The Analysis of Auditor's Reports of Insurance Companies in the Republic of Serbia
The Analysis of Auditor's Reports of Insurance Companies in the Republic of Serbia

Summary/Abstract: Successful and long-term compliance of insurance company’s operations with assumed risks is of fundamental importance for the economic system. Starting from the social significance of insurance institution and the need for stability in this activity, the systematization and analysis of the independent auditors’ reports of insurance companies’ financial statements between 2009 and 2016 was conducted. The structure and frequency of qualifications in auditors' reports, which are the result of noncompliance with financial reporting standards, were analyzed. All insurance companies are stratified to companies that were always issued auditor’s unmodified opinion in the observed period and companies that were at least once issued some form of qualification in the observed period, including the reasons for issuing unmodified opinion with on emphasis of matter. The results of the analysis showed that companies with unmodified opinion were mostly profitable, of foreign capital origin, and engaged auditors of the “Big Four”. Companies that were at least once issued some form of qualification in auditor’s opinion are predominant in the insurance sector, mostly operated at a loss and were of domestic sources of financing. Companies that were continuously issued modified opinion disappeared from the insurance market, entered into a voluntary liquidation procedure, or their operating license was revoked. Moreover, the frequency of certain audit firms in the verification of companies’ financial statements was analyzed. The results show that PWC audit firm had the largest participation in the audit of insurance companies, Deloitte of companies which were issued modified in opinion, while KPMG auditing firm reported the highest number of unmodified opinions in the insurance sector.

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