This study aims to examine the relationship between intellectual capital and profitability in the pre-COVID-19 period and its change during the pandemic, focusing on Slovak small and medium enterprises (SMEs). The novelty of this study is the analyses of the crisis period conducted on a sector level via linear mixed-effects models in a Central and Eastern European country. The data sample consisted of 24,351 Slovak small and medium enterprises. This study assumes a positive relationship between profitability and company size, age, capital employed efficiency, and structural and human capital efficiency during the pre-COVID-19 year. Companies with higher value-added intellectual coefficient (VAIC) scores achieved higher values of profitability in both return on assets (ROA) and return on equity (ROE). The results also show that structured capital and capital employed efficiencies negatively impacted company profitability during 2020. On a sector level, the pandemic hit the following sectors the most: tourism and gastronomy and gambling due to various restrictions and closures.

The aim of manuscript is to analyze and identify determinants of honest accounting errors leading to financial restatements based on data from SEC database and from annual reports. Reason for this study is that accounting errors are expensive for companies that need to change already published financial statements and have impact on company reputation and stock price. Most of authors focus on prediction of accounting frauds and financial restatements remain in the background of research. This study initially tests existing accounting fraud detection model of Beneish on a sample of 40 financial restatement companies over 10 years and develops two new pioneer prediction models, one based on linear discriminant analysis (LDA) and another based on logistic regression. In testing dataset, LDA model has achieved accuracy 70.96%, specificity 25.00% and sensitivity 79.83% and logistic regression model has achieved accuracy 62.22%, specificity 41.66% and sensitivity 66.67%, performance of both models is better than existing Beneish model or other studies in this field. Developed models can be widely used by both internal and external users of financial statements, who would like to determine if financial statements of analyzed company include accounting errors or not, thanks to easily interpretable results in equation form.

Research background: Since January 2013, pension fund management companies have had to establish at least two pension funds, one guaranteed bond fund, and at least one unguaranteed equity fund. This division has brought many changes in portfolios of pension funds in Slovakia. Currently, six pension funds management companies manage six bonds, six equity, five indexed and three mixed funds. Purpose of the article: The aim of this article is to monitor the composition of assets during 2009 and 2014 and describe relation between equity and mixed pension funds’ profit and components of assets they own. The results of this research contribute to a better understanding of the importance of certain types of financial assets owned by equity and mixed funds and their impact on pension funds’ profit. Last, but not least, this article helps to improve the legislative management of pension funds and their impact on macroeconomic situation in Slovakia, because pension funds are still concentrating higher and higher amount of financial assets from government bonds to companies’ stocks. Methods: This relation will be described by linear mixed-effects model with random effects of years and pension funds management companies. Random effects also help to identify the impact of changes during the period studied, and in case that profit is significantly different across the pension funds management companies Findings and Value added: The underlying model data will be chosen from annual balance sheets, income statements and notes of Slovakia-based equity and mixed funds during the period studied.

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Research background: Even though unintentional accounting errors leading to financial restatements look like less serious distortion of publicly available information, it has been shown that financial restatements impacts on financial markets are similar to intentional fraudulent activities. Unintentional accounting errors leading to financial restatements then affect value of company shares in the short run which negatively impacts all shareholders. Purpose of the article: The aim of this manuscript is to predict unintentional accounting errors leading to financial restatements based on information from financial statements of companies. The manuscript analysis if financial statements include sufficient information which would allow detection of unintentional accounting errors. Methods: Method of classification and regression trees (decision tree) and random forest have been used in this manuscript to fulfill the aim of this manuscript. Data sample has consisted of 400 items from financial statements of 80 selected international companies. The results of developed prediction models have been compared and explained based on their accuracy, sensitivity, specificity, precision and F1 score. Statistical relationship among variables has been tested by correlation analysis. Differences between the group of companies with and without unintentional accounting error have been tested by means of Kruskal-Wallis test. Differences among the models have been tested by Levene and T-tests. Findings & value added: The results of the analysis have provided evidence that it is possible to detect unintentional accounting errors with high levels of accuracy based on financial ratios (rather than the Beneish variables) and by application of random forest method (rather than classification and regression tree method).