Abstract:

In the context of the current economic crisis, the fundamental role of the auditor is to guarantee the accuracy of the financial statements reported by the companies quoted on financial markets. According to international standards on auditing, within their mission, the auditors must also evaluate the company’s ability to continue its activity within a determined time horizon, without becoming insolvent, thus ensuring that the quality criteria concerning financial reporting are preserved. On its objective, independent, and professional opinion depend the strategic decisions of all the stakeholders, and the auditor carries all the responsibility for planning the mission, collecting the evidence, and performing the necessary procedures for issuing the final report. Within the mission, the auditors must support their audit opinion on sufficient and appropriate audit evidence, and the analytical procedures ensure a series of comparative information at the level of analyzed periods or branch. This study aims to support a model based on quantitative analysis techniques to evaluate the ability of the audited company to continue its activity, without being subject to the risk of insolvency, based on duration models using survival analysis. Obtaining the mortality tables, as well as estimating the probability and time of survival after the risk of insolvency are useful to the auditor in the evaluation of the audited company’s compliance with drawing the annual financial statements based on the going concern assumption. The study was performed on a sample of 77 companies quoted in the Bucharest Stock Exchange, subject to the risk of insolvency in the period 2008-2011. The data were treated and the results were obtained using the SPSS 19.0 and SAS EG 4.2 statistical software.