SPECIFIC ISSUES OF THE ACCOUNTING AND THE FINANCIAL AUDIT IN THE PENSION FUNDS
Authors: Iankova Natchkova Maia 
Published: December 2021

The pension funds attract funds from the social securers and the secured persons of the additional obligatory and voluntary pension insurance of individuals. The raised funds of the additional obligatory and voluntary pension insurance contributions are managed, invested and paid in form of additional pensions of the pension funds to the secured persons in case of occurrence of the insured events provided in the legislation, in the regulation of the pension fund and in the pension fund contracts. The social importance and development of the activity of pension funds enforce its individual financial reporting, analysis and auditing, its dynamic and effective management and its specific supervision by a state supervisory body. The activity-specific objects of accounting lead to the invention of specific approaches and methods of financial reporting, analysis and auditing which enrich the applied general methodology of accounting. Its purpose is to introduce and analyze those specific issues in the mentioned financial institutions which shall improve the management, investment and spending of funds raised for the individual batches of the secured persons of the pension funds. Special attention is paid to the specific activity of the pension funds in a high-risk environment which leads to the formation of specific objects of financial reporting and auditing; preparation of specific so called Supervisory financial reports, analysis of specific indicators for profitability, solvency and liquidity of the funds; determination of reliable framework for the auditors to express their opinion in relation to the fulfillment of the accounting principle “Operating Company”. The specific objects of accounting concern specific items in the asset side of the balance and income statement of pension funds. The main item on the asset side of the balance having the largest share in relation to the other assets of the pension funds are investments in financial assets and instruments. One of the central requirements of the State Supervisory Body is that the raised funds of pension insurance contributions of secured persons shall be invested in financial assets and instruments in order to bring additional income for distribution between the secured persons and the managing pension insurance company. This study presented some of the important and socially significant, and therefore monitored by the State Supervisory Body, specific objects of accounting of pension funds. The activity of the shown financial entities is diverse, accompanied by the development of the insurance and financial risk up to a high extent. The variety of specific objects of accounting leads on his part to a variety of applied accounting methods, research and analysis in light of best international practices which shall contribute to a significant extent to the diligent management and spending of accumulated funds of Pension Funds. The establishment of internal system for surveillance of financial and market risks occurring in the conditions, the establishment of balanced system of methods for preventive analysis, diagnosis and budjeting, the definition of key indicators and the development of reporting, control and analysis processes, will contribute to the comparability, the precise and correct presentation of accounting information in the organization’s financial statement, to its asset and liability and to the establishment of precise risk management systems. The present study can be used in the financial reporting and in various types of financial audit, such as internal audit, executed by the internal structures of the financial enterprises independent financial audit, executed by certified public accountants, registered auditors, and external audit, executed by the State Supervisory Authority or other state bodies.