keywords

key audit matters; responsibility of the auditor; audit/auditor's report; transparency of audit reports; reliability of financial statements

Hrčak ID:

270671

URI

https://hrcak.srce.hr/270671

Publication date:

10.12.2021.

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