Abstract
Subject. Reliability and quality of financial statements guarantee the confidence of State structures, creditors, potential investors and other stakeholders of a company. Objectives. Our purpose is to discuss theoretical and methodological aspects of reliability of financial statements, build an indicator to reveal misstatements of financial results disclosed in accounting reports, define industry specifics in determining the indicators that characterize distortions in financial performance of companies. Methods. We offer a technique to estimate the probability of distortions in financial statements of companies involved in mining operations. Results. We built an integrated index to estimate the likelihood of misstated financial result in financial statements, i.e. its overstatement, for resource development companies. The paper proves that indicators characterizing distortions in financial statements of resource development companies do not coincide with indicators of construction companies. Conclusions. The test of the proposed approach enabled not only to unveil misstatements in the financial results of companies of two economic sectors, but also to define the amount of overstatements. Furthermore, the paper proves the presence of industry specifics in choosing the indicators that characterize the misstatements of companies.
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