Politická ekonomie 2020, 68(3):245-266 | DOI: 10.18267/j.polek.1279

Vykazování jiného výsledku hospodaření minulých let v českých společnostech

Jana Skálováa, Ladislav Mejzlíka, Marcel Barešb
a Vysoká škola ekonomická v Praze; Fakulta financí a účetnictví
b KPMG Czech Republic.

Reporting of Prior Period Errors and Changes in Accounting Policies by Czech Companies

The paper investigates the extent and reasons for restatements of financial statements by Czech firms. In 2013, Czech accounting regulation was amended to remove inappropriate accounting treatment for prior period errors and changes in accounting policies. A sample of 3,407 financial statements for the period 2013-2017 also includes a significant amendment to accounting standards in 2016. The combination of both amendments creates a quasi-natural experiment enabling investigation into firms' response to regulatory changes. Empirical analysis shows that restatements occurred in 7.4% of the cases. Using non-parametric tests, we found that restatements are more frequent in joint-stock companies and that corrections of prior period errors dominate over changes in accounting policies. An expected one-time increase in restatements in 2016 is confirmed; however, the hypothesis that increased restatements are driven by changes in accounting policies required by new GAAP can be neither confirmed nor refuted. The main cause is that over 50% of the entities did not disclose their reason for restatement, despite the fact that disclosure is mandated by accounting standards and all financial statements are audited.

Keywords: financial statements; Czech GAAP, restatements, changes in accounting policies, corrections of prior period errors
JEL classification: M40, M41, M42

Received: April 16, 2019; Revised: January 2, 2020; Accepted: January 14, 2020; Published: June 30, 2020  Show citation

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Skálová, J., Mejzlík, L., & Bareš, M. (2020). Reporting of Prior Period Errors and Changes in Accounting Policies by Czech Companies. Politická ekonomie, 68(3), 245-266. doi: 10.18267/j.polek.1279
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