In this paper, we discuss the deteriorated standing of engineering companies, some of the reasons behind it and the problems facing engineering enterprises during the financial crisis. We show the part that financial analysis plays in the detection of the main factors affecting the standing of a company, classify internal problems and the reasons influencing efficiency thereof. The publication contains the analysis of municipal engineering companies in post-Soviet transitional economies. In the wake of the 2008 world financial crisis the issue became even more poignant. It should be said though that even before the problem had been no less acute for some post-Soviet states caught up in a lengthy transitional period. The paper highlights shortcomings in the management of transportation companies, with new, more appropriate methods suggested. In analyzing the financial stability of a company, three elements need to be considered: current assets, investment policy and structural management of the funding sources leveraging the stability, should be focused on. Inappropriate management of the three may create certain financial problems, with timely and accurate detection thereof being an issue in terms of improved standing of an enterprise. In this connection, the publication contains a diagram reflecting the reasons behind the deteriorated financial standing of a company, as well as a flow chart thereof. The main reasons behind low profitability are also discussed.
The purpose of this article is an examination of the meaning of theoretic aspects of audit in the context of solving of specific problems of the audit. The audit’s aim is the estimation of financial statements by the auditor, i.e. if they are prepared according to the basic requirements of current financial statements. By examination of concrete examples, we can clearly see problems created in an audit and in often cases, those contradictions which can be caused by incompliance of matters regulated by legislation and by reality. An important part of this work is the analysis of reform in the direction of business accounting, statements and audit in Georgia and its comparison with EU countries. In the article, attention is concentrated on the analysis of specific problems of auditing practice and ways of their solving by taking into consideration theoretical aspects of the audit are proposed.
Audit is an independent inspection of the financial statement of the audited person and expresses the opinion of an auditor on the reliability of this statement. The auditor’s activity (auditor’s service) is realized by auditing organizations, individual auditors in connection to conduction of an audit and rendering of audit accompanying services. The profession of auditor means a high level of responsibility for rendered service. Results of decisions made by information users depend on the quality of the auditor’s conclusion. Owners, investors, creditors, and society rely on the opinion of the auditor under the condition that inspection was conducted with good quality. Therefore, the existence of the well-functioning audit quality control system for the administering of the audit is an important issue. An efficient audit quality control system is a substantial challenge that many countries face worldwide, especially those states where these systems are being formed within the respective reform program. The presented article reflects on the best practices of the leading countries, the assumptions and recommendations for the financial accounting, reporting and audit; current reforms in Georgia are made based on this comparative analysis.