IDEAS home Printed from https://ideas.repec.org/a/ddj/fseeai/y2019i1p5-11.html
   My bibliography  Save this article

The Importance of External Audit in Detecting Abnormalities and Fraud in the Financial Statements of Public Enterprises in Kosovo

Author

Listed:
  • Hysen ISMAJLI

    (University of Prishtina, Kosovo)

  • Edona PERJUCI

    (University of Prishtina, Kosovo)

  • Medina BRAHA

    (University of Prishtina, Kosovo)

  • Vlora PRENAJ

    (University of Prishtina, Kosovo)

Abstract

In our paper, we have focused on determinant factors and their impact on the audit of public enterprises in Kosovo. In addition, we have analyzed the impact of audit quality on improving transparency and accountability of public enterprises. The study also assesses factors that affect effectiveness and ineffectiveness of information in the audit reports of the Kosovo National Audit Office. The data were obtained based on observations, documentation, questionnaires and interviews. Respondents were internal auditors of public enterprises in Kosovo as well as external auditors of the Office of the Auditor General in Kosovo. This research was designed using primary and secondary sources of data and was carried out according to statistical analysis methods using the average algebraic size method and absolute variation indicators. The findings of this paper suggest that external auditors consider the potential risk of errors and fraud as being high, that they have aversive attitudes against errors and fraud, and that for them there exists a negative relationship between errors and fraud and financial reporting. Also, the quality of the external audit positively affects the detection of fraud and anomalies within financial statements.

Suggested Citation

  • Hysen ISMAJLI & Edona PERJUCI & Medina BRAHA & Vlora PRENAJ, 2019. "The Importance of External Audit in Detecting Abnormalities and Fraud in the Financial Statements of Public Enterprises in Kosovo," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 5-11.
    • Handle: RePEc:ddj:fseeai:y:2019:i:1:p:5-11
    DOI: https://doi.org/10.35219/eai158404091
    as

    Download full text from publisher

    File URL: http://www.eia.feaa.ugal.ro/images/eia/2019_1/Ismajli_Perjuci_Braha_Prenaj.pdf
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.35219/eai158404091?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Baber, William R., 1983. "Toward understanding the role of auditing in the public sector," Journal of Accounting and Economics, Elsevier, vol. 5(1), pages 213-227, April.
    2. Cheryl W. Gray & James H. Anderson, 2006. "Anticorruption in Transition 3 : Who is Succeeding... and Why?," World Bank Publications - Books, The World Bank Group, number 7089.
    3. Prem Sikka & Steven Filling & Pik Liew, 2009. "The audit crunch: reforming auditing," Managerial Auditing Journal, Emerald Group Publishing, vol. 24(2), pages 135-155, January.
    4. Keith Houghton & Christine Jubb, 2003. "Market Competition and Auditor Independence," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 10(3), pages 213-228.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ismajli Hysen & Perjuci Edona & Prenaj Vlora & Braha Medina, 2019. "The Importance of External Audit in Detecting Abnormalities and Fraud in the Financial Statements of Public Enterprises in Kosovo," Ekonomika (Economics), Sciendo, vol. 98(1), pages 124-134, June.
    2. Jeffrey B. Nugent & Grigor. Sukiassyan, 2009. "Alternative Strategies For Firms In Oppressive And Corrupt States: Informality Or Formality Via Business Associations?," Contemporary Economic Policy, Western Economic Association International, vol. 27(4), pages 423-439, October.
    3. Melissa Aldredge & Sarah DuBois, 2023. "Back to the Basics: Financial Statement Disclosures & Reporting Requirements," International Journal of Business and Management, Canadian Center of Science and Education, vol. 17(8), pages 1-1, February.
    4. Loganathan Krishnan Author_Email: loganathan@utar.edu.my, 2011. "Legal Issues On The Scandals Involving Auditors," 2nd International Conference on Business and Economic Research (2nd ICBER 2011) Proceeding 2011-255, Conference Master Resources.
    5. Melinda Timea FULOP & Nicolae MAGDAS & George Silviu CORDOS, 2019. "Theoretical Background Of Internal And External Environment Of Negotiation," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(21), pages 1-3.
    6. Michael, Bryane & Popov, Maja, 2012. "Do Customs Trade Facilitation Programmes Help Reduce Customs-Related Corruption?," EconStor Preprints 109021, ZBW - Leibniz Information Centre for Economics.
    7. Knobel, Alexander & Chokaev, Bekhan, 2014. "Possible Economic Outcomes of a Trade Agreement with the European Union," EconStor Preprints 121853, ZBW - Leibniz Information Centre for Economics.
    8. J. Christiaens & V. Van Peteghem, 2004. "Governmental Accounting Reform: Evolution Of The Implementation In Flemish Municipalities," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 04/256, Ghent University, Faculty of Economics and Business Administration.
    9. Jeff Everett & Constance Friesen & Dean Neu & Abu Shiraz Rahaman, 2018. "We Have Never Been Secular: Religious Identities, Duties, and Ethics in Audit Practice," Journal of Business Ethics, Springer, vol. 153(4), pages 1121-1142, December.
    10. Johnathon Cziffra & Steve Fortin & Zvi Singer, 2023. "Differences in government accounting conservatism across jurisdictions, their determinants, and consequences: the case of Canada and the United States," Review of Accounting Studies, Springer, vol. 28(2), pages 1035-1073, June.
    11. Andreas Fiebelkorn, 2019. "State Capture Analysis," World Bank Publications - Reports 33094, The World Bank Group.
    12. Florina Popa, 2008. "Responsibility, Determinant For The Efficiency Of Governance," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(10), pages 1-17.
    13. Gauthier, Bernard & Goyette, Jonathan & Kouamé, Wilfried A.K., 2021. "Why do firms pay bribes? Evidence on the demand and supply sides of corruption in developing countries," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 463-479.
    14. Vivien Beattie & Alan Goodacre & Ken Pratt & Joanna Stevenson, 2001. "The determinants of audit fees—evidence from the voluntary sector," Accounting and Business Research, Taylor & Francis Journals, vol. 31(4), pages 243-274.
    15. Baber, William R. & Gore, Angela K. & Rich, Kevin T. & Zhang, Jean X., 2013. "Accounting restatements, governance and municipal debt financing," Journal of Accounting and Economics, Elsevier, vol. 56(2), pages 212-227.
    16. Cristina Bota-Avram, 2011. "Some Arguments That Justify The Audit Trinity’S Approach In The Context Of Corporate Governance," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 6(1), pages 5-18, April.
    17. Giorgio d’Agostino & Luca Pieroni, 2019. "Modelling Corruption Perceptions: Evidence from Eastern Europe and Central Asian Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 142(1), pages 311-341, February.
    18. Mohammed Lazreg & Kamel Si Mohammed, 2019. "Corruption and Democracy in Middle East and North Africa Countries: Dynamic Generalized Method of Moments," International Journal of Economics and Financial Issues, Econjournals, vol. 9(1), pages 60-65.
    19. Robert W. Ingram, 1986. "Tests of the fund accounting model for local governments," Contemporary Accounting Research, John Wiley & Sons, vol. 3(1), pages 200-221, September.
    20. Pless, Jacquelyn & Fell, Harrison, 2017. "Bribes, bureaucracies, and blackouts: Towards understanding how corruption at the firm level impacts electricity reliability," Resource and Energy Economics, Elsevier, vol. 47(C), pages 36-55.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ddj:fseeai:y:2019:i:1:p:5-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gianina Mihai (email available below). General contact details of provider: https://edirc.repec.org/data/fegalro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.