Financial statements and audit in the insurance company

Abstract

In accordance with the Law on Insurance and the Law on Accounting and Audit, insurance companies in Serbia are required to prepare financial statements. These materials are submitted to the Agency of Business Registers and the National Bank of Serbia from 31st December of the reporting year according to the Law on Accounting and Audit. Insurance companies which undergo a change in a legal position, such as mergers, divisions, i.e. sales, have to submit financial statements with a cut-off on the day determined by the decision on the change of a legal position or on the day determined by the sales contract. Furthermore, financial reports are submitted in the cases of the insolvency proceedings or liquidation of an insurance company. The notion of audit in an insurance company has its importance from the Insurance Law itself, in which the entire Chapter 9 is dedicated to the audit of financial statements. It deals with the performance of the audit, prior consent to the selection of the audit company, liabilities of the audit company, and the check of the audit report and the notification of the body responsible for supervising the audit.1 The significance and role of audit in an insurance company is far broader, which will be explored later in this paper.