M41 - AccountingReturn

The objective of this paper is to examine the factors influencing voluntary disclosures during the Initial Public Offering (IPO) process. Through a systematic review of the literature, the paper identifies and analyses the theoretical frameworks that underpin disclosure practices, including the constraints that may limit such disclosures. Based on an examination of 330 research papers obtained from the Scopus database, the findings indicate that the dominant theoretical perspectives in this field are the signalling theory and the proprietary costs theory. By integrating insights from competing theoretical frameworks, this review offers a comprehensive understanding of the determinants driving the decision-making process undertaken by management to reveal private information in IPO prospectuses.

This article focuses on possible approaches to accounting and tax issues that arise during the business combinations, with an emphasis on the use of management accounting methods for effective performance line management and cost allocation. The theoretical links between financial and management accounting and the processes of mergers and divisions are presented. The text also analyzes specific areas that need to be addressed in corporate’s divisions, including the allocation of acquisition prices, tax losses, overhead costs, and other transactions from the decisive date of the division to the date of legal effects. Based on a case study, the article demonstrates the practical application of calculation methods for the appropriate allocation of overheads and tax losses arising during the division. The main contribution is to propose a specific procedure and methodology that can be used by companies to allocate costs in a fair and economically justifiable manner and to optimize accounting and tax strategies in corporate divisions. The research results show that the use of management accounting methods contributes significantly to the transparency and efficiency of cost management in the process of business combinations.

The article deals with the issue of reporting information on corporate social responsibility in the annual reports of Czech and Slovak companies. The analysis is based on selected aspects of corporate social responsibility as defined by GRI standards and evaluates their presentation in the annual reports of 25 Czech and 25 Slovak companies in 2015 and 2020. A two-sample t-test was used to evaluate the significance of the change in the reported information. The most frequently reported aspects include information related to risks and opportunities impacting the company's revenues and expenses. Conversely, among the least frequently reported information can be found aspects dealing with diversity policy. The analysis did not confirm a significant improvement in the narrative value of CSR information reported in annual reports between 2015 and 2020.

This paper investigates the effectiveness of studying accounting from electronicresources among secondary school students. The most preferred electronic resourceis explanatory videos including diagrams, texts and images. Also, presentation filescontaining the teacher's explanation are highly preferred. The aim of the paper is toevaluate whether the success of studies can be related to the use of electronic studyresources. A carefully prepared didactic test presented to the experimental andcontrol study group showed how the pupils react to test questions of different types.The results of this didactic test were used to statistically establish whether the successof solving this test depends or does not depend on the use of electronic studyresources. In this way, it would be possible to measure the effectiveness of studyingfrom electronic sources. Undoubtedly, the personality of the teacher is also veryimportant in evaluating the student's success. Therefore, there is also an output fromsecondary research that will show how the teacher's personality has an effect on thestudent's success. The discussion will focus on a number of opinions that are oftenmentioned in regard to electronic resources for studying.

The article examines how issuers of publicly traded securities comply with the EU Regulation on the European Single Electronic Format (ESEF) and related rules of the Czech National Bank. Based on a set of criteria, the paper empirically assesses the degree of formal compliance with the electronic disclosure obligations in a sample of Czech issuers. The analysis of data for the year 2020 reveals that issuers that are part of economic units for which consolidated financial statements are prepared in accordance with IFRS comply with formal disclosure obligations to a greater extent than issuers that prepare only individual financial statements in accordance with IFRS. Furthermore, a higher compliance rate was found for issuers belonging to the financial sector compared to entities outside the financial sector. Finally, audits of financial statements by big audit firms are associated with slightly higher compliance rates compared to issuers that have their financial statements audited by a non-„Big 4“ auditor.

Paper deals with the effects of inflation on business management and the ways of expressing them in financial statements from a historical point of view. It points to the constructions of classical balance sheet theories, which arose as a reaction to the development of inflation in Germany after the First World War, with special attention to one of them: the organic balance sheet theory Schmidt’s, first published a hundred years ago. The organic balance sheet is in many respects the predecessor of the contemporary reporting of value data mainly in the proper (real) price [fair value], with the fact that Schmidt also derived the determination of the "correct" income from the current prices (Tageswert). The issue of the variable purchasing power of the monetary unit is still alive, as is the effort to deal with this phenomenon within the framework of financial reporting. At the end of the twentieth century, complex accounting valuation models created in Europe and the USA, built on dynamic reporting principles together with the use of sophisticated calculations to determine reported values. The issue supplements a small illustrative example, using methodology from the USA.

This article focuses on cross-border mergers carried out between 2008 and 2020 with Czech companies, while in the introduction the reader is introduced to the entire issue of cross-border mergers together with the definition of the reasons for this transaction. For a clear definition of adequate and currently valid legislation in this area, the historical development of the essential European directives regulating mergers and their amendments until the beginning of 2022 is presented in Chapter 2, with the determination of the obligations that companies incur when carrying out a cross-border merger. A substantial part of the text is focused on the analysis of the total number of cross-border mergers that were implemented with Czech companies in the years specified above. The total frequency is then broken down and analyzed according to the individual member states in which the company participating in the cross-border merger with the Czech company had its headquarters, and the basic parameters of the merger were examined. The greatest attention is paid to the mergers of Czech and German companies, which are expected to be very frequent due to the geographical location of both countries, and to the analysis of the individual elements of a cross-border merger according to the completed merger project. The last part of the entire text deals with the evaluation of the management and performance of companies in the years following the chosen decisive date of the merger of the companies participating in the Czech-German cross-border merger.

The aim of the research is to identify and characterize in more detail the factors that influence the effect of performance measurement and evaluation and reward systems on work effort and performance. In doing so, the influence not only on the level of work effort but also on its direction in line with overall company objectives is assessed. For the empirical research, a qualitative research method in the form of a case study in a selected company was chosen. For data collection, methods of document analysis and structured in-depth interviews were used. A total of 26 structured interviews were conducted. The aim of the structured interviews was to understand in detail the impact, perceptions and implications of the performance evaluation and reward systems used. It has been shown that when assessing the effectiveness of the systems mentioned, it is necessary to consider not only the characteristics of the performance measurement system, but also the way in which the information is used in management - the characteristics of the way in which performance is managed. The degree of link between the performance measurement system and the reward system was found to be a significant factor influencing the interactive vs. diagnostic use of the performance measurement system. At the same time, the research further characterized performance measurability as an important contextual factor influencing the effectiveness of performance rewards.

The paper deals with the possibilities of using artificial intelligence in tasks and activities of management accounting. Its aim is to create a comprehensive overview of the current state and possibilities of utilization of artificial intelligence technologies in management accounting, based on a systematic literature review of empirical literature. Academic articles were complemented by current surveys of research consulting companies and professional organizations and bodies. Literature review results are grouped by specific key areas of management accounting, analyzing the tools for facilitating the budgeting and calculation processes or performance measurement. Artificial intelligence is also presented as a customization process or strategic decisions support. Resulting from the executed analysis, a few fundamental aspects affecting the success of artificial intelligence technologies implementation were determined, primarily the quality of the primary data and reasonable choice of activities suitable for automation.

Reward system is a key management tool associated with significant costs and its potential to influence work performance and motivation has been the subject of scientific interest for many years. The self-determination theory (and the preceding cognitive evaluation theory) is one of the relevant theories of work motivation on which research (including managerial accounting research) is based in assessing the impact of rewards on employees' work behavior. This literature review focuses on the development of the self-determination theory, its assumptions, the key conclusions of research studies, and the shift in the perception of rewards from the time the theory was formulated to the present. While early research highlighted the undesirable motivational effects of pay for performance, recent research addresses the contextual factors of the work environment and reward system and analyzes in more detail the effect of pay for performance not only on motivation and performance but also employee retention and satisfaction.

The aim of the article is to present the history of trust funds and to analyze their establishment since this institute was included in the Czech legislation. The research is based on publicly available information from the register of trust funds. 2,268 trust funds were found between 2014 and 2020. The results show that the number of established trust funds increased during the analyzed years, except for the year 2019. The most trust funds are registered with the Municipal Court in Prague and the vast majority of trust funds are private. Although international research on voluntary disclosure indicates the benefits of this disclosure, only four trusts have published their financial statements. On the contrary, the most trust funds do not publish their documents as financial statements or statutes.

Although the benefits of the Statement of Cash Flows for its users are indisputable, historically this statement has not been captured in the Czech legislation to a major extent. The aim of the paper is to describe and evaluate the quality of cash flows reporting as required by the Czech legislation as well as its evolution over time and its future development. The research methodology is based on comparative analysis. It can be concluded that the Statement of Cash Flows holds exceptionally weak position in the Czech accounting legislation over time. For the first ten years, it had not been mentioned in the legislation at all; after its introduction only a very little number of significant subsequent changes was made. Moreover, not even the current discussions on the new concept of accounting legislation do not indicate any intention to reconsider the approach to such an important statement.

This paper deals with management accounting change in the Czech Republic since nineties of the 20th century. The aim of the paper is to recognize key development tendencies and determining factors and to compare these findings with other CEE countries as well as Western countries. Further, management accounting systems and techniques used in Czech companies and their changes are discussed. As dominant changes, we identified addition (strategic management accounting, performance measurement and assessment, environmental management accounting and sustainability accounting) and variation (costing, planning and budgeting, cost management and cost accounting); reduction, i.e. the removal with no replacement, was not recognized. The research is based on systematic literature review on empirical literature primarily and in addition, observation and interviews serve as supplementary data collection methods.

This paper focuses on disclosure requirements relating to international accounting standard IAS 36 Impairment of assets. The focus of the analysis is, except mandatory disclosure, also on its potential impacts on market liquidity and investment decisions especially of smaller investors. The data analyzed in areas relating to information about impairment of goodwill, property, plant and equipment and investments in subsidiaries belongs to publicly traded companies on the Prague Stock Exchange from 2015-2017. The results of the investigation confirmed the continuation of historically found non-compliance with information obligations and identified this deficiency as one of the causes of the underdeveloped securities market.

The article focuses on disclosure of information regarding the intellectual capital in annual reports of companies carrying out their reports based on IFRS standards. Intellectual capital can be defined as a combination of human, structural and relation capital of an organisation and is very closely connected to the issue of intangible assets in accounting. For the purpose of determination of the current state of reporting, the annual reports of companies included in the stock index TexDAX (30 biggest tech-companies on the german stock market) for the year 2017 were analysed. The analysis of the financial statements, including notes, showed that entities adhere to the details outlined in IAS 38 and do not tend to disclose information on a more detailed group or asset level basis. Furthermore, based on the results of the analysis it can be concluded that companies generally do not overly focus on the complex reporting of information regarding intellectual capital in other parts of annual reports.

This article discusses the impact of the implementation of IFRS 9 on the banking sector in the Czech Republic, focusing primarily on observable data from the financial statements of banking institutions. The analysis included data from 33 banking institutions that hold more than 98% of the value of banking assets in the Czech Republic. The analysis results can be summarized so that implementation of IFRS 9 led to impairment "only" about 0.08%. Institutions reporting under Czech accounting rules have created significantly fewer provisions for assets than institutions reporting under IFRS. The impact on the reclassification of financial assets was considered to be the least significant, with only minor changes in the structure of held financial assets.

The publication of Luca Pacioli's work in 1494 caused the turning point in the development of double-entry bookkeeping and supported its expansion from Italy to other European countries. The article takes into account the research on this topic and seeks parallels between development in the Czech lands and Western Europe in the early period of accounting history. Based on the heuristic research and regressive criticism of sources preserved in the Czech archives and libraries, the article claims that there are no evidences about the expansion of Paciolio's work or other prints on double-entry bookkeeping in the Czech lands, similar manuals published in the same period in our territory described another accounting system and there are also no proofs of using of double-entry bookkeeping in the real accounting practice. The pilot comparison with Poland showed similarities, suggesting an analogous development in the Central European area against to the countries of Western Europe.

The article discusses the auditor's responsibility - first in general and subsequently in relation to transfer prices for related parties. The basis for the assessment of transfer prices from the auditor perspective is the view of accounting regulations and auditing standards. Based on the auditor's responsibility analysis, the article analyzes the judiciary's decision-making based on the relationship between the auditor's report and transfer prices. The research based on the case law of the Supreme Administrative Court refers to the auditors' failure in issuing auditor's reports on the financial statements. The result of the research shows that the auditor did not pay enough attention to the correct setting of transfer prices. The consequences are not only tax credits, but also incorrectly reported information on expenses (revenues) and profit or loss of the entities in their financial statements.

The National Accounting Board (NAB) is an independent professional organization which is created by Chamber of Auditors of the Czech Republic, Chamber of Tax Advisers of Czech Republic, Union of Accountants and Faculty of Finance and Accounting of the University of Economics, Prague. Apart from commenting on legislative changes in accounting regulations NAB, also prepares interpretations of Czech accounting legislation for situations which are not regulated by this legislation or when its interpretation is not unified. Interpretations explain topics proposed by accountant or auditors from their practice. Interpretations thus express opinions which were agreed by the professionals of the NAB. The NAB assists in improving professional qualifications and professional ethics in the area of accounting methodology. The goal of interpretations is to ensure that accounting information in financial statements will give a true and fair view of the financial situation and management of the company to users of financial statements who make financial decisions.

The purpose of the article and related research is the comparison of the quality of revenue disclosures. For this purpose the current state of requirements for revenue disclosure in Czech accounting legislation and IFRS is outlined. In the next step the sample of financial statements was determined. The sample consisted of 10 largest Czech companies reporting under Czech accounting principles and 10 largest Czech companies reporting under IFRS, both of these based on revenue amount. The sample was reviewed from perspective of 11 evaluation criteria consisting of general revenue principles and disclosures about nature and content of revenues. The results of research preliminarily confirmed the hypothesis that the revenue disclosures in IFRS financial statements bring more information about recognition, measurement and nature of revenues than revenue disclosures in the financial statements based on Czech accounting principles. Due to the the lower size of sample the extension of sample is recommended for full confirmation of results. Nevertheless, the main issues in revenue disclosures in the financial statements of large companies indicate the areas of further focus for the Czech accounting legislation.

The aim of this paper is to identify whether small and medium-sized companies in the Czech Republic disclose non-financial information even though non-financial information disclosure is not obligatory. To answer on research question meant to determine non-financial information in the article as a first step. As a next step of research, manually collected data from annual reports and explanatory notes to financial statements for selected Czech small and medium-sized companies in Commercial Register were established as the databases for small and medium-sized companies doesn't exist in the CR. Content analysis for 650 companies was used to select 75 small and medium-sized companies according to conditions of research. There were determined three key research questions for companies in research sample: disclosure of non-financial information in sample of medium-sized companies, in sample of small audited companies and sample of small non-audited ones. As it also seems that there is a tendency in group of small-sized companies, that small audited companies disclose non-financial information more often than small non-audited companies, as an integral part of research was to proof this tendency at least. However, the statistical significance of these results is questionable.

This paper focuses on the systems of accounts in the Czech lands roughly during the second half of the twentieth century. The period is characterized by the strong variability of the rules, which we usually refer to as national adaptation of bookkeeping. From the second half of the 1940s until the early 1990s, our country underwent a specific economic development that can be labeled as "an exit of and then return to the market economy." The legislativ of bookkeeping in force at that time led to changes - often radical - in the form of three reforms. The system of accounts was gradually "redesigned" from the market-oriented corporate accounting (1946-1952) through the accounting records (1952-1965) followed by the system of financial and intra-company accounting (1965-1974) to a more complex one-tier system (1974-1991).

This paper highlights the essence of ensuring revenue and expenses comparability in the income statement, with an emphasis on their factual dimension. The problem relates mainly to the presentation of costs type composition when they are necessarily adjusted for changes in the inventory of own production. The image of the cost type composition in the existence of an aggregate item "change in inventory" is somewhat deviating from the actual range of cost types that are related to the outputs sold. Correction would be possible using input-output structural model approaches centered on the valuation problem. Appropriate application requires close synergy between financial and managerial accounting, and the detection of some of the nonaccounting variables.

The article analyzes the development of the political parties and political movement's legislation, which operating in the Czech Republic since 1991 until now with a focus on selected transparency criteria. The act on association in political parties and political movements of the year 1991 is analyzed, which was more than twenty times changed during its existence. Transparency is significantly affected by some changes in law. The article compares the legislation of political parties and political movements with the legislation of other non-profit organizations in the area, which is concerned with the transparency criteria. From a comparison differences result on a level of transparency - the legislation of political parties and political movements is probably the strictest and the most sophisticated in comparison with legislation of other non-profit organizations. This is due to the function of these organizations they have in today's society.

The paper deals with the basic differences in the definition of fixed assets in Czech accounting legislation and International public sector accounting standards. Since 2009, the Czech accounting reform of the public sector has been in progress with the aim of establishing transparent accounting rules built on an accrual basis. At the same time International public sector accounting standards have already provided such rules in the international environment. The aim of this paper is to identify and subsequently compare the basic methodological elements that distinguish those different concepts.

The Czech Republic has implemented the Directive on the common system of parent and subsidiary companies taxation as amended by Council Directive 2006/98/EC. Based on this, the profits paid to parent companies are exempt from withholding tax. All EU Member States are required to implement this Directive. However, a number of states have supplemented their legislation with rules designed to prevent tax evasion. On the contrary, since 2014, the Czech Republic has simplified the rules on commercial law for the payment of equity and has extended the possibilities for payment of dividends since 2018. The empirical research was focused on the exploration of the largest Czech companies and their profits paid out, i.e. on how much of the generated profits are paid to parent companies abroad. The selected sample included 56 companies from the CZECH TOP 100 ranking, 31 joint- stock companies (55%) and 25 limited liability companies. All these companies paid dividends in the years 2013 to 2015. Banks and financial institutions were not in the survey. It was found that 16 out of 31 joint-stock companies paid dividends each year at the amount close to the entire reported profit for the prior period. The same policy was followed by 9 out of 21 limited liability companies. More than 99% of the earnings paid was exempt from withholding tax on the basis of the implementation of the favorable tax regime of the EU Directive in the Czech Income Tax Act.

The paper provides overview of existing foreign research in creative accounting in practice over last five years and perform own research to evaluate form and level of use of creative accounting methods in practice in Czech Republic. The questionnaire survey focuses on accountants, controllers, financial managers and other financial professions. The survey shows that the most extensive application is a choice of the depreciation and valuation methods, use of estimated items and accruals, leases or provision of loans between related parties. In general, techniques focus more on items of income statement and cash flow and less on balance sheet items. The methods are most likely to be found in companies with a turnover more than CZK 5 billion, and least likely for service companies with a turnover up to CZK 200 million. 36% of respondents perceive creative accounting positively and 42% negatively.

The article analyzes the development of the foundation's legislation since 1990 until now. This period is divided into four phases depending on the effectiveness of individual legislation. Special emphasis is placed on the transparency elements contained in the individual legislation. The article compares the analyzed legislation to show their advantages and disadvantages. The article also mentions the researches dealing with the transparency of Czech foundations in the past. These researches show a low level of transparency of Czech foundations and low confidence in their activities. The Act on Foundations and Endowment Funds can be considered the highest quality law in terms of transparency. However, this law has failed to achieve a significant degree of transparency, mainly due to the state's unwillingness to enforce its implementation through the tools it had available. The current effective new Civil Code does not deal with transparency and can not be expected to contribute significant to increase its level and increase confidence in the Czech foundation sector.

The article outlines the risks associated with the implementation of the new information system in the company. The core of the article is the analysis of risk factors in the various phases of ERP system life from the point of view of accounting and its basic functions, ensuring a fair and true view of accounting in the financial statements. Analysis has been made based on secondary date and its application to the accounting needs. Many implementations end with exceeded budget, time schedule or both. Main risks are identified in the chapter 3. From the perspective of accounting, the riskiest phases are system selection, implementation and production system, and the bottlenecks are migration of transaction and master data, decision on setting the correct date for transition to the new system, and ensuring the balance sheet continuity of accounting books in both systems. Accounting risks are also relating to non-compliance with the tax obligations and penalties and fines resulting therefrom. Minimizing these risks helps identify key success factors for each phase.

The Transformation Act came into effect in 2008 as a consequence of transposition of the Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of limited liability companies. The directive aims to secure conditions for cross-border mergers within the European Union. This paper focuses on presentation of results of a study whose aim was to identify the development of characteristics of the cross-border mergers with the participation of a Czech company within eight years after the effective date of the Transformation Act. The analysis is based on real life data of mergers. The research focuses on the development of quantity and type of cross-border mergers whose project was filed in the public register, quantity of finished mergers, number of participating companies and the country under whose legal system the participating companies operate, the position of Czech companies, ownership structure of participating companies, their legal form. The obtained data reveal the persistent differences in the national law of the member states which prevent the proliferation of cross-border mergers. According to the authors, this situation can be solved by the unification of the cross-border mergers legislation within the European Union as a whole.

This article is aimed at the analysis of the newly created standard IFRS 16 Leases. This standard has radically changed the accounting and reporting of leases by the lessee. The standard has abandoned the classification of operating and financial lease and categorically requires that the lessee report all liabilities and assets resulting from leasing contracts. It deals with the benefits as well as with the risks which the standard brings from the point of view of the declarative value of financial statements in comparison with the previous standard IAS 17 Leases.

The article deals with the definition of a consolidated group in the Czech Republic and Slovakia public sector. On 30 January 2015 The International Public Sector Accounting Standards Board published new standard IPSAS 35 - Consolidated Financial Statements. This standard represents a very sophisticated construction accounting axioms based on the approximation of the public sector to the private sector in the accounting consolidation field. The aim of this article is an identification and subsequent comparison of methodological elements in the consolidated group definition of public sector in the Czech and Slovak national legislative amendments in the context of IPSAS 35.

The aim of the contribution is to identify and characterize the requirements for keeping information databases of simple accounting and tax records in 2016. The analysis and comparison methods made it possible to formulate the findings and conclusions. Both databases have gone through the stages of development, stagnation and reduction since they were introduced into the Czech legislation. Simple accounting was initially a part of the national accounting system. Its abolition from 2004 onwards was one of the consequences of the accession of the Czech Republic to the European Union. By being restored in 2016, simple accounting did not return to the position of an accounting system. It is intended for an accounting entity which is not VAT registered, whose total income does not exceed CZK 3 million, the value of its assets does not exceed CZK 3 million, and it must be one of the enumerated non-profit organizations. Tax records became a part of the Czech legislation in 2004, when they replaced simple accounting for natural persons. Tax records are intended only for natural person entrepreneurs, who are not accounting entities. For small non-profit organizations, an information database was created, not a fully-fledged accounting system, as the name might suggest. The newly arranged structure of accounting decreases its reliability since it is missing complex information. If simple accounting is to be retained, it is necessary to add duties, so that it is unequivocally differentiated from tax records.

The article deals with the extent of using of accrual based financial reporting in public sector of EU member states. The extent is expressed by the number of member states on the one hand and monetarily through budgetary expenditure on the other hand. Besides, the article describes the current attitude and actions of European institutions to introduce the accrual basis in the public sector at EU level. At the same time the article discusses the specific possibilities of implementation of accrual based accounting with the emphasis on introducing the principles based on International Public Sector Standards (IPSAS).

In the introduction, the article compares the legislation for foundations and foundation funds according to the law on foundations and foundation funds and the new Civil Code. The paper focuses mainly on the legislative changes in the field of auditing of foundations and foundation funds and on reporting of administrative costs in the annual reports. As far as the article is based on the empirical data of the beneficiaries of contributions from foundation investment fund, the foundation investment fund is also mentioned, and its role in financing of the foundations and foundation founds is described. The article comments on important areas of transparent management that are publication of annual reports and financial statements, restriction and control of administrative costs, publication of auditor's rewards and audit reports. Individual parts of the paper draw attention to the deficiencies in information reported.

Control activities are used by managers in all levels of management decision like some feedback. The purpose of this activity is to get an objective picture of the reality-driven, and the fulfillment of the planned objectives and level of implementation of decisions taken. The control system in the company is an assembly of control activities, which are inter-connected, control system does not represent a diverse list of individual controls. This article analyzes the data that were collected in the form of a questionnaire, focusing on the internal control system in the procurement departments in companies, which are active in the Czech Republic.

The article describes the financial records system, which was legal accounting system in Czechoslovakia according to available sources during the period 1953 - 1965 (its implementation was carried out from 1951). The article seeks identical and different elements with today's accounting system, while trying to rehabilitate that period, at least in terms of the accounting system. The aim of this article is an introduction into one of the previously used accounting systems. The used method is a critical analysis of the law and logic offpf the accounting system of the time (based on searches from available sources, esp. contemporary trade press). The text offers theoretical foundations based on former legal standards and also a look at the practical part of an accounting system - accounting as such.

The aim of this article is to find a multicriterial indicator of financial health of municipalities. Such an indicator should meet the need for a robustness and complexity to cover all the significant areas of activities of municipalities. It should be also understandable for key users of the information on financial situation of a municipality - for its citizens. This concept of its construction has been made using a literature search method in this field since 1960s and synthesis of its findings into 6 basic dimensions of such an indicator. Each of this 6 dimensions should allow a drill-down approach to get 2 - 3 partial aspects of that dimension. Also these should be evaluated separately.

Performance measurement is an integral part of performance management and its primary role is an information function. Performance measurement system has an impact on the motivation of individuals as well. By linking performance measures and incentive system the motivation function is strengthen. This paper analyses essential approaches that justify or disapprove the positive impact of incentives on the motivation and performance of individuals.

This paper focuses on the disclosure requirements relating to associates in the financial statements of the investor. The issue is addressed under the International Financial Reporting Standards (IFRS). The introductory section briefly discusses the equity method, which is followed by a chapter dealing with the disclosure of information relating to associates in the financial statements. This chapter compares the requirements of the newly issued IFRS 12 with the original IAS 28. The last part is devoted to an analysis of disclosed information relating to associates in the financial statements of companies that are listed on the Prague Stock Exchange.

General business law and accounting legislation in the Czech Republic in the regulation of transaction with companies' implicit ownership independence of the participating units. The result is that for transactions with independent and related entities are applied the same rules, even in valuation in financial accounting. In the accounting newly connected or distributed enterprises gets fictitious values with no factual basis.

The target of this article is the comparison of accounting approaches to recognition, measurement, presentation and disclosure of revenues from contracts with costumers. Primarily, the approach of the new standard IFRS 15 Revenue from Contracts with Costumers is compared to standards which regulated this area before the adoption of this standard - namely IAS 18 Revenues and IAS 11 Construction Contracts. The significant benefit of IFRS 15 is the requirement for decomposition of transaction price on particular performance obligations, which are derived from the contract and the recognition of the revenue when a performance obligation is satisfied. The contribution of IFRS 15 is also the restriction on the use of the percentage of completion method (respectively input method).

The paper deals with preparation of consolidated financial statements by the group with cyclic interests among three separate entities that constitute this group. The paper is focused on potential difficulties in reporting of consolidated equity and interests (shares) that were issued within the group and are in full or partly held by the group. The paper responses to the next fundamental questions: What is the amount of consolidated equity and what is the correct way to display these intra-group interests (shares) issued and hold by one of the separate entities included in the group. Effects of proposed solution are demonstrated in illustrative example.

Referring to the Convergence Project of IASB and FASB, the paper focuses on an up-to-date issue, whether it is desirable to endeavour for a single global system of financial reporting standards. Albeit a full convergence is achievable both theoretically and practically, economic theory, analytical modelling and empirical accounting studies show that potential benefits of a single global system are lower than its costs. The main restriction on further convergence stems from the variety of informational needs by users of financial statements. To meet this changing demand, information strategies of preparers have to be flexible. One-size-fits-all approach to standard setting undermines the potential of standard setters to comply with the requirements both from users and companies. The quality of financial reporting standards can be only assured if standard setters are exposed to a competition.

This paper is focused on identification of publication periods of Účetní listy, the first accounting journal in Czech language. Analysis of all published 40 volumes (i.e. 1.174 articles) comprises both bibliographic and content sections. There were recognized following periods: Period of Pazourek's Účetní listy (and Archiv), period of Účetní listy edited by Fuksa and period of Podnikové početnictví. Pazourek's period (1900-1914) is characterized by almost exclusively authorship of Pazourek, by prevalence of articles focused on accounting. Fuksa's period (1933-45) represents prevalence of tax oriented articles Podnikové početnictví period (1946-49) is characterized by return to the articles on accounting topic. There was identified also transitional period between Pazourek's and Fuksa's periods (1923-33) where were combined the characteristics of both mentioned periods.

The article deals with the quality of accounting data for business management. It has been suggested 12 the most important criterions that affect the quality of financial accounting data. These main criterions were further subdivided into three groups according to their mutual relation. Criterions within mentioned groups were evaluated by experts in order to determine their weights. For calculating the weightings of the particular criterions was used AHP method. Subsequently was proposed a rating scale for each criterion. The result is an integrated criterion (multicriteria evaluation model) for assessment the quality of accounting data for financial accounting. The evaluation was carried out on a sample of Czech firms with similar characteristics.

The main reason for the existence of this standard is to ensure that an entity to disclose in its financial statements all relevant information about related parties. The reporting entity should point out "the possibility that its financial position and profit or loss is affected by the existence of related parties and transactions and outstanding balances, including commitments, with such parties." This article analyzes the published annual reports on the CNB website. The research is divided into banking and non-banking sector, where for each sector were three research questions. Finally, we can state that the requirement of IAS 24 disclosures under this standard was implemented fairly consistently for most of the companies reviewed over the period.

This article is focused on the process of implementation of due diligence. It goal is to define briefly general issue and describe in detail basic points of the screening. The basic part of the article is aimed to key points of the process of due diligence and notify steps which should be paid to attention. Because of the Czech written literature and articles don´t pay such an attention to adjustments, which are performing in financial statements and have an impact to transaction price negotiation and exposure of the risks, the article describe adjustments of balance sheet items.

To identify errors, fraud and creative accounting can be used several groups of instruments, ranging from methods based on legislation, ethics, to mathematical models. In this paper, we bring a draft of the quick detection model Q-DMFCA (Quick Detection Model Flow Cost Accounting). It is based on environmental accounting, using its records and consists of balances: material as a basic; in another financial balance and legal. The model was applied in two enterprises, there were evaluated the strengths and weaknesses of the proposed model. The further processing should be focused on the impact on sales margin, comparison to other models and audit options in this case and in Farm Accounting Date work as well.

For the effective management of a company, it is necessary to choose the right performance measures in order to influence the behavior of managers and employees towards the fulfillment of company´s strategic objectives and goals. Basic logical relations of decomposition of economic effectiveness measures and causal relations of value-creation process are taken into account in creating business performance measurement and management system. While logical relations of financial measures create the framework of performance management, causal relations of value-creation process make the factual base. Only by linking financial results and non-financial causes it is possible to explain, analyze and influence the value-creation process. By discovering the links between causes and effects it is possible to improve decision-making, communication and increase the level of knowledge.

The article is a discussion to the Libby and Brown's article: Financial Statement Disaggregation Decisions and Auditors' Tolerance for Misstatement. The first part of the article describes the original research of the authors, including theoretical base, experiment and its conditions and results of the research. The second part presents the strengths and weaknesses of the article and offers way for future improvement. The last part adopts the results of the research on the Principal - Agent Theory in the assurance services.

The legislated Accounting principles modernizing act, abbreviated BilMoG, caused a fundamental accounting reform in Germany. The most important international accounting standards were implemented into elsewise conservative accounting rules. Due to fact the main user of GAAP in Central Europe is SME, the description and analysis of IFRS's implementation into German GAAP seems to be profitable for SME's financial statement informative value and also for their competitiveness. Major receiver of SME's financial statement is not the institutional investor but financing bank and other creditor. Continuance of prudence principle after partly IFRS adoption is fixed.

The paper outlines the influence and impact of IFRS on accounting regulation in Czech Republic. The core of the paper is comparison of IFRS due process with legislative process of developing the Czech accounting legislation. The comparison of both of the processes enables to identify the weaknesses of Czech due process and provides specific recommendations for its improvement and increase efficiency. From the perspective of nature of accounting regulation the delegation of certain part of the developing accounting rules from the state to the accounting profession is important especially to strengthen the quality, understanding and acceptance of accounting rules, which can be effectively ensured through the due process different from that legislative. Inspiration can be found in the IFRS due process.

This paper deals with achieving hedge accounting for portfolio of assets and liabilities. Furthermore, provides brief comparison between currently effective hedge accounting rules embodied in IAS 39 and forthcoming standard IFRS 9. The aim of presented paper is to highlight possible linkage between hedge accounting rules and earnings management, moreover, shows how might be risk management strategy of the firm adjusted in order to achieve hedge accounting. The paper also provides small review of relevant research made in area of earnings management and derivatives accounting.

The article deals with transition from consolidated financial statements reported by proportionate consolidation method to these reported by equity method. IFRS 11 Joint Arrangements that fully superseded IAS 31 Interests in Joint Ventures become effective for financial statements for annual periods beginning on or after 1 January 2013. IFRS 11 doesn't enable to use both alternative methods, i.e. proportionate consolidation and equity method. This standard allows only equity method for accounting for joint control over joint venture. Venturers that had prepared financial statements by proportionate consolidation method to that date must apply equity method for financial reporting now. The aim of this paper is to present application guidance of transition from proportionate consolidation to equity method according to requirements of IFRS 11 and to refer to specific problems relating to this transition.

Czech accounting legislature defines regular, extraordinary and interim financial statements. Interim financial statements are important information source for management purposes, however for extraordinary situations there is necessary to prepare extraordinary financial statements. The main purpose of presented financial statements (regular, extraordinary, or interim) is to provide necessary information for external users. For this reason there is necessary to provide true and fair view within these statements. Upon bankruptcy proceedings this rule cannot be expected as going concern rule is broken.

After recodification Czech law there has been problem in commercial and accounting law with using accounting purchase method and acquisition method. Too in one's behalf transformation - reorganization is in commercial law and in accounting norms used purchase method and acquisition method. Starting balance sheet successional corporation doesn't need to then fair and true view financial situation. Starting balance sheet then embodies overvalue assets and overvalue shareholder´s capital.

Financial statements display the financial effects of transactions and other events by aggregating them into groups which have common characteristics. These broad groups are called the elements (building blocks) of financial statements. These elements are a base for recording, classifying and grouping financial data. Financial statements structured by these elements provide users with relevant information. Determination of these building blocks and their definitions for general purpose financial reporting by public sector entities are characterized by some particularities. Whereas definitions of assets, liabilities, revenues and expenses for public sector financial reporting are simile to these for business financial reporting, there are some important differences between both sectors. The most important peculiarities of determination of the elements of financial statements of public sector entities are: capacity of asset in the form of service potential and economic benefit, and need for reporting of deferred inflows and deferred outflows in the financial statements.

The paper concerns models of profit and loss measurement in accordance with various approaches to revenue definition and recognition. First part defines different models as a result of a theoretical experiment, regardless postulates and axioms applied in any economic disciplines. It aims to show - without any prepossessions - diversity of concepts that can be used for profit measurement. Second part deals with selected application problems of general models of revenues.

The paper focuses on critical points of the decision usefulness approach to accounting. The decision usefulness approach may work under normal economic conditions for relatively uncomplicated spheres of financial reporting. However, under extreme conditions and/or for controversial issues, the standards setters may succumb to the lobby pressure exercised by the preparers of financial statements. A wide range of users, who may flourish from accounting information, is dispersed and thus they may lack willingness to pursuit benefits from new regulation. Contrariwise, companies are relatively homogeneous and small in number, so they have sufficient incentives to influence the outcome of standard-setting process. Companies' eagerness to pressure on standard setters increases, if new regulation is expected to impact the presentation of financial position and performance in financial statements significantly. The hypothesis of potential failure of decision usefulness approach is scrutinized on an example of the new joint IASB's and FASB'S standard on Revenue from Contracts with Customers using a critical analysis approach.

The article introduces the current Directive of the European Parliament and of the Council 2006/43 of 17 May 2006 on statutory audits of annual accounts and consolidated accounts and the Regulation of the European Parliament and the Council N. 537/2014 of 16 April 2014 on specific requirements regarding statutory audit of the public interest. N. 537/2014 Regulation should enter into force on 16 June 2016 Both standards are expressing increased interest of the European Union on the issue of the audit and in particular the audit of public interest entities.

One of many options how to solve debtor´s decline in Czech Republic is to proclaim bankruptcy. This option is closely related with converting all company assets into cash and using these funds to relatively satisfy all creditor´s claims. This article deals with using most appropriate methods of the company´s assets valuation in bankruptcy, furthermore it deals with reflection of changes in asset´s valuation into company´s accounting and bookkeeping during bankruptcy. To estimate the value of the asset, which is determined to be sold only during irregular conditions, is needed to consider all significant and determining factors if that is possible. When this is not accomplished, the real revenue out of monetization will significantly vary from prerequisites and expectations of creditors will not be fulfilled. This unfavorable situation can even influence their future financial position. During examining this issue many contradictions have been found in the legislation, specifically in accountancy act and in insolvency act. Probable reasons and the outline of solutions about these factual differences is described in this article.

The article deals with new directive of European Parliament and Commission which has been approved on June 26th 2013 and regulates annual financial statements and consolidated financial statements. Member countries of the EU are obliged to adapt their domestic legal and administrative regulation to the framework and content of the EU Directive. The article examines conditions of such adaptation, compares current practice in the CR with the aims of the Directive and identifies the differences between them. The article comes to the conclusion that most of the domestic regulatory items correspond to those ones suggested by the EU Directive.

Cross-border mergers are regulated in directives of the European Union. The aim of the Directive is to eliminate obstacles to the free movement of capital between Member States. Despite this effort, cross-border mergers rarely used. The reason for this may be the difference in the accounting and tax treatment between countries. At present, the most common cross-border mergers are the mergers between Czech and Slovak companies. The paper analyzes the accounting and tax implications of mergers in the Slovak Republic. Attention is paid to the differences in approach to the reporting of goodwill and the option for taxation of the income tax differences between the carrying amount and fair value of the assets transferred to the acquiring company.

The article deals with the principal-agent theory and its application on provision of the assurance services. It describes influence which the principal-agent theory might have on the quality of information provided by the assurance services. The article defines stakeholders and shareholders of a company and their role in relation to provision of the assurance services, and then briefly presents the principal-agent theory. The influence of the principal-agent theory on the assurance services is ultimately studied in two ways, based on whether the subject who ordered the service is the main user of the provided information, or not. The agency costs are analyzed taking into account the amount of materiality and the amount of differences which are mentioned in management letter.

Definition of control and join-control changed during last years in both Czech accounting legislation and International Financial Reporting Standards. This paper deals with character of these changes. This paper also includes comparison of current treatment of control and join-control according to the Czech legislation and according to IFRS. Illustrative examples and cases indicate critical points where are found the substantial differences between Act on Business Corporations as amended with the Czech accounting legislation and IFRS 10 and IFRS 11 respectively. This paper also collates definition of control according to the Act on Business Corporations with definition of control according to the Commercial Code.

For accounting, but also for other economic and legal disciplines is important to define the basic unit in business and in related areas of accounting, financial management, valuation, determination of general legal frameworks and regulation of business. Practice and theory of evolution came to a Company. The Company is perceived as a complex relatively independent economic unit. Czech civil and commercial law of 2014 introduced the term Plant. Accounting standards, respectively and other standards are mechanically adjusting. Recodification of the term reflects the currently applicable civil and commercial law. The term Company (Business, enterprise), as a general and factual descriptive term, can not be considered incorrect term and should not be mechanically replaced the term plant.

In case of negative amount of total equity can occur phenomenon 'negative amount of investment' in application of equity method, in its developed as well as undeveloped form. 'Negative investment' doesn't comply with definition of asset in internationally respected standards of financial reporting (e.g. Conceptual Framework of IFRS). It is possible to recognize 'negative investment' as liability only to the extent that the investor has incurred obligations due to negative equity of the associate or joint venture. The equity method is applicable not only for ordinary shares but also for other parts of the net investment in the entity. The method is applied to components of the equity's net investment sequentially according to reverse order of their seniority and by the share of investor on the particular component of the net investment. There are inconsistencies while using combination of equity method and impairment loss accounting due to sequential application of equity method on the components of the net investment and due to specific rules for impairment of goodwill in equity method according to IAS 28.

Traditionally, management and financial accounting were two relatively independent information systems. In the transition countries, financial reporting is heavily influenced by tax legislation, which impairs the usefulness of financial statements for external users. Entities are then forced to remove those lacks in management accounting in a great extent to obtain useful information for the internal decision-making. A separate coexistence of management and financial accounting is then inevitable. The IFRS adoption has increased the quality of financial reporting in transitional countries, despite significant implementation costs. To lower the cost burden, the IFRS are becoming the leading principles of management accounting. The paper assumes that the IFRS may be a special driver for the convergence of financial and management accounting in transitional countries and supports this assumption by empirical questionnaire survey among selected Czech companies.

Planning and budgeting is a key controlling tool for most of the organizations, including notfor- profit ones. The paper focuses on specifics of the budgeting process, particularly the phase of drawing up the budget, in non-governmental organizations (NGOs). Based on the research, the paper identifies main types of budgeting process reflecting NGOs' financing models, and controlling tools used in planning and budget control.

Compared to business organizations, not-for-profit non-governmental organizations consider far more factors when setting the price of their service than just expected supply and demand for. The paper focuses on both the factors which influence the price setting process and which are specific for not-for-profit sector and whether management accounting knowledge can make the process of price setting more rationale and evidence-based. Based on observation of many of NGOs, the factors can be derived and generalized - they are: insufficient knowledge of real cost structure of organizations' activities, legislative restrictions and/or other limitations the organizations voluntarily impose mainly due to ethical considerations about availability of their service to prospective clients.

The insufficient use of information provided by management accounting is one of the major difficulties causing the problems threatening the business practice in these days. If you can afford to neglect the use of instruments of this accounting in the time of economic boom in recent years, at present, with the recession, the absence of these instruments in the internal management necessarily leads to quandary of how to deal with growing tensions between the amount of available economic resources in one hand and the size of the economic profit accredited by the external surrounding entity, on the other. Of course, it is not possible to argue that only the unwillingness of business practice to procure rational information for the original managerial decision-making is behind a relatively high percentage of failures, though, the one of the reasons, it most definitely is.

Due to difficult conditions having effect on internal bank operations, at present in form of payment institution only, which they occurred as a result of stricter stipulations contained in Act no. 284/2009 Coll., the Law of Payments, is now appearing a new way to use this internal value management tool back to its original purpose, which is the strengthening the financial discipline and responsibility in the direction of internal departments in a decentralized organizational and economic structure.

This paper analyses relation between strategic management accounting and strategic management. Strategic management accounting should provide information support to strategic management. But most definition of management accounting includes also elements of strategic management. Often strategic management accounting and strategic management diffuse very strongly.

The article elaborates the possibilities of practical usage of a traditional model of Customer profitability analysis and its extension by costs of capital connected with a shorter or longer interval receivables´ coverage or with additional sources linked in inventories required by a concrete customer need. On a base of empirical research it investigates correlations between three groups of variables - between maturity of receivables and customers´ profitability, between unit price and product category and between level of customers´ turnover and interval of maturity rendered to these customers. In empirical part it concludes the investigated company takes into consideration in relations to its customer portfolio their profitability as well as contribution to its financial position. In closing general evaluation of the whole project it concludes that - despite the Customer Profitability Analysis information contribution importance - its outcomes cannot be perceived unambiguously - for example by this way a company should dispose customers whose contribution to profitability and to financial position is low or even negative. Also in these cases it is necessary to evaluate the customers´ benefit to a company development in the context of strategic horizon which can be apparent better from the subsequent Customer Life Time Value model.

Firms listed in Business Register are requested to publish their financial statements till the end of the consequent period at the latest in documents collection of the Register. This legal requirement follows the EU legislation. The main purpose is to protect third parties when negotiating business contracts. However, based on our research, majority of Czech firms fail in this requirement. Paper also focuses on the researching of insolvent firms and discusses fulfilling of the presenting obligation.

There are many views on how to report leasing transactions in the financial statements. As part of the joint leasing project, IASB and FASB are trying to come up with the new standard leasing already for seven years. The aim of this paper is to assess the impact of the proposed Exposure Draft on lessees. The paper tackles the controversial areas as well as benefits of the new proposal. Individual contributions of the lessees are thoroughly examined and compared to those from auditors and to the Draft. Hopefully the wide criticism of the first Exposure Draft would have a positive impact on the second Exposure Draft, and that the second Exposure Draft would be finally accepted.

Mergers and spin-offs encounter with a problem of recognizing the transaction as actual purchase. From the commercial law perspective the transaction is always considered as actual purchase while the accounting search for real basis of the case. When the subjects of the transaction are not independent we cannot consider such transaction as real purchase - rather reorganization. Reorganization solely does not justify revaluation of net assets nor the business as a whole.

The aim of the Beyond Budgeting concept is to recognize mutual interconnections and relations of budgeting process as a whole, to design the management model of a company operating in turbulent market environment and to specify the principles, rules and tools of the model. The Beyond Budgeting is the management model which emphasizes strategic goal setting, rolling budgeting and performance management based on both financial and nonfinancial indicators and on its relative analysis and evaluation. Budgets are recognized as a starting point of the whole management process improvement. Integrating budgets with the real management system enables to attract the managers' interest in budgets and to understand the linkage of budgets to the entire management system, i.e. to comprehend the integrating function of budgets.

This paper examines the importance of the position and role of interim financial statements in the Czech financial reporting.The paper created a proposal for the creation of a new Czech Accounting Standard - "Interim Financial Statements". Its purpose is both to unify the existing fragmented legislation issues examined under the Czech law and also to define the essential terms of the lack of interim financial statements. This is the definition of the interim reporting period, the obligation of regular interim financial statements that would have been available if the practical application induced respective business combination. An obvious and essential part of the definition would be the minimum content of interim financial statements, the accounting policies used in the preparation and valuation methods of individual items.

The article highlights differences in evolution of the terms "management accounting" and "controllership" in English- and German-speaking countries. The comparison shows that despite the common origin of both terms in controllers' functions in the US companies from the second half of the 19th century, later advancement in English-speaking world tended to prefer the term "management accounting" as a provider of information for the financial management. As opposed to the "management accounting", the term "controllership" was adopted in Germanic countries. It was the result of discussions whether or not there is an independent branch of German business administration (Betriebswirtschaftslehre). The presented search concludes that both analyzed terms are basically interchangeable and both should be communicated to the students based on their historical and territorial specifics.

Although the usage of the equity method in the group where the investor exerts a significant influence becomes the standard procedure for the preparation of financial statements for a group, there are still many problems that are not addressed by the national legislation or in international standards as which IFRS may be considered. In the paper, a simple illustrative example describes various solutions of triangular links between the economic units in the group. The fundamental problem in this context appears to be the calculation of the relative (percentage) proportion of ownership interest and, consequently, also the difference between the value of the equity investments (generally valued at cost) and the ownership share of net assets of associates valued at the acquisition date fair value. For the recognition of this difference, it is necessary to take into account not only the amount but also the specific national or international (eg. IFRS) treatment. From the above it follows that different variants of the solution of the group described in the paper might have a significant impact on the final form and explanatory power of the prepared financial statements.

The Czech National Accounting Board, an independent national accounting body that was established by the initiative of Czech accountants, the Chamber of Auditors, academics from the University of Economics in Prague, and the Chamber of Tax Advisors in 1999 is subject of the article. The main goal of the Board is to support the development of accountancy toward an independent respected profession in the Czech Republic and accounting methodology. This goal is realized through the process of issuing Interpretations to consider accounting issues in the Czech legislation that are likely to receive divergent or unacceptable treatment in the absence of authoritative guidance. Research shows that issuing of Interpretations has impact on accounting practice and profession (e.g. majority of tax advisors knows Interpretations and use them). In spite of the fact, that Interpretations are not an inner part of accounting regulatory system in the Czech Republic, they represent professional opinion of highly respected members of the Czech National Accounting Board and therefore they are accepted by practice.

Accounting as a branch of economic science and research is not in the center of attention of economists, whether they are focused macroeconomic or Business Administration (microeconomic). Whoever, it is necessary to underline the crucial importance of accounting for the formation of a number of findings from the field of business management, e. g. cost, efficiency and economy of production. Accounting is a branch of science developed in the world and around us in the last hundred and fifty years and represents today an accepted part of the microeconomic oriented research and the formation of some theoretical conclusions. Department of Accounting, University of Economics in Prague since the inception of the school - it is from then until now, part of it - fully engaged in growing doctrinal discipline while trying to provide students currently focused specialized teaching in accounting for the needs of their practice. Accounting system in the Czech Republic and the Slovakia in the last sixty years have passed so varied developments that maybe their mapping represents a contribution to the formation of the theory of functions of account and accounting systems, designed as a system focused on the needs of the state of the economy or the needs of the healthy development of a profitable company as elements of this economy.

Relating to changes in global business environment the requirements on professional competences of controller were changed. This paper summarized the main conclusions of empirical research in Czech Republic. The research focuses on position of controller in organization structure, responsibility, functions and activities of controllers.

There are available only two theoretical concepts of consolidation of cash flow statement: concept of pure consolidation and investment concept. The principal criterion for the classification of concepts of consolidated cash flow statement is the way of involvement of gross cash outflow and gross cash inflow from the acquisition of subsidiary, or from its disposal respectively. Good understanding of theoretical concepts of consolidation of cash flow statement is essential for correct interpretation of consolidated figures of cash flow statements. However the investment concept only can present relevant information about the cash flows. IAS 7 and other advanced standard on cash flow statement are based on investment concept.

While providing the auditing service the auditors face often the opinion of the users of the audited financial statements which are not quite correct, or often completely erroneous. Accounting units in some cases expect from auditors services which they cannot provide to them since it would have been against the professional ethics. The article presents several cases of such errors, explains their circumstances and refers to corresponding legal regulations or auditing standards.

The aim of the article is to describe recent tendencies in information support of capacity utilization with the main stress to this information usage in the economy and efficiency management, and to document how to prepare and apply this information in the times of recession or crisis when business environment is characteristic by high capacities which are not utilized enough. The article concludes the principle aim of the efficiency management should be an effort of profit stabilization in such conditions. Management of the stabilization factors, especially an effort to assure inter-relation between capacity utilization and fixed costs level, should be supported in the product oriented management by a retrograde costing scheme, which is based on variable costing concept with strong stress on object of analysis contribution margin and which gives detailed information about the structure of fixed costs - classified in the first stage according to their cause relation to object of analysis and in the second stage into sunk and avoidable parts, allocated to object of analysis in the pre-condition of a standard capacity utilization.

This contribution focuses on the current issues related to converting accounting data for tax purposes. The topic was selected with consideration for the needs of business practice and the absence of findings in the examined area, which relates to ensuring relevant data for tax purposes for businesses reporting their accounting data for statutory purposes based on the International Financial Reporting Standards (IFRS) in the economic and legal environment of the Czech Republic. The aim of the contribution is to present a proposed method of converting accounting data for tax purposes in relation to long-term tangible property. For the purpose of fulfillment of the goal, an extensive comparison of affected accounting systems and a content analysis of the obtained information were performed. The proposed conversion method itself is a synthesis of findings from content analyses and the results of an evaluation of technical performance of conversion using a method involving multi-criteria evaluation of different variants. The result is a generally valid approach for the conversion of accounting data reported based on the International Financial Reporting Standards to data reported based on Czech accounting legislation for tax purposes.

The aim of the financial accounting is to provide not only the reliable data for its users about the performance of the company in the past, but also for realization of the right decisions in the future. This contribution presents the main conclusions of the questionnaire research concerning the problem aspects which prevent the accounting statements made according to the Czech law regulations from having better information ability with the possibility to replace the problem aspects by the solutions according IAS/IFRS or IAS/IFRS for SME. The aspects of the accounting statements, identification of the accounting operations, valuation and further realities concerning the accounting according to the Czech accounting standards were analyzed.

Accounting has been identified as one of the key areas in which administrative burdens for companies within the European Union may be reduced. As the size criteria for microenterprises in the proposed new Directive, replacing the Fourth and Seventh EC Directive, may be too high for accounting purposes, a sub-group of micro-enterprises, so-called "microentities", were introduced to cover companies with lower size criteria for balance sheet total and net turnover than those laid down for micro-enterprises. Regulatory requirements are proposed in EC Directive for micro-enterprises issued in March 2012. Member States should take into account the specific conditions and needs of their own markets when making decisions about how or whether to implement a micro-entity regime.

The article deals with the accounting view of deferred tax liabilities and deferred tax assets in companies that have carried out a merger or division. Temporary differences arise when the tax bases of the identifiable assets acquired and liabilities assumed are not affected by the business combination or are affected differently. For example, when the carrying amount of an asset is increased to fair value but the tax base of the asset remains at cost to the previous owner, a taxable temporary difference arises which results in a deferred tax liability The regulation of accounting for deferred tax in the Czech accounting legislation historically based on IAS 12. The Czech legislators, however, made implementation very briefly and inadequately. Czech rules does not give answers to many questions that arise in complex transactions, such as the revaluation of assets due to merger. The article discusses the first recognition of deferred tax, calculation method, the method of accounting, the procedure in the case of goodwill.

Provisions are accounting items which depends on the estimations. Due to the estimations, the amount of provisions depends on the framework of estimations. The article presents methods of estimations and disclosures rules of both ČÚS and IAS/IFRS. The second part of the article is an empirical study which presents results of disclosure of provisions in Czech Republic according to the IAS/IFRS. The article presents the results of research of disclosure and mistakes in disclosure and meditates on possible inspiration of disclosure by Czech accounting standards. The disclosure and inspiration by ČÚS is measured by assessment of partial areas of disclosure.

Among the most frequent transactions realized between related entities included in a group are sales of goods, provision of services, lending, sales of securities and other financial assets. Consolidation adjustments leading to eliminations of these transactions realized e.g. between parent and subsidiary, between subsidiaries, often leads in the different presentation of related items in consolidated financial statements in comparison of separate financial statements of entities that realized the transaction. Eliminations of selected transactions and their effect on the information presented in consolidated financial statements in comparison of individual financial statements are explicated via particular illustrative examples in this paper. These examples are based on assumption of control and therefore on the full consolidation method used for preparation of financial statements.

Good understanding of theoretical concepts of consolidation of financial statements is essential for correct interpretation of consolidated figures. There are seven principal concepts of consolidated accounts indicated in this paper, from proprietary concepts, through parent entity concepts to economic entity concepts. The principal criterion for the classification of indicated concepts of consolidated accounts are: extent of net assets of subsidiary added to the net assets of parent entity; extent and character of acquisition difference; presentation of noncontrolling interests; measurement of net assets of subsidiary at the date of acquisition. Current IFRS (IFRS 3, IAS 27 and IFRS 10) are based on economic entity concept. Current Czech accounting standards are based on limited economic entity concept.

Accounting and business regulation for the transformation of commercial companies over the last twenty years has crystallized into five developmental stages. By analyzing and comparing the legal and accounting concepts, we can say that the last stage is characterized by an extensive choice of laws in terms of business regulation. The major, on-going problem of the legal concept is that it does not differentiate transformations involving the creation of a new ownership structure within a legal successor, where the legal successor is materially a new owner - acquirer, from those transformations in which a new structure does not arise, i.e., those that represent merely a restructuring while maintaining the original ownership structure. While the legal and accounting regulations up to the fourth stage generally addressed transformations as purchases, business and accounting regulations in the fifth stage provides solutions mainly for transformation type restructuring. Highlighting postings based on the individual accounting transactions of the companies involved, especially if the unusual, socalled opening balance sheet method is applied, leads to a suppression of information links between the summary financial information from the financial statements prepared at the entry into the transformation and the summarized financial information in the form of an opening balance sheet of the legal successor.

Equity of a limited liability company or a joint stock company is mainly composed of contributions of shareholders, retained earnings or funds from revaluation of assets at fair value. The revaluation of assets and liabilities at fair value is substantial if the company has carried out a merger or a spin-off. The valuation of net assets in an expert opinion is important for the determination of the successor company registered capital. This valuation must be recorded in accounting and constitutes a rather complicated accounting issue. It enforces the concept of commercial law and accounting interconnection. Some discrepancies in accounting regulation may, however, result in the assets to be overestimated and the choice of a right procedure will be a challenging task for the accounting unit and its auditor.

One of main targets of each company is performance growth and thrifty approach to the life environment. It is evident that owners and managers need to have available information about environmental issues and their economic results in the social environment. That´s why the accounting system should be conformable to new information needs; it should cover the economic, environmental and social connections of business in the area of expenses/costs and incomes. It is necessary to work with the allocation of costs to responsibility centres, business activities and outputs for purposes of the right decision making of owners and managers. With the decision making of environmental issues it is not possible to omit the existence of externalities and their negative and positive results in the scopus of company sustainable development.

The paper points to sixtieth anniversary of the adoption of the statutory scheme so-called 'financial records' in Czechoslovakia in 1951. Characterizes the content of financial records and their challenges and points to a fundamental inadequacy of using the notion of inter exactly historically defined stretch of fifteen years, in which this form of accounting records was implement in the national economy.

This discussion refers to polemic of questions of possibility how to recognize accounting fraud. It's possible to agree if external auditor proceeds according to ISA's (international auditor's standards), he would disclose fraud. This conclusion is opportune completed with series of indicia, considerations and particular cases, which these make possible and support no always. Namely out of different areas, opinion also on the other side, including personal piece of knowledge in practice of companies.