1779
ACTA UNIVERSITATIS AGRICULTURAE ET SILVICULTURAE MENDELIANAE BRUNENSIS
Volume 63 194 Numbe 5, 2015
h p://dx.doi.o g/10.11118/ac aun201563051779
BIG BATH AS A DETERMINANT
OF CREATIVE ACCOUNTING IN SMALL
AND MICRO ENTERPRISES
Lenka Zemánko á1
1 Facul y o Business and Managemen , B no Uni e si y o Technology, An onínská 548/1, 601 90 B no, Czech
Republic
Abs ac
ZEMÁNKOVÁ LENKA. 2015. Big Ba h as a De e minan o C ea i e Accoun ing in Small and Mic o
En e p ises. Ac a Uni e si a is Ag icul u ae e Sil icul u ae Mendelianae B unensis, 63(5): 1779–1785.
C ea i e accoun ing is a 21s cen u y phenomenon and in he con ex o he economic c isis and defi ci
budge i has been ecei ing inc easing a en ion, in pa icula in he a ea o p e en ion and de ec ion
o accoun ing manipula ion. The ocus o he esea ch on small and mic o-en e p ises s ems om
li le a en ion paid o hese en e p ises and he undeniable impo ance o small and mic o-en e p ises
o he economy. P ima y esea ch is based on he examina ion o a phenomenological pa adigm,
i.e. i ocuses on unde s anding human beha iou on he basis o a e e ence amewo k o esea ch
pa icipan s. The main esea ch me hod used in esea ch is a compa a i e case s udy, which is one
o ew me hods ha allow esea ch o his sensi i e opic. Resea ch will ocus on he exis ence o a big
ba h in he company’s a io o p ofi and u no e as a de e minan o a change in he company’s
app oach o c ea i e accoun ing.
Keywo ds: c ea i e accoun ing, audulen accoun ing, ea nings managemen , ba h in accoun ing
INTRODUCTION
C ea i e accoun ing is o en associa ed wi h
he 21s cen u y’s economy and o se e al yea s
i has been discussed in he media i ually e e y
day. Following he end se by he media, c ea i e
accoun ing has become inc easingly mo e o en
he subjec o esea ch s udies and scien ifi c
publica ions.
A e media exposu e o a se ies o accoun ing
scandals, he concep o c ea i e accoun ing has
gained a new dimension, which caused he ocus o
esea ch in pa icula on la ge en e p ises and he
public adminis a ion.
In he con ex o he economic c isis and defi ci
budge , he issue o c ea i e accoun ing is, in
pa icula in e ms o p e en ion and de ec ion
o accoun ing manipula ion, an issue in ocus.
Small and mic o-en e p ises canno emain unde -
esea ched due o hei undeniable impo ance o
he economy.
Raising awa eness o he issue o c ea i e
accoun ing and he imp o emen o accoun ing
manipula ion de ec ion is one o he ways o fi gh
agains c ea i e accoun ing.
Theo e ical Backg ound
The concep o c ea i e accoun ing can be
unde s ood, in acco dance wi h he defi ni ions by
Nase in 1993, K upo á in 2001, O’Regan in 2004
and Tumpach in 2008, as a misuse o accoun ing
me hods and use o accoun ing manipula ions a
he en e p ise le el in o de o in l uence he i nancial
s a emen s so ha hey p o ide hei use s wi h
dis o ed in o ma ion abou he en e p ise.
In acco dance wi h he defi ni ions o he e m
in mo e ecen publica ions, c ea i e accoun ing
includes ope a ions wi hin he limi s o law as well
ope a ions ou side he law, i.e. audulen ones.
The eason o no excluding audulen ope a ions
is also he diffi cul y p o p o e he in en ion o
manipula e wi h accoun ing da a. A numbe
o esea ch s udies he e o e concen a e on
accoun ing auds as one o he wo s ac i i ies in
he a ea o c ea i e accoun ing.
Eff ec s o C ea i e Accoun ing
The eff ec s o c ea i e accoun ing, as epo ed
in he published li e a u e, can be di ided in o
in p inciple posi i e ones and nega i e ones.
1780 Lenka Zemánko á
The posi i e eff ec s o c ea i e accoun ing include
enhanced abili y o ex e nal use s o fi nancial
s a emen s o p edic he u u e o he company
(Roden and Sadan, 1980), o inc eased in o ma ion
alue o he epo ed p ofi s and he pe cep ion o
he en e p ise as less isky in he case o he use o
c ea i e accoun ing (Wang and Williams, 1994),
o inc eased sus ainabili y and p edic abili y o
e enue (Sub amanyam, 1996). A posi i e eff ec can
also be conside ed educed cos o bo owed capi al
and imp o emen o condi ions o ob aining
addi ional capi al (Ama e al., 2000). En e p ises
may also see he con usion o compe i o s by alse
da a as a posi i e eff ec . Examples o au ho s who
belie e ha he infl uence o c ea i e accoun ing on
he ma ke is insignifi can include Imhoff (1977) o
Healy and Wahlen (1999).
Howe e , posi i e and neu al app oaches o
au ho s o c ea i e accoun ing a e, consequen ly,
subjec ed o a gumen s o au ho s who pe cei e
c ea i e accoun ing as a nega i e phenomenon. As
S olowy and B e on (2004) a gue, i ma ke playe s
knew ha he numbe s a e manipula ed, he e
would be no eason o hei manipula ion.
Manipula ion wi h accoun ing da a, howe e ,
has a mo e signifi can consequence beyond
p o iding manipula ed in o ma ion o company
sha eholde s and owne s. E en assuming ha
we acknowledge he benefi s specifi cally o
hem, c ea i e accoun ing p o ides manipula ed
in o ma ion o he whole socie y. These esul s hen
aff ec he s a is ics o he en i e coun y and hence
GDP and o he indica o s. On a deepe hough ,
s a is ics da a hen aff ec he alloca ion o esou ces.
In an economy whe e alloca ion o esou ces is
aff ec ed by in e en ions such as manipula ions
wi h accoun ing da a o business uni s, he gene al
economic a ge in he o m o effi cien alloca ion
o esou ces may be h ea ened. A specifi c pa o
c ea i e accoun ing which can al eady be classifi ed
as economic c iminal ac i i ies has pa amoun
social and economic impac on he in e nal s abili y
o he S a e. Besides o he aspec s, i aff ec s he basic
e enue componen s o he S a e; i hese a e
h ea ened, he long- e m unc ioning o he s a e
mechanism is challenged. Fo example, fi nancial
analys Smi h (1992) belie es ha he g ea es pa
o he economic g ow h o he Uni ed Kingdom in
he 1980s can be a ibu ed o c ea i e accoun ing
a he han ac ual economic g ow h.
As a as nega i e eff ec is conce ned, c ea i e
accoun ing may ha e ad e se, o e en liquida ing,
consequences o en e p ises ha use i (Smi h,
1992). Indi ec damages ela e o des abiliza ion
o us on he fi nancial ma ke s, a decline in
he olumes o ading, and a educ ion in
he olume o in es men by he en e p ises
(Tumpach, 2008). Alb ech ’s (2006) conclusions
s a e ha a e he manipula ion wi h accoun ing
da a o En on was published, he decline in ading
caused by a loss o in es o s’ us was e en highe
han he decline caused by he e o is a acks in
Sep embe 2001.
The eff ec s o c ea i e accoun ing can he e o e
be conside ed o be much g ea e han an o dina y
pe son compiling he fi nancial s a emen s ealizes,
and c ea i e accoun ing mus be unde s ood pu ely
as a nega i e phenomenon wi h ad e se eff ec s
on he en e p ise i sel as well as on he socie y as
a whole.
De ec ion o C ea i e Accoun ing
Unde s anding o c ea i e accoun ing in
he nega i e sense aises he ques ion o p e en ion
and fi gh agains c ea i e accoun ing. The sea ch
and he use o ools o de ec c ea i e accoun ing is
one o he ways ha can help inc ease he pe cei ed
isk o manipula ing accoun ing da a and can aid
p e en ion and fi gh agains he phenomenon
o c ea i e accoun ing. De ec ion o accoun ing
manipula ions is a e y complex p ocess, which is
in he cen e o a en ion o a numbe o esea ch
s udies.
One o he de e minan s o c ea i e accoun ing
can be conside ed big ba h accoun ing. In Healy’s
iew (1985), big ba h accoun ing ep esen s
a pa icula d op in accoun ing da a which p ecedes
manipula ion. Healy he e o e unde s ands he big
ba h as he cause o c ea i e accoun ing, ollowed
by c ea i e accoun ing echniques wi h he aim o
elimina e g ea dec eases in fi nancial indica o s.
Con e sely, Blake e al. (1995) conside big ba h
accoun ing o be a esul o c ea i e accoun ing.
They s a om he posi ion ha en e p ises may
seek o epo he maximum loss in one yea o
be able o epo an imp o emen in fi nancial
indica o s in he ollowing yea s.
The mos commonly used indica o s in
he de ec ion o c ea i e accoun ing a e
he company’s p ofi and income. In he USA,
he e m ea nings managemen has been commonly
used. Ea nings managemen is unde s ood as
applica ion o decision-making in he ma e o
fi nancial epo ing and s uc u ing o ansac ions
wi h he aim o p o ide misleading fi nancial
epo s o some s akeholde s so as o infl uence
he pe o mance o he en e p ise o u u e
ansac ions ha depend on he epo ed esul s
(Healy and Wahlen, 1999). Ea nings managemen
is he e o e based on in o ma ion asymme y,
which occu s be ween he p i ileged managemen
and mo e dis an s akeholde s (Schippe , 1989).
Con empo a y li e a u e desc ibes wo basic
objec i es o ea nings managemen . One o hem
is an a emp o epo he bes esul s possible (e.g.
Bonne e al., 1998; Healy and Wahlen, 1999; Lynch
e al., 2011). Ano he ocus o ea nings managemen
desc ibed in he li e a u e is, on he con a y,
epo ing o he lowes possible p ofi in an a emp
o educe he amoun o he paymen s de i ed om
he p ofi (Tumpach, 2008; Ra isanka e al., 2011).
The manage s o small and mic o en e p ises ha e
diff e en app oach han manage s o big companies.
Big Ba h as a De e minan o C ea i e Accoun ing in Small and Mic o En e p ises 1781
Accoun ing is closely connec ed o he axes
paymen . In ha sys em small and mic o-en e p ises
y o modi y hei axes paymen s downwa ds.
In hei esea ch ocused on c ea i e accoun ing,
o he au ho s also concen a e on p ofi ; hese
conside indica o s based on p ofi o be he mos
sui able ones o aud de ec ion (e.g. Bu gs ahle
and Diche , 1997; Dechow and Skinne , 2000;
Eli zu , 2010; Comunale e al., 2010; Hadani
e al., 2011; Ra isanka e al., 2011). Fo example,
Ra isanka e al. in hei esea ch used he a io o
p ofi ela i e o e enue. O he esea ch s udies
in he a ea o c ea i e accoun ing also ocus on
indica o s based on income (e. g. Loebbecke e al.,
1989; Comunale e al., 2010; Ra isanka e al., 2011).
The abo e implies ha one o he app op ia e
indica o s o de ec ing c ea i e accoun ing is
conside ed o be a io o he company’s p ofi and
u no e .
In p ac ice, companies ha a e unco e ed a e
mos ly hose whose manage s use oo agg essi e
echniques and ha e no co ec ly assessed
he bounda y be ween ea nings managemen and
aud, and clea ly iola ed legal no ms. Gene ally i
can be said ha in p ac ice i is diffi cul o iden i y
companies ha abuse accoun ing (Dechow and
Skinne , 2000).
OBJECTIVE AND METHODOLOGY
The objec i e o his pape is o e i y he exis ence
o a big ba h o a company’s a io o p ofi and
u no e in selec ed small and mic o-en e p ises as
a de e minan o changes in he app oach o c ea i e
accoun ing.
Resea ch on he p oblems o c ea i e accoun ing
can be conside ed a e y sensi i e opic. I is esea ch
o a phenomenological pa adigm, i.e. i ocuses on
unde s anding human beha iou on he basis o
a e e ence amewo k o esea ch pa icipan s.
This app oach emphasizes he subjec i e aspec s
o human ac i i y wi h a ocus on meaning a he
han on measu ing social phenomena. The ocus
on he phenomenological pa adigm in a sensi i e
opic like ha o c ea i e accoun ing appea s o
be mo e app op ia e because i is no possible o
ob ain suffi cien amoun o da a o quan i a i e
esea ch so ha hese da a could be ega ded
a ep esen a i e sample o en e p ises. Ob aining
sui able da a o he examina ion o he issue o
c ea i e accoun ing in he Czech Republic is a e y
ha d ask due o obliga ions o confi den iali y o
offi cials and pe sons in ol ed in he adminis a ion
o axes, which ollows om sec ion 52 o he Tax
Code. In esea ch ocused analyzing a numbe
o cases, he eff ec o he su eyed ma e and
he people’s ea o he consequences may lead
o a signifi can dis o ion o he ou pu s o
he esea ch. The e o e, i was no possible o
conduc esea ch using common esea ch me hods
such as ques ionnai e su eys. In addi ion, mos
companies a e no willing o pa icipa e in such
esea ch due o hei ea o he consequences o
he esea ch on he con inua ion o he en e p ise’s
ac i i y. Phenomenological pa adigm seems o be
mo e con enien also due o i s main cha ac e is ics,
as lis ed by Collis (2003). I in ol es p oduc ion
o a he quali a i e da a (al hough pa ly also
quan i a i e), use o a small analyzed sample, ocus
o he esea ch on he o ma ion o heo ies wi h
low eliabili y bu high alidi y and a emp s o
gene alize om one sample o ano he .
A numbe o me hods can be used in esea ch on
a phenomenological pa adigm. The me hod selec ed
as ele an o his esea ch was a case s udy wi h
he use o some elemen s o e hnog aphic me hods.
As Colis and Hussey (2003) a gue, he me hod o
case s udies should be used mainly as a mode n
me hod o empi ical esea ch in he esea ch o
cu en , no his o ical p oblems, especially in
si ua ions whe e he ele an beha iou canno
be manipula ed (o only indi ec ly). Yin (2003)
claims ha he me hod is sui able i he me hod o
in e iews wi h indi iduals in ol ed can be used o
da a collec ion. E hnog aphy is a me hod in which
he esea che uses hei acqui ed social expe ience
o unde s anding human beha iou pa e ns.
In many si ua ions, he case s udy me hod helps
ecognize o ganiza ional, social, poli ical and
ela ed phenomena in indi iduals as well as in
g oups. In he las ew yea s hey ha e also been
applied o economics. A gene al defi ni ion o case
s udy says ha i is an in ensi e s udy o one case,
one si ua ion, one pe son o one p oblem, which
allows o a e y ho ough and comp ehensi e g asp
o he p oblem (Ši oký, 2011).
Depending on he manne o applica ion o
he me hod, a mul iple compa a i e explana o y
case s udy was selec ed because mul iple case s udy
is conside ed o be mo e conclusi e han single case
s udy. The pu pose o a compa a i e case s udy is
o sea ch o simila i ies and diff e ences be ween
indi idual cases.
Yin (2003) a gues o wo o h ee cases as
he ecommended minimum. Simila ly, Miles
and Hube man (1994) claim a minimum o wo o
ou cases. In case s udies, he selec ion is always
delibe a e since i is he only way o ensu e ha
he phenomena unde in es iga ion will ha e
exac ly he cha ac e is ics ha a e needed o
esea ch (Ši oký, 2011). Fou companies ha use
c ea i e accoun ing we e selec ed o he esea ch.
These companies a e u he in he s udy e e ed o
as cases A o D because o he sensi i i y o he da a
p o ided. The basic in o ma ion abou he selec ed
companies is lis ed in Tab. I.
The esea ch is ocused on en e p ises ope a ing
in he p i a e sec o , and his is o wo easons.
The fi s eason is less p essu e on en e p ises in
he p i a e sec o compa ed wi h en e p ises in
he public sec o . The second eason is he ac
ha he p i a e sec o makes up he majo i y in
he p oduc ion o GDP in he Czech Republic.
Fo example, in 2011 and 2012, he expendi u es
1782 Lenka Zemánko á
o he non-go e nmen al sec o ep esen ed 79%
(The Czech S a is ical Offi ce, 2013). The selec ion o
en e p ises ocused on small and mic o-en e p ises.
In he a ea o de ec ion and p e en ion o c ea i e
accoun ing, he ax au ho i y cu en ly ocuses
a he on la ge en e p ises due o he signifi cance
o possible manipula ion wi h accoun s and,
in he con ex o Czech legisla i e amewo k,
he subsequen amoun o axes. Small and
medium-sized en e p ises do no ecei e much
a en ion o he ax adminis a ion and esea ch
s udies. The impo ance o small and medium-
sized en e p ises o he pe o mance o he s a e
economy is undeniable. Acco ding o he s a is ics
o The Czech S a is ical Offi ce, in 2011 small and
mic o-businesses ep esen ed 99.84% o ac i e
business en i ies in he Czech Republic, employed
60.85% o all employees in he business sec o and
accoun ed o 54.43% o he added alue (The Czech
S a is ical Offi ce, 2013). Mo eo e , a s udy by Hadani
e al. (2011) p o es ha he size o an en e p ise has
nega i e ela ionship wi h c ea i e accoun ing.
The assump ion ha la ge en e p ises use c ea i e
accoun ing less o en also s ems om he obliga ion
o ha e he fi nancial s a emen s e ifi ed by an
audi o , and a g ea e p obabili y o he en e p ise’s
ela ions wi h he Chambe o Cha e ed Ce ifi ed
Accoun an s and, he e o e, adop ion o i s code o
e hics.
In he phase o da a collec ion me hod,
he in e iew me hod and he me hod o analysis
o documen s we e used. In case s udies,
he in e iew me hod is one o he main sou ces
o in o ma ion (Yin, 2003). As opposed o, o
example, ques ionnai e su ey, an in e iew allows
he in e iewe o ask mo e complex ques ions
and u he de elop hose (Collis, 2003). As a as
he o ma o in e iew is conce ned, he in e iews
we e mainly pe sonal in e iews wi h con ac
pe sons, who we e, in wo cases, he company
execu i es and, in wo cases, he company
accoun an s. In e ms o s uc u e o ques ions,
he in e iews we e non-s anda dized in e iews
wi h non-s uc u ed ques ions, as equi ed,
acco ding o Collis (2003), by he phenomenological
app oach. The analysis o documen s was based
on p ofi and loss s a emen s o he su eyed
en e p ises o he las ew yea s ha we e p o ided
by he con ac pe sons o analysis.
The selec ed cases ha e some iden ical o simila
cha ac e is ics, such as he legal o m, he numbe
o membe s, paid-up egis e ed capi al, and size o
he en e p ise. These ensu e he compa abili y o
he esul s.
A he same ime, he cases show some diff e en
cha ac e is ics in e ms o he ime pe iod o
he es ablishmen o he company, he line o
business, he olume o he cu en u no e o
he company, he p ofi and he eeling o being
hi by he economic c isis. This allows examining
he companies’ diff e ences in hei app oach o
c ea i e accoun ing.
MAIN RESULTS OF THE RESEARCH
On he basis o he documen s analysis, he
e olu ion o each company’s p ofi and u no e
was iden ifi ed.
Based on in e iews wi h he con ac pe sons,
in o ma ion was supplemen ed abou he e olu ion
o he company’s a i ude o c ea i e accoun ing.
Specifi c ques ions we e di ec ed o whe he
he company in he cou se o i s exis ence used
he echniques o c ea i e accoun ing echniques
and whe he i s a i ude owa ds hei use changed
du ing he exis ence o he company, i.e. whe he
he company s a ed using c ea i e accoun ing
o a g ea e ex en o whe he , on he con a y,
I: Basic cha ac e is ics o selec ed cases
Case A Case B Case C Case D
Con ac pe son Execu i e Execu i e Accoun an Accoun an
Legal o m s. . o. (~LLC) s. . o. (~LLC) s. . o. (~LLC) s. . o. (~LLC)
Numbe o membe s 2 2 2 1
Regis e ed capi al
in CZK 200 700 200 200
Numbe o employees 0 12 16 4
Inco po a ion 2009 1991 2007 2003
Line o business ci il cons uc ion elec onics
manu ac u ing
ope a ion o in e ne
po als design ac i i ies
CZ NACE F C J M
Tu no e
in millions CZK 10 40 20 5
Company’s p ofi inc easing s agnan un il 2011 inc easing,
since 2012 dec easing
making a loss o e
he las yea s
Pe cep ion o being
hi by ec. c isis no hi no hi hi hi s ongly
Sou ce: own elabo a ion
Big Ba h as a De e minan o C ea i e Accoun ing in Small and Mic o En e p ises 1783
he use o c ea i e accoun ing dec eased du ing
he exis ence o he company. O he ques ions we e
di ec ed o he pe cep ion o he deg ee o which
he company was aff ec ed by he economic c isis.
The in e iews con inued bu o he ques ions we e
associa ed wi h esea ch o o he de e minan s o
c ea i e accoun ing since his pa icula esea ch is
pa o a la ge one. The companies’ a io o p ofi
and u no e is ep esen ed in Fig. 1.
The cha shows he indica o in he su eyed
en e p ises in each yea o he exis ence o
he company.
In case A, he cha shows a clea ly no iceable
decline in he company’s a io o p ofi and u no e
in 2011. An in e iew wi h he con ac pe son
e ealed ha in ha yea he company signifi can ly
inc eased he use o c ea i e accoun ing due
o he g ow h in i s p ofi . P ofi g ow h in
he condi ions o a close ela ion o p ofi and ax
obliga ions o he company led he company owne s
o a emp s o educe he amoun o axes paid.
This was he eason o he inc ease in he use o
c ea i e accoun ing. The in e iew also e ealed ha
he company has been hi by he economic c isis.
The decline in he a io o p ofi and u no e can be
conside ed a big ba h in accoun ing.
In case B, he indica o has been inc easing
sligh ly since 2004. By con as , i has been
dec easing sligh ly since 2004. In 2004, he inc ease
in he indica o is mo e signifi can han in o he
yea s. The in e iew showed ha in ha yea
he company signifi can ly es ic ed he use o
c ea i e accoun ing, mainly because o he pe sonal
posi ion o he company owne and changes
in his amily si ua ion. The con ac pe son also
s a ed ha he company did no eel o be aff ec ed
by he economic c isis. The de elopmen o
he company’s p ofi and u no e a io can be
conside ed a so o e e se ba h in accoun ing.
Fu he mo e, he cha shows a no iceable decline
in he indica o o company C h oughou i s
exis ence. Du ing he conside ed pe iod, he cha
does no indica e any sho - e m d op o inc ease
in he indica o , i.e. he big ba h in accoun ing o
i s e e se a ian . The en e p ise limi ed he use
o c ea i e accoun ing in 2012 bu he e olu ion
o he indica o does no ye sugges any hing
ela ed o he exis ence o a big ba h o he indica o
in ques ion. Whe he his ac will infl uence
he e olu ion o he a io o he selec ed a iables
will only be possible o fi nd a e he publica ion
o fi gu es o 2013. As he company’s con ac
pe son s a ed, he company has, since 2009, been
expe iencing a decline in p o ision o se ices
because o he economic c isis. The de elopmen
o he indica o can he e o e be aff ec ed by
he economic c isis.
The cha shows a clea ly no iceable decline in
he company D a io o p ofi and u no e in 2009.
The in e iew e ealed ha managemen has no
signifi can ly changed hei a i ude owa ds c ea i e
accoun ing and also he ac ha he company
has been signifi can ly hi by he economic c isis
since 2009. The de elopmen o he indica o is
he e o e signifi can ly aff ec ed by he economic
c isis. The ac ha in his case i is no a big ba h
in he company’s a io o p ofi and u no e bu
infl uence o he economic c isis on he indica o
can also be jus ifi ed by he low alue o he indica o
in he wo ollowing accoun ing pe iods. I is
he e o e no an immedia e d op bu a long- e m
s a us. The de elopmen o he indica o in 2012
p o es ha he en e p ise o e come he economic
c isis. The con ac pe son confi ms ha in 2012
he company saw a signifi can g ow h in he olume
o se ices p o ided.
All ou o he in e iews also showed ha
en e p ises use c ea i e accoun ing due o eff o s
o educe he amoun o compulso y paymen s,
whe he i is co po a e income ax o pe sonal
income ax and social and heal h insu ance o
employees. This ac is ela ed o he close link
be ween he p ofi and he ax base in he condi ions
o he Czech ax and accoun ing sys ems. In
he con ex o hese links, in e iews show ha
en e p ises wi h g owing p ofi used c ea i e
accoun ing mo e and hose wi h dec easing p ofi
use i less. He e i can be assumed ha he use o
Ͳ20%
Ͳ10%
0%
10%
20%
30%
40%
2001 2003 2005 2007 2009 2011
Ra io o p o i and u no e in %
A
B
C
D
1: P o i and u no e o he su eyed companies
Sou ce: own elabo a ion

1784 Lenka Zemánko á
c ea i e accoun ing in he con ex o eff o s o
dec ease p ofi is ela ed o he ocus o he esea ch
on small and mic o-en e p ises.
DISCUSSION OF THE FINDINGS
C ea i e accoun ing is a phenomenon whose
consequences a e nega i e o bo h he en e p ise
and he economy, despi e he ac ha some au ho s
claim ha he eff ec s a e in p inciple posi i e (e.g.
Roden and Sadan, 1980; Wang and Williams, 1994;
Sub amanyam, 1996; Ama e al., 2000). Nega i e
consequences (lis ed, o example, by Smi h, 1992;
Alb ech , 2006; Tumpach, 2008) and hei impac
on he economy o he S a e a e he eason o
he educ ion and p e en ion o c ea i e accoun ing.
One way o limi ing c ea i e accoun ing is imp o ing
he de ec ion o accoun ing manipula ion.
Big ba h in accoun ing, i.e. a sho - e m d op
in ce ain fi nancial indica o s, may be used as
one o he de e minan s o changes in app oach
o c ea i e accoun ing. One o he indica o s ha
can be used o de ec changes in he app oach
o c ea i e accoun ing is he a io o p ofi and
u no e (simila ly o Ra isanka e al., 2011).
A fl uc ua ion o his indica o may be conside ed, in
acco dance wi h Blake e al. (1995), o be a esul o
a change in he a i ude o c ea i e accoun ing a he
han i s cause as Healy (1985) belie es. A d op in
he indica o s can de ec an inc eased use o c ea i e
accoun ing in he en e p ise; on he con a y, i s
sho - e m inc ease may de ec es ic ion o use o
c ea i e accoun ing in he en e p ise.
The use o such d op in he company’s a io o
p ofi and u no e o de ec an inc eased use o
c ea i e accoun ing is es ic ed by he economic
c isis, which aff ec s his indica o . The esul o
he economic c isis, howe e , may ha e a long-
e m impac on he unde aking, and he e o e
he indica o may also be infl uenced in long e m.
Ne e heless, he use o he indica o o company’s
a io o p ofi and u no e as a de e minan o
changes in he company’s app oach o c ea i e
accoun ing is limi ed in he e en o he company
being s icken by he economic c isis, and his
mus be aken in o accoun . The abo e indica o
can be be e used o de ec c ea i e accoun ing
in en e p ises which do no eel o be aff ec ed by
he economic c isis.
CONCLUSION
C ea i e accoun ing is a phenomenon wi h a nega i e impac on he economy. C ea i e accoun ing
p o ides no only manipula ed da a o business owne s and sha eholde s, bu also alse in o ma ion o
s a is ics on he de elopmen o he economy o he S a e. In a sys em whe e he e is a close ela ionship
be ween accoun ing and he ax sys em, as is he case in he Czech Republic, manipula ed accoun ing
di ec ly aff ec s he income componen o he S a e budge , which b ings abou de e io a ion in he effi ciency
o esou ce alloca ion in he economy. C ea i e accoun ing also has indi ec impac on he decline in us
and ade. The nega i e eff ec s o c ea i e accoun ing a e he eason o he need o deal wi h issues ela ing
o i s limi a ion and p e en ion.
The e is p obably no eliable way o p e en all cases o accoun ing manipula ion. Inc easing he isk o
disclosu e o he accoun ing manipula ions, howe e , con ibu es in he fi gh agains and p e en ion o his
phenomenon.
De ec ion o c ea i e accoun ing is no an easy ask. In p ac ice, companies ha a e unco e ed a e mos ly
hose whose manage s use oo agg essi e echniques and ha e no co ec ly assessed he bounda y be ween
ea nings managemen and aud, and clea ly iola ed legal no ms. O e all, i has been confi med ha in
p ac ice i is diffi cul o iden i y companies ha abuse accoun ing (Dechow and Skinne , 2000).
Imp o emen in he de ec ion o c ea i e accoun ing is he subjec o a numbe o esea ch s udies;
howe e , i canno be said ha he de ec ion o accoun ing manipula ions is suffi cien . The e o e,
examina ion o o he de e minan s o c ea i e accoun ing and aising awa eness o he issue o accoun ing
manipula ions can ha e a es ic i e as well as a p e en i e impac on c ea i e accoun ing.
One o he de e minan s o a change in he company’s app oach o c ea i e accoun ing can be conside ed
a sho - e m decline in he a io o he company’s p ofi and u no e . Howe e , i is necessa y o ake in o
accoun ha his indica o may be infl uenced i he company has been hi by he economic c isis.
Acknowledgemen
The pape is he ou pu o specifi c- esea ch p ojec Resea ch on in e nal and ex e nal ac o s aff ec ing
he alue o he company o he In e nal g an agency o Technical Uni e si y in B no wi h egis a ion
numbe FP-S-13-2064.
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Con ac in o ma ion
Lenka Zemánko á: zemanko [email p o ec ed].cz