Czech Financial and Accounting Journal, 2014 (vol. 2014), issue 4

Novinky v regulaci účetnictví a auditu v Evropské unii: novely zákonů o účetnictví a auditu v České republice

Ladislav Mejzlík

Český finanční a účetní časopis 2014(4):4-5 | DOI: 10.18267/j.cfuc.418  

Regulation of the Proprietary Trading by Banks with Investment Instruments

Petr Musílek

Český finanční a účetní časopis 2014(4):6-16 | DOI: 10.18267/j.cfuc.419  

This paper surveys the regulatory response to the global financial crisis with an emphasis on the regulation of the proprietary trading by banks with the speculative investment instruments. We discuss not only changes in the US regulation, but we also focus on the implementation of the Vickers rule in the Great Britain. The Dodd-Frank Act introduced quite promptly sensitive regulation of the proprietary trading by banks. Regulatory response to the global financial crisis changed significantly the regulatory-supervisory approach to the EU banks as well. However, the proposal new European directive on structural measures increasing the resistance of...

Czech Experience with Deflation

Jitka Koderová

Český finanční a účetní časopis 2014(4):17-30 | DOI: 10.18267/j.cfuc.420  

On 7th of November 2013 the Board of the Czech National Bank decided to start using the exchange rate CZK/EUR as an additional instrument for easing the monetary conditions in order to avoid the long-term undershooting of the inflation target. The aim of this paper is to contribute to the discussion on CNB Board´s resolution mentioned above showing that our country has a very bad experience with deflation. In the first part the deflation and its "good" and "bad" versions are defined. The second part deals with the Czechoslovak government´s effort to appreciate the currency, which leaded into deflation connected with economic recession. In the third...

Systemic Risk Indicator

Milan Šimáček

Český finanční a účetní časopis 2014(4):31-42 | DOI: 10.18267/j.cfuc.421  

The paper analyses the relationship between excessive credit growth and the development of systemic risk, which subsequently materializes into losses of banking sector credit portfolios. The systemic risk indicator captures the time dimension of systemic risk, and hence represents the function of an indicator of the development of endogenous risk and imbalances in the system. The systemic risk indicator is thus a suitable leading indicator for the identification of the materialization of the risk of financial stress. In the paper, the credit to GDP gap for the domestic as well as the foreign component is chosen as the most suitable variable for the...

What Framework Does Criminal Law Set for the Auditing Profession?

Jan Molín

Český finanční a účetní časopis 2014(4):43-56 | DOI: 10.18267/j.cfuc.422  

This paper deals with professional liability of auditors seen from the perspective of criminal law of the Czech Republic. The introductory part discusses the essentials of criminal liability, analyses the term "criminal act" and other issues, particularly "fault": not only from the perspective of criminal liability of natural persons, but also from the perspective of criminal liability of corporations. Special attention is dedicated to participation in crime. Another part of the paper focuses on actus reus of certain types of criminal acts relating to auditing profession, e.g. the fraudulent data misrepresentation or the crime of issuing a false certificate...

Transition from proportionate consolidation method to the equity method according to IFRS

Marie Zelenková

Český finanční a účetní časopis 2014(4):57-69 | DOI: 10.18267/j.cfuc.423  

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...

Analysis of the Capital Structure of Domestic Corporations Preceding a Bankruptcy

Tatiana Škerlíková

Český finanční a účetní časopis 2014(4):70-83 | DOI: 10.18267/j.cfuc.424  

The aim of this paper is on the issue of low returns in the Czech Republic to offer a new perspective. Article concerns the agency theory before the bankruptcy proceedings with regard to the specifics of Czech Republic. Given that bank lenders have better bargaining power in comparison with other classes of creditors, the view focuses on their activity while initiating bankruptcy. The article tries to estimate what percentage of insolvencies could be launched in the Czech Republic by bank lender based on the specific position of individual groups of debtors before insolvency proceedings. Bank lenders have stronger monitoring and enforcement means,...

Portfolio Hedging and Earnings Management

Jan Novotný

Český finanční a účetní časopis 2014(4):84-93 | DOI: 10.18267/j.cfuc.425  

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.

Role of Financial Accounting Standardization in Initial Public Offerings

Monika Janičíková

Český finanční a účetní časopis 2014(4):94-105 | DOI: 10.18267/j.cfuc.426  

The main role of accounting standardization is to provide uniform view on financial position of reporting company. The uniform reporting contributes to trustworthy image and understanding from investors and regulatory authorities. This article deals with information obligatory rules in the course of IPO. We focus on exchanges because they are those that use IFRS and US GAAP concepts in listing rules. Different approaches of exchanges are compared in listing rules of the most important exchanges (NYSE, NASDAQ, LSE and HKSE).

IFRS Due Process as an Inspiration for Legislative Process of Developing the Czech Accounting Legislation

Mariana Valášková

Český finanční a účetní časopis 2014(4):106-119 | DOI: 10.18267/j.cfuc.427  

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...

Czech Point of View of IFRS Adoption into German GAAP - Impact on SME's Financial Statement Informative Value

David Trytko

Český finanční a účetní časopis 2014(4):120-132 | DOI: 10.18267/j.cfuc.428  

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.

Evaluation of the Students' Business School Educational Results in Relation to Study of the IFRS: Empirical study

Kateřina Berková

Český finanční a účetní časopis 2014(4):133-148 | DOI: 10.18267/j.cfuc.429  

This paper informs about the results of empirical verification of the students´ pilot business schools groundwork for the study of the IFRS. This paper presents references of implementation IFRS into the subject Accounting at the secondary business schools depending on the requirement of the frame educational program. Base on the empirical research was found that for present there are not any assumptions for students´ understanding of the curriculum IFRS, which must be implemented into the curriculum of the secondary business schools. This paper has been focused on the recommendation for the quality of the permeability of the secondary education with...

Materiality and Principal - Agent Theory

Michal Bobek

Český finanční a účetní časopis 2014(4):149-156 | DOI: 10.18267/j.cfuc.430  

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.

Interlinked System of Business Performance Management Indicators

Jana Fibírová, Kateřina Knorová

Český finanční a účetní časopis 2014(4):157-165 | DOI: 10.18267/j.cfuc.431  

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...

Economic Development and Number of Business Entities

Barbora Menčlová

Český finanční a účetní časopis 2014(4):166-174 | DOI: 10.18267/j.cfuc.432  

The paper focuses on the development of the Czech economy and the economic entities in the Czech Republic in the years 1990 - 2012. The first, the descriptive part follows the analysis of the development of economic entities and their interdependence on selected macroeconomic quantities represented growth of GDP at constant prices and the General unemployment rate. Special emphasis is placed on the birth and the death of joint-stock companies and limited liability companies. A noticeable increase in the number of economic entities at the time of expansion or significant decrease in a time of recession is not statistically proven.