Abstract:The article stresses the consequences of simplifications implemented in the measurement process of goods produced that are of crucial importance to production engineers in SME. The authors show the variety of possibilities that might be used by financial employees together with probable outputs in terms of valuation distortions. Using the case study the authors emphasis the importance of close cooperation of production engineers with finance professionals as outputs of finance departments consist an important input for decision-making process of production managers. Furthermore, demonstrated deficiencies in terms of methods applicable in financial reporting for measurement of the value of goods produced indicate the need for incorporation more financial and non-financial data in the process of judgments about the final cost of goods produced as simplifications applied in SME distort financial information provided to production engineers.

The main objective of fi nancial statements is to give information. The diversity of interests and objectives of individual groups of users and creators of fi nancial statements presents the risk of manipulation of fi nancial statements in the context of true and fair view as defi ned in the national accounting legislation. The paper is concerned with the diff erent possibilities of detecting the manipulation of fi nancial statements in terms of the Czech Accounting Standards and IFRS. The paper analyzes the selected risk detection models of the manipulation of fi nancial statements using creative accounting methods, off -balance sheet fi nancing methods and accounting frauds in specifi c case studies of selected accounting unit in terms of Czech accounting standards. Based on the analysis and comparison of the results thereof, the paper presents and evaluates the alternatives of users of fi nancial statements to evaluate the risk of manipulation of fi nancial statements beyond the scope of a fair and true view. The evaluation further includes a comparison of uses of these models with respect to the International Financial Reporting Standards.

Small enterprises are exposed to new challenges in examining the impact of creative accounting on their financial statements, particularly when assessing ‘going concerned’ conditions and increasing the risk of fraud. The article aims to identify accounting errors and fraud risks made by accounting adjustments, thus distorting the true and fair presentation of financial statements. We aim to explore the risks of creative accounting based on the relationship between profit creation (EBT) and cash flow (CF) by applying the CFEBT risk triangle method. We analyze small enterprises operating mainly in the trade, processing, and construction industry to achieve this. The detected risks of accounting records were subsequently compared and evaluated in the selected branches of activities. Our research findings confirmed that M-score values were primarily negative for the monitored industries of small enterprises. The resulting values point to applying creative accounting methods – earning management, which pursues, in particular, tax optimization, and, on the other hand, the fulfilment of profitability criteria. A more profound analysis of selected accounting items and financial indicators confirmed more substantial differences between the trade and construction industries. Differences between the branches were found in one-half of the financial indicators and most of the 14 accounting items monitored. The accounting risks ascertained may be used as a tool for reducing the information asymmetry between authors of accounting records and users of reported accounting data and information. The detection and evaluation of risks of accounting errors and errors beyond the economic substance of reported data may considerably improve the quality of decision-making of internal and external users and is also used by persons authorized to conduct the administration and Corporate Governance for increasing the efficiency of enterprises’ internal control systems.

DRÁBKOVÁ ZITA. 2015. Analysis of Possibilities of Detectnig the Manipulation of Financial Statements in Terms of the IFRS and Czech Accounting Standards. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 63(6): 1859-1866. The main objective of fi nancial statements is to give information. The diversity of interests and objectives of individual groups of users and creators of fi nancial statements presents the risk of manipulation of fi nancial statements in the context of true and fair view as defi ned in the national accounting legislation. The paper is concerned with the diff erent possibilities of detecting the manipulation of fi nancial statements in terms of the Czech Accounting Standards and IFRS. The paper analyzes the selected risk detection models of the manipulation of fi nancial statements using creative accounting methods, off-balance sheet fi nancing methods and accounting frauds in specifi c case studies of selected accounting unit in terms of Czech accounting standards. Based on the analysis and comparison of the results thereof, the paper presents and evaluates the alternatives of users of fi nancial statements to evaluate the risk of manipulation of fi nancial statements beyond the scope of a fair and true view. The evaluation further includes a comparison of uses of these models with respect to the International Financial Reporting Standards.

The objective of the present contribution is to evaluate the risk of the impact of accounting errors and frauds on reported accounting records on the basis of the CFEBT risk triangle of accounting errors and frauds. The analysis is conducted in the framework of a case study that examines a selected accounting unit predominantly operating in trade, with respect to financial statements reported during the years 2011–2015. The evaluation of the risk of impacts of accounting errors and frauds forms a part of one of the three vertices of the CFEBT risk triangle. The contribution presents results of the CFEBT approach at three levels of the M‑score and analyses significant discrepancies between the generation of earnings and increase in cash flow during the observed periods. The CFEBT risk triangle was designed as a tool for detection, evaluation and management of the risk of accounting errors and frauds in circumstances of the Czech accounting standards and International Financial Reporting Standards (IFRS). The essential aim of the triangle is to reduce information asymmetry between authors and users of accounting records, or, in other words, to increase the quality of available information with respect to decision‑making on the basis of available accounting information.