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Are accounting errors caused by national accounting standards? The goal of this paper is to identify the problems with the quality of accounting information when the new Czech accounting standards are used in the public sector. The aim is then to compare the impact of IPSAS and IFRS on the Czech accounting standards and the accounting error rate of private entities and public sector entities. Data analyzed in this paper were obtained in 2018 and 2019. The results of quantitative research are subjected to statistical testing in order to answer the research questions as well as identify differences between profit and non-profit (public sector) organizations. Results indicate that the impact of Czech GAAP on the occurrence of accounting errors is not statistically significant for either business or public sector entities. In addition, according to respondents, the Czech accounting standards after the public finance accounting reform are not considered to be the usual cause of errors in accounting. Actually, compliance with the updated Czech GAAP improves the quality of the financial statements and avoids errors when preparing financial statements. These findings are in line with several existing papers and thus support the existing idea that IPSAS or IFRS application promotes the quality of accounting. © 2022, Bucharest University of Economic Studies Publishing House. All rights reserved.

Account receivables constitute a significant portion of current assets, and the issue of receivables management is studied from many aspects and in many different contexts and levels. The purpose of this paper is to analyse the use of the prudence principle in the account's receivables area in Czech companies. This research paper aims to evaluate the view of enterprises whether they are willing to make impairment of receivables, what types of impairment they prefer, and how they assess the impairment of receivables. The research was done through a questionnaire survey. We received a total of 185 completed questionnaires. The research was done in 2019 in enterprises from the Czech Republic. Our results show that the enterprises make the impairment of receivables regardless of their sector. The impairment of receivables is more preferred in medium-sized and large enterprises. The medium-sized and large enterprises prefer a combination of tax and non-tax impairment of receivables. At the same time, the medium-sized and large enterprises more appreciate the impairment of receivables as a percentage of the value of particular receivable. © The Author(s) 2021. This is an open access article under the CC-BY 4.0 license.

Research background: Accounting records provide a wide range of data necessary for decisions of the management as well as for users of a company's financial statements. IFRS represents one of the widely accepted accounting principles, often mentioned in relation to the preparation of high-quality financial statements. Purpose of the article: The aim of this paper is to identify the factors contributing to the occurrence of misstatements when preparing financial statements under IFRS. The subsequent goal is to identify the possible influences of such misstatements on the users of the financial statements. Methods: The research itself focuses on perceived problems in IFRS application in the Czech Republic. The total tested population is 193 Czech companies preparing their financial statements under IFRS. Descriptive statistics, the chi-square test of independence along with proportional tests, are used for the statistical data analysis. Findings & Value added: The results indicate that, while misstatements in accounting do not occur regularly, a statistical dependence can be shown between the frequency of misstatements occurrence and the average size of misstatements. The frequency of the subsequently identified misstatements is also proven to be statistically dependent on the average size of misstatements. The IFRS themselves are not proven to influence misstatement occurrences in financial statements, which is in contrast with previous studies. Managerial pressures, similarly to other studies, are proven by the research to be affecting the quality of accounting information. This paper broadens the literature on the factors influencing the quality of financial statements prepared under IFRS and simultaneously reaches conclusions disproving the frequently noted benefits of IFRS implementation.

Research background: Previous studies have demonstrated that providing relevant information to users is positively affected by higher quality of accounting standards and adhering to ethical rules and accounting principles by accounting professionals. On the other hand, there are a lot of cases when the law was broken. The most common reason for committing financial statement's fraud include increasing stock prices, getting loans from bank or avoiding payment of taxes. Purpose of the article: The aim of this paper is to evaluate both the relationship between using of legislation and accounting errors rate in the financial statements as well as the possible using of creative accounting from the point of view of enterprises and non-profit organizations in the Czech Republic. Methods: Among the quantitative research methods the questionnaire was used. The questionnaires were sent out to randomly 201 selected enterprises and non-profit organization. The survey was conducted from September 2017 to the end of January 2018. The data were analyzed by means of the tools of descriptive statistics and the chi-square goodness of fit test. The research questions sought to investigate whether Czech Accounting Standards helped in all areas of accounting and reporting and avoiding of errors in financial statements, and whether the respondents encountered fraudulent procedures in compiling financial statements. Findings & Value added: The results indicated that using Czech Accounting Standards was perceived as a useful tool in solving all situations in areas of accounting and avoiding accounting errors. Moreover, it was proved that the volume and frequency of errors were not significant in financial statements.

Achievement of high quality of accounting information in financial statements requires thorough adherence to generally accepted accounting principles. In connection with deferred tax, this concerns especially the prudence principle and the going concern principle. The deferred tax also has an impact on fiscal sustainability in any given country. The aim of this contribution is to evaluate how information about deferred tax is reported by small and medium sized enterprises in Czech Republic and evaluate quality of such reporting. The research was conducted in the form of a questionnaire survey concerning recognition of deferred tax among accounting units which prepare their financial statements according to IFRS or according to Czech accounting standards. The entities that stated in the questionnaire that they recognize deferred tax were further analysed in more detail. The survey revealed that the standard does not take into consideration that small and medium-sized enterprises would not have to account for deferred tax. The research clearly showed the unwillingness of accounting entities to recognize deferred tax voluntarily. © 2018, General Jonas Zemaitis Military Academy of Lithuania.

Accounting is a tool of evidence for reporting assets, equities, liabilities, expenses, revenues and profits or losses of the accounting unit. This information is collectively presented in financial statements, which are an essential source of information for external subjects. Nevertheless, the resulting financial statements are relevant only to the extent to which the information charged in the accounting is correct and error-free. For this reason, the aim of this article is to examine the individual areas recorded in accounting in terms of their possible bias due to an error. The objective of this article is to determine which of the areas of accounting are riskiest in relation to the occurrence of errors, and this in connection to the existence of an important foreign partner of the accounting unit. The risk of of the error occurrence is examined from the accountants' perspective. For this purpose, a questionnaire survey was used for data collection focusing on areas that are considered to be the most important by the accountants and the areas which are the most problematic. The receivables, expenses and revenues were indicated as the most significant. The areas of long-term assets, financial assets and inventories appear to be problematic due to tax impacts. Expenses, revenues, accruals and deferrals appear to be problematic due to issues with correct valuation. The difference in perception of risk of the error occurrence in relation to the existence of a foreign business partner was proven only for some accounting areas such as liabilities, inventories or expenses.

The aim of the paper is to analyse the opinion of enterprise representatives upon the risk of errors occurrence in selected areas of accounting. Research presented in this paper explains the view of enterprise accountants upon the risk of errors occurrence, both unintentional and intentional, aimed towards the creation of so called "creative accounting". The research itself, done on a sample of 232 Czech enterprises, was based on questionnaire investigation which focused on perception of problematic areas influencing the quality of accounting information. The obtained set of data was evaluated using descriptive method and mathematical/inference statistics. Special testing was done at hypotheses on concordance of two mean values and at the Friedman test. Evaluation of problematic rates of individual areas of accounting revealed that practically each observed area of accounting is connected with specific difficulties. The major causes of problems are tax impacts, namely in the area of the cost, time differentiation and of revenues and also difficulty in pricing, especially in the area of inventories and fixed and financial assets. High respondents' concordance on rating individual accounting areas as to the risk of an error occurrence was detected. It stemmed from the research that the risk of formation of unintentional errors is subjectively rated as the highest in the areas of conjectural and adjusting items and the lowest at asset and depreciation classification. Rating the space for intentional distortion of accounting statements indicates a very reserved attitude of the respondents. The results have proved that in the respondents' opinion practically all areas of accounting give space for occurrence of errors. The results of the research provided a somewhat different perspective on the issue of accounting errors in comparison with results published by other authors who used objective assessment of error rate as a departure point.

Insolvency proceeding and liquidation of bankrupt companies are important topics in days of economic slowdown which affected all economies after financial crisis. This paper aims to find main differences between insolvency proceedings in the countries of Visegrad four. The main goal is to describe insolvency law in member countries and then to compare it from the poin of view of main actors. This comparison can help to find which changes and ideas could be applied to improve and make more effective the Czech insolvency system. The countries of Visegrad four was selected because of their common history and similar economic development. First of all, the legal background of insolvency proceedings which is possible for legal entities in these countries is examined. Then this paper deals with insolvency proceedings from the point of view of their participants - creditors, debtors and insolvency administrator. We have found that insolvency proceedings in these countries are very similar but there is still some inspiration for the Czech insolvency system.

The article focuses on the impact of the 2008 Insolvency Act in Czech Republic, which introduced new consumer bankruptcy legislation designed to help debtors become free of unpaid debts. The survey included 664 insolvency proceedings of individuals started in 2008 and ended by 2013. A situation emerges in which we can for the first time evaluate the level of creditors’ satisfaction on the basis of concrete data mined from the insolvency register. The aim of article was to identify and compare trends between three key participants of insolvency proceedings – debtors, creditors and judiciary. The survey showed a higher initial debt among males, although they were at the same time able to repay a higher percentage of this debt. For creditors, the survey showed that almost a fifth of receivables are secured, most frequently with real estate. The part focused on the court structure identified differences in time needed for regional courts to pass the rulings. © Foundation of International Studies, 2016.

According to statistics, the indebtedness of Czech households has been on the rise since 2000, while a broadening supply from the financial sector, the growing standard of living (which is connected with debt financing of housing) and the tendency to favour a consumer lifestyle have contributed to the growing volume of credits. The aim of our survey is to ascertain the extent to which creditors of debtors in debt relief are satisfied. A sample of insolvency proceedings permitted in 2008 was surveyed. Of these insolvency proceedings, we selected personal bankruptcies which underwent the five-year repayment period required by the insolvency act. A situation emerges in which we can for the first time evaluate the success of creditors satisfaction on the basis of concrete data which we gained from the insolvency register. On the basis of a survey, it was found that individual creditors are satisfied to 50 % of their ascertained receivables. The given initial finding is interesting especially in view of the fact that the law itself prescribes a 30 % minimal limit of satisfaction for debtors. Further, the survey focused on the problem of securing receivables. The insolvency act has markedly changed the position of the creditor which secures its receivable by some form of collateral. A secured receivable can be monetized during the course of insolvency proceedings, and following the deduction of connected expenses the entire proceeds from the monetized property belong to the secured creditor. By contrast, in a case of personal bankruptcy a non-secured creditor is satisfied according to a percentage in a payment schedule. We surveyed especially the proportion of secured receivables and the form of collateral. From the data it stemmed that 19.62 % of receivables are secured with the debtor's property, most frequently a house, plot of land, flat or other form of collateral.

The article concerns deferred tax and its significance for the information capability of the financial statement. Temporary differences between accounting and tax rules are the cause of the formation of deferred tax. The accounting and recognition thereof stems from generally accepted accounting principles. The accrual principle, the principle of caution and that of the functioning of the accounting entity in the foreseeable future are at issue. The majority of small and medium-sized enterprises are not obliged to account for and recognize deferred tax, although they may do so, and it is desirable from the perspective of faithful representation of the financial situation of the accounting entity. The conducted investigation in the form of a questionnaire survey ascertained whether accounting entities recognize deferred tax. If not, for what reasons; and if so, from which temporary differences they ascertain it.

The purpose of this contribution is to ascertain the rate of creditors’ satisfaction in debt relief. The aim of the paper is to set an approximation functions which guarantee a value of 100% of satisfaction of creditors’ receivables for a zero rate of debt and asymptotically nears a level of 30% with an increasing rate of debt. There are two methods used in this paper. Method of analysis was used to analyse of collected data on the course of debt relief of natural person. The method of the ordinary least squares method was used for setting the approximation functions. On the basis of a survey, it was found that individual creditors are satisfied to 50% of their ascertained receivables. © 2015 The Authors. Published by VGTU Press.

Purpose of the article: The adverse economic situation in the Czech Republic has elicited a rising number of proposals to commence insolvency proceedings. Insolvency proceedings are resolved by the insolvency act from January 2008. The longer the duration of insolvency proceedings, the higher are their costs, which reduce gained yields. Methodology/methods: Research is focused on the area of small and medium-sized enterprises. The research was based on a questionnaire survey in which representatives of small and medium-sized enterprises in the Czech Republic were addressed. The questionnaire contained 18 closed questions.The research results are evaluated and presented through a graphical representation. Scientific aim: The article aims to gain information from representatives of small and medium firms as to how they settle overdue receivables, how they enforce them, whether they have had experience with an arbitration clause and whether they have been participants in insolvency proceedings. Findings: Research has demonstrated that small and medium enterprises, for the most part, do not include an arbitration clause in purchase agreements. Small and medium enterprises tend to utilize court enforcement of receivables in exceptional cases and do not ascertain receivables of a subject in insolvency proceedings. They mostly enforce their irrecoverable receivables themselves. The relative amount of transaction costs connected with enforcement of receivables is in the vicinity of 1 to 5%, and only a small part (1 to 5%) of the volume of overdue receivables in insolvency proceedings are truly successfully enforced. Conclusions: The course of insolvency proceedings can be considered to be an urgent problem in need of a solution, as the longer the duration of insolvency proceedings, the higher the costs for the parties involved and the lower the total amount recovered.

The paper aims to ascertain the level of harmonization of accounting in small and medium enterprises in the Czech Republic and the impacts arising from the harmonization process. On the basis of the conducted survey, companies show a reserved interest in reporting according to IFRS. As a decisive reason for adopting IFRSs as a reporting framework for a company the adoption shall brought out some gains. Only minority of companies considers the greatest advantage for using IFRS in the comparability of financial statements, strengthening the credibility of financial statements and strengthening the prestige of the business.

In the current economic conditions it is impossible to consider anything as permanent and predictable. A certain level of financial education across all age groups is necessary. It is no longer possible the case that what one learns in one time can use a long time without changes. Especially in the economic area, it is necessary to enable individuals still have further education, acquisition by obtaining of new knowledge and experience and deepen the already acquired. Likewise, how it is changed everything around, the financial environment is changing too. In the markets, there are many new possibilities of investment, saving or borrowing capital. Therefore, it is essential that each individual had a certain level of financial literacy. The aim of this article is to present the results of the research focused on the level of financial literacy among the high school students in the Czech Republic. A questionnaire survey was attended by participants from the high school students from Olomouc, Zlin and Moravian-Silesian Region in the total number of 297 respondents. The main area was examined the relationship between educational attainment and obtained level of financial literacy. During the research, there were the statistical methods to verify the results used, specifically the χ2 test for significance evaluation and the Pearson contingency coefficient for establishing the intensity of relations. Based on the obtained results we can say that there is agreement between the self-assessment of respondents ́ financial literacy and the educational attainment. The results also show the reluctance of students to use the services of the financial advisors, mainly due to the fact the respondent do not know any representatives of this profession.

This paper provides an analysis focusing on knowledge of professional accountants in the area of accounting measurement and perceptions in relation to a series of transformation processes taking place at national and international level. The employed research methodology relies on implementing a questionnaire survey. Results document relatively good knowledge of local accounting legislature, however the knowledge gap in international legislature is visible. The paper also develops an analysis focusing on professional valuers and their activity in the area of financial instruments' measurement in order to dimension their opinion, knowledge and perceptions in relation to a series of transformation processes taking place at national and international level. There was documented the association between the developed activity and the valuers' level of professional training when considering the national market of valuation services in the field of financial instruments. The results offer significant insights into the manner in which professionals in the area of accounting handled the dynamic of their national accounting system, therefore suggesting ways to optimize the profession's future development.

This research investigates the perceptions of stakeholders involved in financial reporting in four emerging economies (the Czech Republic, Hungary, Romania, and Turkey) regarding the possible implementation of IFRS for SMEs, in terms of costs, benefits, and strategy of adoption. In-depth, semi-structured interviews were conducted with representatives of main stakeholders (preparers, auditors, regulators, professional bodies, and users). We find more support for IFRS for SMEs implementation in these four countries than suggested by the results of the European Commission's consultation for the European Union. Interviews reveal differences between stakeholder groups and between countries regarding the preferred implementation approach (mandatory adoption, voluntary adoption or convergence of national regulations with IFRS for SMEs). Interviews indicate the most support for the convergence approach. However, users oppose convergence and prefer the adoption of IFRS for SMEs. The convergence approach moves regulators' attention from users' needs to preparers' preferences and preparedness. This finding is relevant in the decision-making process of national regulators, who should balance the needs of various stakeholders, but also the country's political and economic objectives. © 2013 John Wiley & Sons Ltd.

In the last few years, the number of filed insolvency proposals has been constantly growing, which reflects the current economic situation. This article concerns the incidence of personal bankruptcies and their settlement (through debt relief) in the Czech Republic, especially in the Moravian-Silesian region, specifically in the Karvin region. This is a locality where the incidence of personal bankruptcy and its settlement through debt relief is among the highest in the Czech Republic. One of the reasons for this state is the composition of the population, which moved to this locality for work. A large part of the observed debtors had only attained primary education or are only trained. Their financial literacy is not of an adequate level, so they are cannot be aware of the risks stemming from borrowing money or anticipate the consequences arising from leaving their liabilities unfulfilled. The debtors borrowed money without prior consideration as to whether they would be able to return the borrowed money including interest. In this way, they got caught in a debt spiral insofar as they attempted to pay their present debts by closing further loan agreements under unfavourable conditions with financial institutions that are not under the supervision of the Czech National Bank. The Insolvency Act settles citizen over-indebtedness through debt relief. If the debtor fulfils conditions prescribed by the state, the debtor can after 5 years rid itself of its theretofore unpaid debts. From the undertaken survey it follows that men predominate among debtors in debt relief. The largest group is made up of men between 35 to 45 years of age. Among women, the most indebted age group is up to 35 years of age. Working pensioners, who have an assured regular, stable income which they cannot lose insofar as it is paid by the state, are the most reliable from the perspective of the relative extent to which creditor demands are satisfied.

Prudence principle belongs to traditionally generally accepted accounting principles and is closely linked with another accounting principle going concern in the foreseeable future. Both of these accounting principles, based on which accounting systems are built, have one common denominator; it is measurement as one of the basic methodological elements of accounting. The fundamental problem in the use of the above instruments of prudence principle is a strong dependency of accounting of the companies on tax incidences. Paper also provides an analysis focusing on knowledge of Czech university graduates in the area of accounting measurement and perceptions in relation to a series of transformation processes taking place at national and international level. The employed research methodology relies on implementing a questionnaire survey. Paper documents relatively good knowledge of local accounting legislature, however the huge knowledge gap in international legislature.

The international accounting harmonization process and recent developments in international financial reporting standards determined a shift in accounting paradigms from historical cost accounting towards fair value accounting. Our paper analyzes how this shift impacted upon Czech accounting by particularly focusing on reporting for securities. Extending the objective of our paper, we assess the current status in terms of securities being used by small and medium-sized entities and entities' ability to measure these financial instruments. The developed analysis relies on information being collected through the use of a questionnaire based survey. Finally we conclude through a comparative approach of Czech accounting regulations and International Financial Reporting Standards in the area of financial instruments.

The paper deals with the creating of provisions, impairment and depreciation of fixed assets in SMEs from the auditor's perspective. Prudence principle belongs to traditionally generally accepted accounting principles and is closely linked with another accounting principle - going concern in the foreseeable future. Both of these accounting principles, based on which accounting systems are built, have one common denominator; it is measurement as one of the basic methodological elements of accounting. The fundamental problem in the use of the above instruments of prudence principle in SMEs is a strong dependency of accounting of the companies on tax incidences.

Small and medium sized enterprises (SMEs) are driving force of each economy. This chapter deals with the current stage of financial reporting for SMEs in Slovakia. Due to the globalization of business and international harmonization of financial reporting also Slovakia experiences a shift in paradigms from historical costs accounting towards fair value measurement. Chapter provides an analysis between national accounting legislature and standard IFRS for SMEs.

It seemed that the single EU market needed unified legal standards and standardization in the sphere of financial reporting for SMEs. For this mason, important initiatives started at the beginning of the new millennium with a purpose to provide SMEs with the knowledge and tools necessary for crossing the local borders and entering other EU countries but also countries outside the EU and for easier export of products and services. Financial statements prepared in compliance with international standards may provide a high level of transparency and comparability. Companies which comply can achieve many benefits. Use of international standards may reduce investor uncertainty and can thus reduce the cost of capital. It can significantly improve the communication between business users and all their statements.

Z důvodu nadnárodní účetní harmonizace lze v posledních letech vysledovat odklon od tradičního oceňování na bázi historických cen směrem k vykazování v reálných hodnotách. Tento trend je v českém účetnictví zejména aplikován na oblast oceňování a vykazování cenných papírů. Cílem tohoto příspěvku je zhodnotit stávající stav využití cenných papírů malými a středními podniky, zhodnotit jejich schopnost ocenit tyto finanční nástroje a v neposlední řadě provést komparativní analýzu českých účetních pravidel s pravidly nadnárodními, konkrétně pak Mezinárodními standardy účetního výkaznictví (IFRS)., Due to the harmonization of international accounting in recent years, there has been a declining trend from historical costs accounting towards a fair value measurement. This changing trend is more applicable particularly for the measurement and reporting of financial securities in the Czech Republic. The purpose of this paper is to analyze the current state in the use of financial securities by Small and Medium-sized enterprises, to assess their abilities to valuate these financial instruments, and finally, to prepare a comparative analysis of the Czech accounting treatment and the International Financial Reporting Standards (IFRSs).

This article aims to describe the relationship between the introduction of component depreciation of fixed assets in the Czech accounting legislation and the creation of provisions for repairs of tangible assets. The current practice of making provision for repairs eliminated the fixed assets of different lifetime components of fixed assets. Component depreciation takes lifetime of different components into account, but on the other hand a tax disadvantages creation of tax provisions for repairs. Possible methods of accounting and tax depreciation of fixed assets and provisions for adjustments are explained by concrete examples. The authors also warn of improper practices in the Czech legislation on the first use of component depreciation for fixed assets already depreciated.