The Possibility of Predictions in Auditor’s Opinion: The Case of the Serbian Tobacco Industry
The Possibility of Predictions in Auditor’s Opinion: The Case of the Serbian Tobacco Industry

Summary/Abstract: Research Questions: This paper investigated whether there is a possibility for predictions of an auditor’s opinionthat can be used to predict, in an extremely accurate way, future developments in one company. Motivation: The researchof Dopuch, Holhausen and Leftwich (1987); Kirkos, Spathis and Manolopoulos (2007) or Kirskos (2012) and Kim andUpneja (2014) open space for new challenges for using auditing methods.The most trying task is to find a technique thatwill be able to timely, accurately and with the least waste of resources respond to the challenge. The fact that auditors areforced to expand the scope and purpose of the audit work, respecting new risks that are continually changing representsthe primary inspiration for this paper. Idea: Our goal was to explore whether one of the possible techniques for predictionthe auditor’s opinion – multivariate discriminant analysis – can precisely predict a correct future audit opinion and whetherthis analysis is useful for finding solutions to performing predictions. Data: The analysis was conducted using data fromfinancial statements of 4 Serbian tobacco companies of years 2011, 2012, 2013, 2014 and 2015 published by the SerbianBusiness Registers Agency. Tools: The presented research, based on theoretical and mathematical support, uses statisticalsoftware tools Statistica. Findings: The application of discriminant analysis in Serbian tobacco companies showedstatistically major variables of the balance sheet, manely “Intangible assets”, “Supplies” and “Liabilities”. Following thesevariables, we obtained results which we used as the predictors. The outcome of our preliminary investigation presentedaccurate and correct prediction which is also confirmed by historical data. The result of this investigation can be used forfurther more complex investigations when using some variables that will lead to discriminatory analysis for moreclassification groups to mark and rank the most significant variables for expressing the audit opinion. Contribution:Provided information is important for every business, because every entity that is listed on the business market aims to beas better as possible, and find out and exploit the possibility of avoiding a negative result.

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