Experiences of auditors and tax advisors with accounting errors: Empirical evidence from the Czech Republic

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F70883521%3A28120%2F20%3A63525258" target="_blank" >RIV/70883521:28120/20:63525258 - isvavai.cz</a>

Alternative codes found

RIV/61384399:31110/20:00055486

Result on the web

<a href="https://link.springer.com/article/10.1007%2Fs11294-020-09797-x" target="_blank" >https://link.springer.com/article/10.1007%2Fs11294-020-09797-x</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1007/s11294-020-09797-x" target="_blank" >10.1007/s11294-020-09797-x</a>

Result language

angličtina

Original language name

Experiences of auditors and tax advisors with accounting errors: Empirical evidence from the Czech Republic

Original language description

Accounting provides a wide range of quantitative information for decision making of General purpose of financial reports is to represent the economic phenomena in numbers and words. A faithful representation of these phenomena is one of the fundamental requirements for accounting information presented through the financial reports. Information is expected to be complete, neutral and free of error. Avoiding errors is impossible. The errors in accounting occur from time to time in any company. The errors may scale from insignificant to material errors; they can appear intentionally or unintentionally. Auditors and tax advisors are usually the first to come in contact with the financial reports. They are also usually the ones who identify the accounting errors. Neither auditors nor tax advisors are able to identify all errors. Some errors remain in accounting and financial statements of companies and these errors are identified only in subsequent periods. The paper focuses on the experiences of auditors and tax advisors from the Czech Republic with the accounting errors. The authors wanted to investigate whether the accounting errors occurred in the companies, how often they occurred, how large the errors were on average, and how management of companies responded to this error detection. The questionnaire survey was made in 2019. We received the answers from 45 auditors and 57 tax advisors from the Czech Republic. We used the methods of observation and the method of synthesis of partial conclusions to analyze the research data. The descriptive statistics, the chi-square test of independence and the proportional tests were applied for the statistical data analysis. The results showed that the errors in accounting did not occur regularly. We found out that 87 % of auditors and tax advisors almost never revealed these errors and only 13 % of them revealed the errors occasionally. We did not confirm the statistical dependence between the frequency of occurrence of errors and the average size of errors. On the other hand, we found out that two-thirds of auditors and tax advisors revealed unimportant errors and a third of them revealed minor errors. The errors in accounting were detected only once in 94 % of cases. We concluded that neither the detection of errors or inaccuracies nor the average size of these errors have no connection with who is responsible for reviewing the financial statements. Most auditors and tax advisors agreed that management of companies in which the errors occur are willing to correct most of errors identified in their financial reports.

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50205 - Accounting

Project

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Continuities

V - Vyzkumna aktivita podporovana z jinych verejnych zdroju

Publication year

2020

Confidentiality

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

Name of the periodical

International Advances in Economic Research

ISSN

1083-0898

e-ISSN

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Volume of the periodical

23

Issue of the periodical within the volume

3

Country of publishing house

US - UNITED STATES

Number of pages

2

Pages from-to

323-324

UT code for WoS article

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EID of the result in the Scopus database

2-s2.0-85089402466