FINANCIAL AUDIT AS PREDICTION TOOL FOR RISK REDUCTION IN PUBLIC FINANCE

State budget is the fundamental document of state economy. State budget balance reflects state economy. Deficit reported in a state budget in the long-term threatens long-term effective functioning of a state. This article aims at pointing out risks arising in the public finance of Slovakia and at providing framework proposals of solutions by means of financial audit. Financial audit represents a supervisory tool of a state, as municipalities and self-governing regions are obliged to have financial statements as well as their budgets audited by a financial auditor. In line with the International Standards on Auditing, auditor is an independent person who verifies financial statements and budgets of organisations.