Thursday, 28 March 2019: 9:40 AM
The aim of the paper is to identify the main factors influencing the error rate in financial statements prepared under International Financial Reporting Standards (IFRS), mainly the impact of standards themselves or the human factor involved in their preparation. The authors study what factors influence quality, mainly reliability, of presented accounting information. The quality and reporting ability of financial statements depends on diverse factors. Research on a sample of Czech enterprises that prepare financial statements under the IFRS was conducted using a questionnaire. 193 companies were contacted personally and all 193 companies actually completed the questionnaire. On average, it took 30 minutes to complete the questionnaire. The questionnaire included 25 questions. The research focused on perceived problems in IFRS application where Czech Accounting Standards differ from IFRS in many significant areas, and further on relationship to behavioral aspects of human activity which influence accounting information quality and may result in mistakes or errors in financial statements of companies. Observation and quantitative analysis were used together with synthesis of partial conclusions to define and classify factors that may result in mistakes or errors in financial statements of the company. The sample of respondents mainly focused on middle or larger enterprises, which prepare financial statements under IFRS. Enterprises of all legal forms operating in the Czech Republic were represented. For statistical methods, we used regression analysis. The results suggest that both IFRS standards themselves and the human factor may result in the appearance of errors or mistakes and that also financial statements, even those prepared under IFRS, are susceptible to reality distortion. The main target of the research is to classify and interpret factors influencing financial results and susceptibility to fraudulent actions.