PERFORMANCE ANALYSIS AND AUDIT OF BANKS’ FINANCIAL STATEMENTS IN THE REPUBLIC OF SERBIA

Banks are financial institutions of great importance for maintaining the stability of a national economy. The stable and profitable operations of banks will prevent market disturbances and means that banks are ready to support all other participants through the provision of credit and deposit services. Fraudulent financial reporting and irregularities in financial statements that have occurred in history have shown the special role and importance of audit firms. Presenting the auditor’s opinion in an audit report ensures greater certainty for decision makers who are interested in those audited financial statements. Auditors cannot provide a complete guarantee, but provide a high degree of assurance that the examined financial statements provide a proper insight into the condition and success of the banks. The subject of research in the paper will be the realized performance of banks operating in the Republic of Serbia, specifically focusing on profitability, liquidity and management quality of the observed banks. Additionally, the subject of the research will be the audit reports of the banks, that is, the opinions of the auditors for the financial reports of the observed banks will be identified. The aim of the research is to determine the interdependence of the observed financial indicators of bank operations. An additional goal of the research is the analysis of audit opinions presented for the financial statements of banks in the Republic of Serbia and the determination of the connection between the financial indicators and the audit opinions. The most desirable audit opinion is a positive opinion and means that banks truthfully and objectively present their state and business success in financial reports.