The paper1develops and empirically tests a disclosure model for the fifty Czech joint-stock companies that were included in the 1993 Prague Stock Exchange Index. Independent variables are drawn from prior theoretical and empirical research concerning voluntary disclosure. Dependent variables are based on Czech laws and regulations concerning financial disclosures. Univariate analyses generally support the existence of the hypothesized relationships between extent of disclosure in annual reports and firm size, profitability performance, financial risk, and monitoring variables. Multivariate regressions explain about 25% of the variance in the extent of disclosure in annual reports. Statistically significant variables in the multiple regressions include type of auditor, number of employees, stock exchange listing status, and return on equity performance. The results provide initial insights into Czech managements' choices concerning financial reporting and suggest topics for additional research

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The paper draws on the organizational change literature in order to provide a theoretical framework for the post-Velvet Revolution changes in Czech accounting. The former system is modelled as an amalgam of interpretive schemes, design archetypes and subsystems. The former system is seen as coherent except in the area of audit. The points of change are economic and political disturbances which result in legal and institutional changes in accounting and auditing. In terms of the theory, these are the design archetypes of the new organization of accounting. Identifying ambiguities and contradictions, we argue that the new organization is on an unresolved excursion towards a new model. We also argue that although the change is of a second-order nature, it has been carried out with relatively little public discussion or participation.

As the economies in Central Europe have commenced their transformation from centrally planned to market-led economies, each country has implemented a new legal framework for accounting and auditing. This provides a unique opportunity to research the implementation of aspects of accounting and auditing well known to Western market economies into different economic contexts. In particular, it provides an opportunity to revisit the role of the independent audit. This paper contributes to the research on the developing of auditing in Central Europe by analysing the role of the audit in the Czech Republic. It covers aspects of both regulation and practice and, in order to gain more understanding of how the audit role is developing in the Czech Republic, focuses on three areas: influences on the Czech audit legislation; the position of the audit report and perceptions of the objectives of the audit in the Czech Republic. After a brief review of the published literature on accounting and audit in the Czech Republic, the paper studies some of the country's recent economic and legislative developments in relation to auditing. These developments are put into the context of auditing before and after the 'Velvet revolution' of 1989. The paper then concentrates on the influences on the development of Czech audit legislation by comparing aspects of the Czech audit legislation with the German and UK equivalents. This comparison highlights some anomalies in the Czech legislation. The Czech audit legislation is then put into the local context based on a review of the contents of the audit report and its publication with interviews among a selection of users and preparers about how the audit is perceived.