EIRP Proceedings, Vol 15, No 1 (2020)

Financial Risk Analysis Model in the Context of the Romanian Accounting System

Delia Mihaela Ibănişteanu (Ionasz)

Abstract


Accounting plays an important role in the risk management process. Based on the information provided by it, potential risks can be identified and the company’s exposure to specific risks can be measured. The information provided by the accounting is influenced by the accounting model adopted and the way in which it is presented varies. The Professional Management Accountants’ Corps (CIMA) in London underlines the significant implications of accountants in the risk management process and internal control system of their organisations, professional knowledge adding value to processes (Collier, P. , Berry, A. , Burke, G. , Research Executive Summaries Series, Vol. 2, nr. 11, p. 5). The objective of this study is to create a credit risk assessment model using a number of useful financial rates in the company’s creditworthiness prediction. This will be achieved through a quantitative model designed using real data from companies in operation or bankruptcy and statistical methods specific to the modelling oAf this type of risk. The aim of the research is to provide relevant scientific conclusions leading to an understanding of the relationship between the Romanian accounting model and the assessment of financial risk, how they influence each other, and the importance of knowledge link. 

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