Identification of key performance indicators of auditor s report: evidence from Borsa Istanbul

Abstract

According to International Standards on Auditing (IAS) 700 –Forming an Opinion and Reporting on Financial Statements–the objectives of the auditor are to form an opinion on the financial statements based on an evaluation of the conclusions drawn from the audit evidence obtained and to express clearly that opinion through a written report. In the final step of audit process the auditor shall form an opinion on whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework. The auditor shall modify the opinion in the auditor’s report when: the audit or concludes that, based on the audit evidence obtained, the financial statements as a whole are not free from material misstatement. This study empirically examines distinctive financial indicators of qualified auditor’s reports in Turkey to see whether there is a relationship between financial indicators and qualifications of an auditor’s report. The aim of the paper is to analyze the qualified auditor’s reports of Borsa Istanbul nonfinancial companies for the year 2016 and to show the circumstances in the company’s financial position and performance that causes the qualifications by using key performance indicators (accounting ratios).