Audit as Obligatory form of Surveying of Legal Entities’ Activities When Carrying out Financial Analysis in Course of Procedures of Cross-Border Bankruptcy

Abstract

The relevance of the researched problem is determined by acute necessity of carrying
out financial analysis of legal entities or consolidated group of legal entities in the
framework of the case of cross-border insolvency (bankruptcy) and revealing signs of
fictitious and deliberate bankruptcy. The article is aimed at the necessity of inculcation
single audit standards in order to detect the reasons of the loss of solvency and to
reveal the debtor’s assets, taking into account basing countries, during the procedures
of cross-border bankruptcy. The main approach to carrying out financial analyses is to
determine the level of the indexes’ essentiality of financial accounts and the high level
of risk of non-revealing from the point of the manager, appointed by court on the
insolvency lawsuit, that allows make a conclusion about possible errors and omissions
in financial report on the selective check stage. The necessity of compulsory
engagement of auditors to research financial and economic activity of insolvent legal
entities and the importance of law auditors’ authority consolidation in the case of
cross-border bankruptcy are based in the article. The materials of the article have a
practical value for the state control formation in cases of bankruptcy, where the quality
of audit services is a key element of model of an audit efficiency in insolvent conditions.