M40 - Accounting and Auditing: GeneralReturn

The article presents the procedure of concluding an advance pricing agreement between the taxpayer and the tax authority as a tool of tax strategy of large international groups. It was pointed out that the advance pricing agreement may be a key tool to protect affiliates operating in different tax jurisdictions from the questioning of market conditions in their transactions by tax administrations. The essence and stages of concluding this agreement are presented on the basis of the tax practice applied in Poland. In addition, special attention was paid to issues concerning properly implemented tax strategy in large international capital groups. The content of the article indicates certain benefits of establishing an advance pricing arrangement and its impact on the tax strategy in a capital group.

Socially responsible investments are one of the most dynamically developing segments of investments and socially responsible investing plays an ever growing role in the world's financial markets. Poland is in the infancy stage of development of socially responsible investments.
Socially responsible investing is a decision-making process concerning the allocation of free financial resources, where the investor aims at maximisation of profit and minimisation of risk on one part, and includes the socio-ethical and environmental-ecological considerations on the other.
The aim of the paper is to assess the valuation methods and the scope of information on socially responsible investments presented in financial statements of Polish public companies. Assessment of the market of socially responsible investments in Poland according to the European classification of strategies for investing socially responsibly is also purposeful.
The paper presents the results of empirical research of valuation and disclosure of SRI in financial statements of Polish public companies.

There has been no recent examination of a disclosure of intangible assets under IFRS of entities listed on PSE. Hence, this article focuses on such an examination within financial statements reported for 2015 by entities listed on PSE and investigates whether these reports meet the minimum informational IFRS requirements. Adopted was the content analysis method, using a scoring system for the set of four questions which were answered (88 observations). The results revealed a poor level of the disclosure quality within the sample. Furthermore, our findings exposed a better level of disclosure for manufacturing companies relative to service companies, implicating a close linkage of disclosure compliance and the associated industry sector.

Young, high growth internet/online companies are an attractive topic for market analysts and hot shots of Initial Private Offerings. At the same time, it is very complicated to provide a robust valuation for such companies, as shown by often unpredictable paths of share prices, resulting in the dot.com bubble burst in the past. This paper aims to explain why traditional valuation techniques fail to identify the value of a company with a fair degree of probability and tries to identify new metrics reported by managerial accounting that should be included in the valuation procedure. Assuming the condition of technological interchangeability of processes and practices, the presented paper concludes that using the New Economy specific metrics, such as traffic and various conversion factors explaining top-line traffic monetization, it is possible to adopt a conventional valuation technique, i.e. the DCF, with a very high degree of confidence for the incremental revenue and profit estimations. The interchangeability is also a proof of an innovative potential of the newly introduced technologies and explains the high frequency of strategic acquisitions on this market. Needless to say, the key information sources for valuation of companies under consideration are not financial statements, but managerial records instead, especially web analytics and search algorithm entries.

Although the IFRS 13 standard has been effective for more than 4 years, there is virtually no practical research on this topic. Therefore, this paper focuses on reporting of fair value measurement under IFRS 13 in the Czech Republic. Firstly, the author identifies and describes the theoretical basis of IFRS 13 with a relevant literature review of the conducted research. Subsequently, the actual empirical research is presented on a sample of companies from the Czech Republic. The author reaches a conclusion that in some cases, companies in the Czech Republic fail to report compulsory information, as required by the IFRS 13 standard. Moreover, the empirical research has revealed that the proportion of the fair value measurement within fair value hierarchy is approximately one third for each of the three levels, and it does not change over time.

The aim of this paper is to assess the quality of share-based payments' disclosure in compliance with IFRS 2 by companies listed on the Prague Stock Exchange. The study shows how companies in the Czech market utilizing share-based payments meet the requirements given by IFRS 2 framework and in order to support the arguments, it compares the results with randomly selected companies from the German DAX index, which represents a well-developed market. The focus is on three key principles of disclosure, as defined by the IFRS 2. As we will demonstrate, Czech corporations do meet the regulatory minimum requirements, but they fail to utilize some of the advanced valuation methods and their reports are generally rather brief compared to their German counterparts.

This paper focuses on an analysis of the mandatory disclosure of goodwill impairment information in compliance with the international accounting standard IAS 36. The international financial reporting standards require a wide range of disclosed information concerning the goodwill impairment such as the carrying amount of goodwill allocated to the cash generating unit, determination of the discount rate applied to areas such as cash flow projections or sensitivity analysis. Prior research on disclosure requirements of goodwill impairment has shown generally low level of compliance within the selected companies. The main goal of this paper is to find out whether companies with higher goodwill intensity disclose the information required by IFRS on the impairment of goodwill. An empirical approach consisted of analysing consolidated financial statements of selected companies listed on DAX 30 and FTSE 100 . Our sample covered 89 companies and focused on their statements from 2010 to 2013. The results showed generally low compliance that subsequently affected the comparability of statements. The following requirements were identified as critical - determination of growth rate, disclosure of growth rate used to extrapolate cash flow projections, determination of discount rate, discount rates applied to cash flow projections and disclosure of the sensitivity analysis. These findings can be further utilized by regulators in order to increase the quality of disclosures in financial statements.

Sustainability Reporting Guidelines published by the organization Global Reporting Initiative are gaining on importance and we were investigating whether this trend is also reflected in academic literature and if so, how. We conducted bibliometric analysis based on the Web of Science database to identify key articles, authors, journals and research topics. Results show that the amount of literature dealing with GRI Guidelines is growing. Major journals are Journal of Business Ethics, Corporate Social Responsibility and Environmental Management and Journal of Cleaner Production. High productive authors according to the number of authored or co-authored articles are Brown, H. S., Manetti, G., Evangelinos, K., Skouloudis, A., Searcy, C., Issac, B. and Modapothala, J. R. Research topics of these high productive authors are development of GRI as an institution, development of GRI Guidelines per se, methodologies for assessment of sustainability in organizations and composite indices, methodologies for evaluation and quality assessment of corporate responsibility reports, development of specific (e.g. sector-based) indicators and empirical investigation into indicators used in practice, stakeholder's role in the process of corporate responsibility reporting, assurance for corporate responsibility reports, exploring relation between quality of corporate sustainability disclosure and various variables, empirical content analysis and comparative content analysis of corporate sustainability reports and conceptual issues. We can conclude that the amount of relevant literature is growing and high productive authors and journals are emerging.

The aim of this paper is to review if the implemented balanced scorecard is an efficient way to motivate people and increase their work effort. The empirical research had been conducted in one of the big multinational companies. Balanced scorecards for such companies are mainly driven by global, strategic measures. It is questionable, if employees of the Czech local branch are interested and motivated by the global results. Perhaps, it would make more sense to put emphasis on the individual performance measures in this case. Such questions and answers are part of the empirical study conducted for this paper.

Timely financial reporting is an essential ingredient for a well-functioning capital market. The objectives of this study are two-fold. First, to measure the extend of timeliness in a developing country, Turkey. Second, to establish the impact of both company specific and audit related factors on timeliness of financial reporting in Turkey. This study reports on the results of an empirical investigation of the timeliness of financial reports by 211 non-financial companies listed on the Istanbul Stock Exchange. The descriptive analysis indicates that 59% of the companies that prepares separate financial statements and 66% of the companies that prepares consolidated financial statements release their financial statements less than the maximum time allowed after the financial yearend. 28% of the companies that prepares separate financial statements and 16% of the companies that prepares consolidated financial statements exceeded the regulatory deadline. The multivariate regression analysis indicates that both sign of income, audit opinion, auditor firm and industry affect timeliness. The findings indicate that the companies that report net income, that have standard audit opinion, and that are operating in manufacturing industry release their financial statements earlier. On the other hand, it is found that the companies that are audited by big four audit firms are late reporters.

Governmental accounting in the US has undergone significant changes and with it the complexities of preparing financial statements for governmental entities increased. The GASB, Governmental Accounting Standards Board establishes the rules for reporting financial information for non-profit and public entities. The most important objective of governmental accounting and financial reporting is accountability. The GAAP hierarchy for governments consists of four levels, each having a varied degree of authority.

The development of a national accounting framework presents unique issues. A strong accounting system needs sufficient time to evolve. The influence of IFRS and of existing tax objectives of Czech accounting system increase the complexity and costs of implementing and monitoring the accounting rules. Given the short time between abandoning an economy based on public ownership and joining the European Union, Czech Republic made significant progress in development of its accounting regulation. The article addresses implementation of IFRS in the Czech Republic and describes the structure of accounting and auditing regulation which can be divided into four levels according to the reporting requirements set by the legislation. Major unsolved issues in the Czech national accounting system remain, including incomparability of Czech Accounting Standards and IFRS.