Q-DMFCA AND CFEBT METHODS AS POSSIBILITIES OF INCORRECTNESS IDENTIFICATION AND FRAUD IN ACCOUNTING OF A FIRM

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F60076658%3A12510%2F17%3A43896315" target="_blank" >RIV/60076658:12510/17:43896315 - isvavai.cz</a>

Result on the web

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DOI - Digital Object Identifier

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Result language

angličtina

Original language name

Q-DMFCA AND CFEBT METHODS AS POSSIBILITIES OF INCORRECTNESS IDENTIFICATION AND FRAUD IN ACCOUNTING OF A FIRM

Original language description

The quality of reported accounting data as well as the quality and behaviour of their users finally influences the efficiency of an enterprise´s management. Its assessment could therefore be changed as well. To identify creative accounting and fraud, several methods and tools are used. We present our proposal of the balance mode Q-DMFCA (Quick Detection Model (Material) Flow (Fraud) Cost Accounting) based on environmental accounting and MFCA (Material Flow Cost Accounting) as its method. The following balance areas are included: material, financial and legislative. Using the SWOT analysis, the strengths and weaknesses of the model were assessed based on its possible use within a production and business company, or firm. Its possible usage for the detection of some creative accounting techniques was also assessed. The model is further developed for its specific use in practice and theoretical aspects of risk are processed as a quick test without the need for mathematical tools. The next possibility of how to identify some methods of creative accounting is the CFEBT model. The identification model CFEBT was based on the hypothesis maintaining that there is a close relationship between the economic result of accounting and cash-flow accrual in a period of five years. Results of data analysed in the CFEBT model revealed that if an accounting entity adheres to a true and fair representation of its accounting in the context of Czech accounting standards, then it is not identified as creative accounting. This paper, in the aggregate of accounting economic results and aggregate of cash-flow accruals for five years, should not deviate from the determined limit of significance level (materiality) for the given accounting unit (5 to 10%). The testing hypothesis of the CFEBT model assesses whether there is a close relation of a loss and an increase in the cash flow in 5 year?s time; whether the sum of the amounts for 5 year?s time would reveal the same results respectively. We believe that the CFEBT model may be used by auditors for testing financial statements as a detailed test on the basis of which the risk of an accounting fraud may be identified. Moreover, it may be applied by all users of financial statements who are to consider the issue of reliability of financial statements submitted to them.

Czech name

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Czech description

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Type

B - Specialist book

CEP classification

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OECD FORD branch

50205 - Accounting

Project

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Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2017

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

ISBN

978-80-7394-643-2

Number of pages

110

Publisher name

Jihočeská univerzita v Českých Budějovicích, Ekonomická fakulta

Place of publication

České Budějovice

UT code for WoS book

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