Auditing the Aggregated Balance Sheet of the Republic of Slovenia: Challenges from Auditor and Auditee Perspective

Abstract

In Slovenia, the Court of Audit conducts annual audits of the state’s aggregated balance sheet in accordance with the Public Finance Act and the Court of Audit Act. Since the first separate audit in 2014, the auditor has issued a disclaimer of opinion on the aggregated balance sheet every year due to lack of sufficient and appropriate audit evidence. Based on the analysis of the audit reports we first identify the problematic balance sheet items that result in disclaimer of opinion. Next, we outline the challenges from both auditor and auditee perspectives. The challenges faced by the state as the auditee include the non-implementation of action plans and inadequate control of the state property. The challenges faced by the auditor include the problems related to the valuation of assets in the part not covered by current accounting framework, insufficient call for accountability of the government and state administration and non-transparent progress reporting.