Financial Reporting Quality in Greece : A Case Study of Auditor’s Qualifications

complex and volatile environment created by the economic turmoil. We use as a proxy for the examination of financial reporting quality the concept of audit quality as this is depicted in auditor qualifications.Design/ methodology/ approach - The paper used a case study approach in order to examine auditor qualifications among three companies (A,B,C) with differences in their size, operations and structure. Semi structured interviews were conducted with the auditors that performed the audit of annual financial statement and with the chief financial officers of each company.Findings - A common qualification for all entities, irrespective from their characteristics, is the qualification of unaudited tax years. Companies A and C were severely affected by the economic crisis, a negative impact depicted in the adjusted misstatements of these companies that relate to revenue and accounts receivables. Moreover, they face serious liquidity problems which, in the case of company A are due to the fact that it cannot collect its money from the public sector and in company C to its high debt.Company B, which is a foreign multinational company was less affected by the economic crisis and appears to be in a better position regarding its liquidity, as it has an overdraft account with a loan from the parent entity. As far as management's attitude is concerned company B preferred the issuance of a qualified report rather than distribute less earnings to its shareholder, which is the parent company, in contrary to companies A and C which adjusted all audit findings due to the need for finance from the banking sector.Research limitations/ implications - Case study results cannot be projected to the entire population and thus provide a generalization of the results. Future research will include a quantitative survey to verify the findings and provide a wider view of the issue under examination.Practical implications - The findings of the survey could be useful to the regulatory authorities in Greece (i.e. Committee of Accounting Standards and Auditing, Capital Market Commission etc.) in their the improvement of financial reporting in Greece.Originality/ value – The paper may be considered as the first empirical study examining audit qualifications in Greece under the conditions created by the economic recession. In addition, it contributes to the limited literature in the area of financial reporting quality in Greece