Modern realities of independent audit of banks' financial statements

Abstract

The consequences of Russia's military invasion of Ukraine have affected all spheres of life and have had a significant impact on the work of banking institutions. The situation is developing rapidly and sometimes unpredictably - the bank's management needs to constantly assess the impact of the situation on the bank's activities in order to further prepare reliable financial statements and make correct and timely management decisions. Under these conditions, this responsibility applies to both the preparers of the financial statements and the independent audit, which helps to ensure a higher level of transparency and reliability of the bank's financial statements. The purpose of the independent audit of financial statements is to provide correct and reliable information about the state of the bank's institution, on the basis of which important decisions will be made in the future, and the audit results allow: to determine the current financial condition of the bank, to identify changes in the condition and the factors that led to them; to predict the main trends of future development; to identify shortcomings in the work of the accounting and financial services; to understand how effectively the bank's resources are used; to optimize the bank's financial activities, etc. It should be noted that the study of the independent audit of financial statements over time requires more information about its role performed by the independent auditor, so this issue provokes more and more scientific research. The purpose of the article is to substantiate the role of the independent audit of financial statements of banking institutions. The article analyzes and systematizes the legislative requirements and recommendations of the National Bank of Ukraine regarding the audit of financial statements of Ukrainian banks, the criteria set by the bank when choosing an audit firm to audit financial statements. The author describes the responsibilities of independent auditors and bank employees when auditing financial statements. Typical misrepresentations of the financial statements submitted for audit are presented. The author analyzes the independent auditors' opinions on the financial statements of JSC Tascombank, RVS Bank and Deutsche Bank DBU. It is substantiated that an independent audit of financial statements is a key aspect of a bank's audit, and a rational and effective solution to the problematic issues raised during the audit will significantly expand the scope of the audit towards making economically sound management decisions of the bank.