Annals of the „Constantin Brâncuşi” University of Târgu Jiu, Economy Series, Issue 3/2019 „ACADEMICA BRÂNCUŞI” PUBLISHER, ISBN 978-973-144-889-3 DRAWING UP THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS THAT DO NOT BRING A PLUS OF UTILITY PALIU – POPA LUCIA Prof. PhD., „Constantin Brâncuşi” University of Târgu Jiu, Romania e-mail: univers_cont@yahoo.com COSNEANU LAVINIA Associate teacher dr., „Constantin Brâncuşi” University of Târgu Jiu, Romania e-mail:lavinia_cosneanu@yahoo.com Abstract The objective of the consolidated annual financial statements is to provide a true and fair view of the financial position, financial performance and other information about the group's activity, in accordance with the applicable accounting regulations. From this perspective, and taking into account that the responsibility for the elaboration and fair presentation of the financial statements in accordance with the overall applicable financial reporting framework lies with the management of the entity, supervised by those charged with governance, we find it useful to carry out a study aiming the exception from the compulsoriness to draw up the consolidated financial statements in the context that they will not bring additional benefit for the users in relation to the individual financial statements and the cost/ benefit ratio is unfavorable to the reporting entity. In this respect, we will perform a comparative analysis of the exception from the compulsoriness to draw up the consolidated financial statements at both national and international level and address issues related to the exception to the compulsoriness to draw up the consolidated financial statements that are not going to bring additional benefit for the users, and the cost-benefit ratio is unfavorable to the reporting entity. This study will be conducted from the perspective of the main differences between the provisions of the national accounting regulations (represented by the Order of the Minister of Public Finance no. 1802/2014 for the approval of the Accounting Regulations on the individual annual financial statements and the consolidated annual financial statements as part of our approach) and those of the international reference system. Keywords: consolidated financial statements, subsidiaries, relevance, utility, cost-benefit ratio. Classification JEL: M41, M48 1. INTRODUCTION In particular, the management of an entity is responsible for identifying the overall financial reporting framework to be used in the elaboration and presentation of financial statements. Also, the responsibility for the elaboration and fair presentation of financial statements in accordance with the overall applicable financial reporting framework lies with the management of the entity, supervised by those charged with governance. This responsibility also includes, in addition to selecting and applying appropriate accounting policies, making accounting estimates that are consistent with those circumstances. [10] Thus, in an entity's approaches, the accounting policies are oriented toward adopting those principles, bases, conventions, rules and specific practices necessary for the elaboration and presentation of the financial statements. Moreover, all principles are subordinated to the fair image as fundamental objective of accounting [3], and our approach in this study refers to the exception to the compulsoriness to draw up the consolidated financial statements - a process that has a remarkable role within the International Financial Reporting Standards. [4] 2. EXCEPTIONS FROM DRAWING UP THE CONSOLIDATED ANNUAL FINANCIAL STATEMENTS According to the provisions of the Accounting Law no. 82/1991 republished “the parent companies, defined in this way by the accounting regulations applicable to the groups of companies, also draw up and present the consolidated annual financial statements” (Art. 9, par. 37