Verification of management staff’s statements in the extraordinary event audit
DOI:
https://doi.org/10.35774/visnyk2022.02.086Keywords:
extraordinary events, financial statements, audit, statements of management, audit procedures, audit evidenceAbstract
Introduction. Financial and economic activities of enterprises depend on a number of internal and external factors. Their influence is mostly regular. At the same time, there are circumstances, the content of which is unpredictable, and their impact on the activities of economic entities and on the information of financial statements is significant. These circumstances lead to extraordinary events, the content, nature and impact of which must be taken into account in decision-making by stakeholders. This necessitates an independent assessment of extraordinary circumstances and their consequences during the audit.
The purpose of the study is to develop proposals for the procedural support of the methodology for the relevant indicators of financial statements auditing.
Methods. The theoretical basis of the study is the research of scientists and practitioners on the identification, accounting and audit of extraordinary events. The methodological basis is determined by general scientific methods (abstraction, grouping, systematization, analysis, synthesis), used to improve the methodological approaches to the audit of extraordinary events.
Results. The methodology for auditing extraordinary circumstances is based on the identification and evaluation of statements used by the management of the entity to reflect them in the financial statements. At the same time, these statements should relate to the content of events, their impact on the activities of the enterprise and the changes that occur in assets and sources of their formation. These statements can be investigated on the basis of audit evidence through procedures such as inspection, monitoring, external confirmation, recalculation, re-execution, analytical procedures and request.
Discussion. The subject of further research may be methodological approaches to optimize the choice of audit procedures based on the ratio of feasibility and the amount of associated costs.
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