The Impact of Globalization on International Finance and Accounting

This paper investigates the impact of separate accounting (SA) versus that of formula apportionment (FA) on investment decisions in high- and low-corporate income tax countries. As the investment decisions of multinational enterprises are commonly taken by managers and not by owners, the focus is on the impact of SA versus that of FA on the investment location decided by managers. This is done within the framework of the principal-agent setting, where a Monte Carlo simulation is carried out. Considering taxation under SA supports investing in a less risky investment, even if it is located in the country with the highest tax rate. In analysis of FA, allocation of the tax base based on formula and the cross-border loss offset encourages investing in a risky investment. This is in line with the aim of the European Commission regarding making investments more attractive and supporting cross-border investments within the EU. These results also show that the delegation of investment decisions to managers facilitates the investment in the high-tax country, under both systems, SA as well as FA. As a contribution to the literature reviewed, this study demonstrates that taking the differences in expected returns of investments across the countries, as well as the risk-averse behavior of investors, into account, reveals different impacts of taxation on the invested amount under SA and FA.

A regression model which investigates the relationship between locational choice of multinational enterprises (MNE) and environmental sustainability in host countries as the determinant of foreign direct investments (FDI) has been suggested. The following proxies are proposed for analysis of the environmental sustainability: variables measuring environmental damage, efficiency of natural resources’ employment, availability of renewable resources and, finally, governmental ability to maintain a fair distribution of resources. Swedish FDIs in 73 countries worldwide have been examined using a dataset provided by Statistics Sweden. According to the study, 83.2% of variation in the dependent variable, FDI, can be explained by the profitability of investments. The empirical evidence also indicates that environmental sustainability has little impact on foreign investors and that most investment location decisions are not made on the basis of environmental sustainability criteria, at least as it represented by proxies chosen in the paper.

The paper aims to examine whether R&D-active companies are financially constrained based on a self-assessment approach. A second aim is to check whether a company’s size has any impact on access to capital for R&D-active firms. The study is based on data collected from more than 400 enterprises operating in Poland. The analysis has confirmed that there is a significant difference between R&D-active companies and their peers with no R&D activity; however, the “size effect” was not strongly proven. It seems that both SMEs and large companies are financially constrained, thereby justifying the direct tools (e.g. grants) used for alleviating the problem of access to capital regardless of the company’s size.

Designing an effective tax regime for small businesses remains a pressing issue. The authors engaged a comparative analysis of types and methods of tax incentives for small business and innovative business in global practice. It is concluded that the stimulating function of the taxation system in the Russian Federation has low efficiency and that innovative tax incentives are to be introduced. The authors propose a model of small business taxation with an embedded automatic regulator of the degree of tax burden on particular small entities with regard to their socio-economic impact and innovativeness.

The main objective of this paper is to analyse the relationships between world stock market indices. Classical minimum spanning tree approach is used, supported by edge stability analysis via bootstrap technique. Centrality measures analysis is applied for finding hubs in the network. Stock market indices are found to cluster according to the geographical continent they belong to. Hang Seng Index and CAC 40 are argued to be the most influential and important indices in the world. Evidence of large intra-continental and lower intercontinental stock market integration is observed.

For the past 40 years, the most dynamic economies in the world were China and India. From approx. 5% of US GDP level, China grows to 26% and India to 11% of current US levels. The ratio of foreign trade to GDP is similar for both countries as well as capital flows to GDP. So why did China outperform India twice in terms of GDP growth and why is India first now catching up?This is of extreme relevance in relation to implementation of Sustainable Development Goals (SDGs) of Agenda 2030 in which the objective is to eradicate poverty and to enhance economic growth in developing countries. The reduction of poverty in shortest time was best mastered by China over the last 30 years; hence, to put developing countries on the same track is the beginning of the path of their development. A theoretical comparison analysis, backed by observations of China, India, Uganda, and Chad GDP as well as their population growths, indicates that population growth is the major negative enabler of GDP growth per capita of developing countries. Using our drafted methodology, we can assess if certain levels of development aid will be sufficient to overcome the negative GDP per capita pull driven by overpopulation and calculate how much development aid is needed to get countries on sustainable GDP per capita growth path. We ask ourselves, are current SDGs (especially SDG 1, 2, and 8) in developing countries really financially achievable?

The aim of this study is to investigate the long-run equilibrium relationship between economic growth, capital, labor, and government expenditure on education between the years of 1970 and 2012 for the case of France. Johansen co-integration test results suggest the existence of the long-run equilibrium relationship between variables. Existence of the co-integration relationship indicates that capital, labor, and government expenditure on education are long-run determinants of GDP for the case of France. Granger causality test results suggest that there is a bidirectional long-run causality between GDP and gross capital formation. In addition, there are long-run unidirectional causalities which run from labor and expenditure on education to GDP and from labor and expenditure to capital. Results of the study suggest the existence of education-induced economic growth for the case of France.

This paper investigates the usage of currency derivatives and its impact on the exchange rate exposure. A sample of 387 nonfinancial Indian firms listed in the National Stock Exchange of India were studied for a period of 5 years from 2011–2012 to 2015–2016. The currency derivatives data was collected from the annual reports of the sample firms, and the stock price data was collected from Ace Equity and Centre for Monitoring Indian Economy (CMIE) database Prowess. The results of the study indicate that the currency forward contract is the most preferred hedging instrument among the sample firms. The Indian firms showed the lower interest in exchange-traded instruments especially currency futures. This is in spite of the growth in the third-generation innovative and low-cost derivative instruments. This study also provided evidence that hedging using currency derivatives decreased the firms’ foreign exchange exposure level, while the use of foreign currency borrowing was found insignificant in decreasing the firm’s level of currency exposure.

Due to the higher degree of economic openness, the Central and Eastern European countries (CEECs) are more exposed to the external shocks that can be transmitted through international trade channel. The CEECs are one of the most open economies worldwide those have undergone different types of shocks and structural changes during the last two decades. This raise a question: are the CEECs more sensitive to the external shocks compared to most developed countries worldwide? The main findings are that the CEECs with higher share of final domestic consumption and export are more vulnerable to the domestic and global shocks. The CEECs with higher share of gross value added by agriculture, hunting, forestry, fishing, manufacturing, wholesale, retail trade, restaurants and hotels, transport, storage, and communications are more sensitive to different shocks, while these economic activities are focused on domestic market. Higher concentration and diversification of import portfolio of the CEECs affect higher volatility of real GDP. In other words, in the CEECs where import is concentrated on several products and similarity of the import structure between a given CEEC and the rest of the world is lower, volatility of real GDP is higher. In conclusion, the empirical results provide substantial evidence that the CEECs are more vulnerability to the domestic and external shocks.

This article examines the evidences of moral hazard and the determinants of risk-taking among 500 banks in Central Europe, the Baltic, and Balkan region. We analyze moral hazard incentives and investigate which factors impact the risk profile of the banks in empirical relationships between shareholders, bank managers, regulatory restraints, and ownership structure. We find strong link between level of risk-taking and bank manager performance and efficiency, which supports the theoretical argumentation of the moral hazard. The capital requirements and regulatory concerns exhibit significant effect on the risk-taking behavior. A positive relation between government ownership and risk profile is observed in the dataset.

This paper describes the situation on the current residential real estate market in the Czech Republic, which is driven by Prague residential market. We are facing continuous price increase over the past few years. Recently banks came with a new regulation scheme for mortgages, which limits maximum amount could be lent in percentage of the apartment purchase price. This paper analyses if the residential market in Prague is facing new bubble on the market and if this step taken by banks in mortgage lending is caused by defensive strategy or if the market is not facing any big troubles and the change in LTV is just the regulatory step.

This paper describes liability risk management of Central European banks located in the Czech Republic, Slovakia, Poland, Austria and Hungary. We find that liabilities of the analysed banks have similar features and report similar exposure to both liquidity and interest rate risks. Additionally, we discuss the share of demand and term deposits on bank funding and its implications for liquidity and interest rate risk in relation to new regulatory requirements set by the Basel Committee for Banking Supervision. We conclude that these requirements might be challenging for the analysed banks because of their liabilities’ structure.

Insurance undertakings belong to a group of highly profitable financial institutions, which is connected with higher level of tax liability. However, representatives of ruling parties in the Czech Republic are considering an implementation of new sector tax focused on commercial insurance undertakings in order to increase tax revenues flowing to public budgets. Tax efficiency is affected by several factors and trends including tax optimization. The implementation of new sector tax is therefore questionable. In order to assess benefits and negatives of additional taxation, tax efficiency has been verified. Insurance undertakings have been distinguished by market positions reflecting financial results of insurers, and different effects have been taken into account. Comparative analysis of tax efficiency respecting market shares of insurers has established a way to assess a level of tax burden on insurance undertakings in conditions of the Czech insurance market. Results of analysis have offered a consideration of tax adequacy concerning the implementation of new sector tax.

A start of a modern-era financial innovation on capital and financial markets is usually dated around the 1970s. Drawing on two broad assumptions that (i) capital markets are important and (ii) hybrid securities are an important part of capital markets, since hybrid issues exist and continue existing, this article provides a review of all outstanding equity instruments, irrespective of whether listed or private, for all issuers whose shares are traded on the Prague Stock Exchange (“PSE”) in order to determine whether the financial innovations as existing on a more developed capital markets have found their seeds on the market or whether the market is largely ignorant of such developments. This paper is divided into three parts: part one provides a brief description of some innovations in capital issuance; the second part provides a review of equity instruments issued by 25 issuers, in which shares are traded on PSE, irrespective whether those are listed or not; and the third part summarizes findings and concludes that a hybrid instrument has been identified at two issuers only, both foreign ones. The most recent annual reports of respective issuers were utilized for the review, accompanied by other public sources if necessary.

The paper looks into the process of originating and homogenizing the three credit union streams in the Czech lands territory at the time of the Habsburg Monarchy. The strongest from among the credit union streams was formed of charitable societies. The second stream was created through transforming consumers’ cooperatives to district economic credit unions, and the last of the significant streams came to our lands from Germany, in the form of Raiffeisen credit unions. Because of the demand for cheap credits, credit unions soon flourished into a significant group of credit providers, both in terms of the quantity of credits and the volume of provided finances. The main attention is paid to the change in orientation of credit unions after 1873, when Act No. 70, on associations, was passed, significantly influencing the change of originally charitable credit unions to financial institutions providing cheap credits to the general population. This transformation subsequently contributed to unification of the three streams.

The paper provides a research summary on the relation between the levels of valuation multiples and eight criteria of company size. The criteria comprised market capitalization, enterprise value, operating revenues, EBITDA, EBIT, net profit, sum of total assets, and number of employees. Using the linear regressions and correlations, the mutual relationships between the four valuation multiples and the abovementioned criteria were tested. The key conclusions of the research are that there can be observed certain dependence of price to earning valuation multiple on most of the tested size criteria. Low dependence was identified for enterprise value to EBITDA multiple. The results for price to book value and enterprise value to sales multiples proved statistically significant level of neither correlation nor dependence.

This paper analyzes the Gordon Growth Model and its evolution in various studies. A modification of the Gordon Growth Model using corporate income tax and personal income tax is developed. Two equations are presented, one of which is for determining the share price with taxes and the other for determining for the value of growth rate.

This paper investigates statistical significance of earnings stability in the within-company indirect valuation method. We empirically establish superiority of a within-company earnings multiple valuation technique for the relatively most stable companies. Favorable empirical results are robust against different means of operationalization of the stability construct and valuation multiples. Results of this paper indicate that the indirect within-company price-to-earnings valuation yields the most precise and the most accurate value estimates.

This paper deals with the measurement of profit loss stemming from the unfair competition and its negative impact on the brand value of the company ABC Holding in the Czech Republic. Profit loss is the difference of wealth between the state, what the party suffering the damage (unfair competition) achieved, and what it would achieve if the damage did not occur. It is therefore a foregone gain of property which was prevented by the harmful event. Assets (wealth) of the owner of ABC Holding suffering the damage represent the value of its 100% stake in the company, which includes the value of the brand ABC. Therefore, for the purposes of quantifying lost profits in this paper, we first need to quantify the value of the brand ABC affected by the consequences of a damage event and the hypothetical value of the brand ABC under the ordinary course of things. For appraising the fair value of a brand of an unlisted (private) company in this paper, we apply the Verifiable Interdependent Model (VIM), which has been designed specifically for the conditions of the business environment with the lack of empirical data for intangible assets appraisal or their low quality.

The study presents reconstruction of the Czech industrial real estate market model by using expert data applied along the Fischer-Di Pasquale-Wheaton model. Research shows that literature focuses on office, retail, and residential markets, while industrial real estate sector is being completely overlooked. Multiple regression analysis is used to determine linear regression functions of supply and demand at the space market and of industrial portfolio value at the capital market. The paper concludes that the analysis provided a realistic model which can be used for predictions of shifts in industrial property values. Analysis of the industrial real estate market shall continue to allow adoption of the ongoing structural changes connected to e-commerce, shared economy, and industry 4.0. Productivity of space and behavior on the space market are identified as key subjects of further examination within the economics of space and time.

The paper examines the development of financial performance of Czech subsidiaries under the control of EU-listed companies during the period 2009–2014. Summary statistics of individual corporate data indicate that both the domicile of the parent and the industry affiliation of the subsidiary have an impact on the subsidiary’s performance measured either by return on assets (ROA) or by return on equity (ROE). The association of parents’ domiciles and subsidiaries’ industries with performance is also confirmed by the analysis of variance (factorial ANOVA). ROE is significantly higher than ROA; the variability in ROE is, although, double compared to the variability in ROA. Finally, the differential between ROA and ROE is not constant over the sample companies.

As it is known, the statement of cash flows is a crucial part of financial reporting. And cash flow ratios have provoked the attention of practitioners and academic researchers to use to evaluate the performance of a company. This study examines, over the 3-year period (2012–2014), the liquidity position of selected 125 companies of the Sri Lankan economy using cash flow statement ratios and classic liquidity ratios suggested by various researchers. The total number of companies listed in the main market of the Colombo Stock Exchange is 313. Classic ratios were obtained from the Osiris database, and cash flow ratios were calculated by using financial statements of selected companies. The ratios, which I examined, are those current ratio, quick assets ratio, total assets to total liabilities ratio, and interest coverage ratio. Similarly, cash flow ratios examined were operating cash flow ratio, critical needs cash coverage ratio, cash flow to total debt ratio, and cash interest coverage ratio. And for investigation to find out how strong is relationship between classic and cash flow ratios correlation analysis were made. Results, which were got after correlation analysis showed positive relationship between classic and cash flow ratios. However additional t-tests analysis, showed substantial difference. The main point of the abovementioned results suggests that well-known liquidity ratios should not be used only for calculating liquidity since a company can have serious cash flow problems with positive liquidity ratios and increasing profits. Liquidity ratios developed using the statement of cash flows provide additional information or sometimes better insight on the financial strength or weakness of a company.

Czech Republic and other European countries reward inventive employees by specific reward regulated usually by patent law. There is a controversy how much such a reward should be. The authors used grounded theory approach to discover the purpose of remunerating employee inventions today. Based on interactions of respondents with legal experience, we identify the interests of key stakeholders – employees, employers, and state. We explore and balance these interests and identify solid reasonableness of such a reward especially in enhancing the transfer of knowledge from employees to employers. Thus, we suggest employers, whose business is based on innovations, to implement a level of rewards that would be at least incentive for employees to pass inventive ideas to employers. The analysis is based on Czech and Slovak legal framework; however, the results are general in nature and can have implications in other countries as well.

This paper elucidates public finance on the coopetition model of fiscal policy. The mix of competition and cooperation finds the relation between democracy and market. The conjunction of democracy and market is society and its demography. This paper focuses on the field of public economics where a confluence of public finance and demography is investigated. It is coined a fiscal demography, which its primary goal is to discover demographic reason of fiscal processes and structures. This paper announces fiscal demography sensu stricto as the study restricted to nothing but the influence of demography on public finance and fiscal demography sensu largo where the impact of public finance on demography is added to the field of art. This paper drafts the scope of fiscal demography which considers four relations, respectively, between demographic structure and fiscal process, demographic structure and fiscal structure, demographic process and fiscal process, and demographic process and fiscal structure.

The aim of this paper is to analyze the spatial concentration of local government expenditure in the Czech Republic. Expenditure of the regions, municipalities, and voluntary municipal associations in 2003 and 2015 is analyzed using descriptive statistic, cartographic visualization, and Herfindahl–Hirschman index. According to the results, the differences in total local government expenditure per capita among the 14 regions decreased and in no functional area do the current or capital expenditure cluster in a small number of locations. On the other hand, existing differences in the expenditure structure provide arguments in favor of decentralized public investment.

This paper investigates the occurrence and patterns of economic voting in the 2006 election for the Chamber of Deputies of the Parliament of the Czech Republic. I construct multinomial logit models which specify the log odds of electoral support for a given political party as function of the regional economic conditions faced by the voter, controlling for political and socioeconomic factors, and estimate these with opinion-survey data. The results provide evidence of unemployment-based economic voting: other things equal, a 1 percentage point rise in the unemployment rate in the voter’s region increases their probability of voting for the leading incumbent socialist party on average by 0.8 percentage points and decreases their probability of voting for the Green party by 0.5 percentage points. Interestingly, these effects are driven by affluent voters. I conclude that the observed pattern of economic voting is most accurately described by the luxury goods voting model and, to some extent, the clientele hypothesis.

Global wealth has increased significantly in recent years. However, poverty and income inequality has stayed at high levels in some countries despite the global economic expansion in the world during the past four decades. In this regard, extensive measures by national governments and international institutions have been taken to combat with poverty and income inequality at national and international levels. Social protection expenditures by governments are one of the prevailing policies to decrease the poverty and inequality in the world. This study examines the causal relationship between social expenditures and poverty in selected Central and Eastern European Union countries during 2005–2014 period employing causality analysis. We found that there was no causal interaction between social expenditures and poverty in our sample.

In the theory of economy, goods are often split into necessity goods (necessities), which must be purchased for daily life, and luxury goods, which satisfy other needs such as those attributable to social status. Many researches deal with the problem of health-care services – some proved that there are luxury goods, while some proved that health-care benefits are necessity goods. Based on literature review, we have posed the following research hypothesis (H1): income elasticity for health-care spending is lower than 1 in EU countries. We have analyzed the relationship between total health expenditure per capita (THCEPC) and income – represented by gross domestic product per capita (GDPPC). We have also incorporated other variables, characterizing society’s structure: Gini coefficient, a percentage of population at risk of poverty, health state self-assessment, and healthy life years (HLY) indicator, separately for male and female population. We have found that (1) decline in the value of the Gini coefficient increased the level of THCEPC; (2) in the case of the female population, shortening of HLY stimulated the growth of THCEPC, while for male population the relationship was reversed; and (3) income elasticity of THCEPC is equal to 1.17, which means that health-care benefits are luxurious goods, with income elasticity higher than 1. Data were obtained from Eurostat Database, covering the years 2004–2014 (26 countries).

The aim of this study is to examine the moderator effect of strength of auditing and reporting standards on the relationship between corruption and tax burden in the Organisation for Economic Co-operation and Development (OECD) countries. The study was conducted on annual data during the period 2011–2015 about the corruption, tax burden and strength of auditing and reporting standards of OECD member countries. In this context, data of corruption (Corruption Perceptions Index – CPI) were collected from Transparency International – the Global Coalition against Corruption; data of tax burden were collected from International Monetary Fund (IMF) database, and data of strength of auditing and reporting standards were collected from The Global Competitiveness Reports. The study analysed the relationship between corruption and tax burden and the moderator effect of strength of auditing and reporting standards on the relationship between two variables by the panel data analysis. The results of this analysis showed that have significantly and a negative relationship between corruption and tax burden; strength of auditing and reporting standards have significantly and a positive strengthen relationship between corruption and tax burden.

This paper compares information disclosure in annual reports in British accounting regulatory system with information disclosure requirements for annual reports in Continental European accounting regulatory systems represented by Czech accounting. In spite of the fact that legal framework for information disclosure in annual reports, Directive 2013/34/EU, is identical for companies in both systems, in the UK and in the Continental Europe, this paper brings evidence about fundamental differences in information disclosure between systems. Moreover, results from the comparison confirm hypothesis that in countries with widespread ownership of companies by shareholders who do not have access to internal information, there is a pressure for information disclosure in annual reports.

The paper examines an origin of newly accepted lease accounting rules under IFRS 16. In historical context, searches for circumstances that had affected certain steps made by IASB in whole developing process of the new standard include also FASB’s role and perspectives. The conceptual lease accounting approaches are discussed in general in context with existing rules set out in IAS 17. The originally proposed innovative lease conceptual models are being analysed and compared in perspective of newly accepted IFRS 16. The substantial change of lessee accounting embodied in IFRS 16 has its origin in the proposed single approach by G4+1 in 1996, resp. 2000. The proposal of symmetrical solution for lessor accounting wasn’t finally achieved due to its complexity and lack of prospective benefits. Finally, the 10-year joint project of IASB and FASB on improvement of lease accounting did not result into two same standards.

The article discusses the nature and material scope of intangible assets. The author presented that these are key factors in the process of doing business in the global market. The paper also presents possibilities of their identification in the accounting system. To solve the presented problem, the author used methods of analysis of literature, content of legal regulations, and a method of comparison and inference.

For many years, the intangible assets are becoming an increasingly important source of competitive advantage between contemporary enterprises. This limits the relevance of financial measures based on data from traditional financial statements and increases the need for hard data on intangible assets. One such area is human capital (HC). The article is a response to the emerging information gap. The article presents a method for measuring HC, along with the outline of the reporting system, which is illustrated using a practical case. The last part of the article presents the results of a case study of the Polish company. It includes a simplified report on (HC) and examples of basic financial indicators taking into account the data on the (HC).

Our paper strives to analyse quantity and content of voluntary disclosures relating to human resources within annual reports of the largest corporations domiciled in the Czech Republic. In this context, we distinguish disclosures on social responsibility (which are interesting especially for stakeholders like employees and unions) and disclosures related to human capital (which are interesting especially for shareholders). Joined analyses of these two intertwined areas are infrequent because scholars usually aim their attention either on social responsibility reporting or human capital reporting. Our paper uncovers characteristics of reporting on both social and human capital aspects of human resources in the Czech Republic and thus addresses the research gap. Specifically, we quantify the amount of voluntary disclosure on human resources in annual reports of the 50 Czech largest corporations. We found that in analysed annual reports, voluntary disclosure on human resources relates primarily to social information.

The aim of this paper is to analyze the pricing of audit fees in the Czech Republic, and the main emphasis is placed on the relation between audit and non-audit fees. The analysis is based on the annual reports of the listed companies on the Prague Stock Exchange on 31 December 2015. The analysis represents the regression model that is used in the international research. Besides non-audit fees the regression model contains client size and various types of risks that has to be considered during audit. The analysis shows no statistically significant relation between audit and non-audit fees in the Czech Republic, but the audit fees are mostly dependent on client size.

The crucial issue, when assessing the going concern and recognizing deferred taxes, is making the correct judgement about the company’s foreseeable future. In this paper, we describe an experiment which tests how accounting standards users make their judgements about deferred tax assets recognition for companies facing serious going concern threats. The results revealed that a knowledgeable group of IAS 12 standard users is willing to recognize the deferred tax assets and create profits in the process even when a company faces going concern threats which are clearly communicated by the management. Explaining the nature of such behaviour would require further research.

Because the Czech Republic adopted the IFRS for the individual reporting publicly traded companies as well as other companies which are a part of the consolidation under the IFRS, this fact offers the adoption of the IFRS also for taxation supported by the existence of the CCCTB and its possible future acceptance in the EU. The main goal of this paper is to show the research results obtained by a survey made between publicly traded companies in the Czech Republic. This research is based on the IFRS adoption by the companies – a way of the IFRS integration into a company information software, advantages and disadvantages of their adoption, problems in using of these standards, and an attitude of companies to the tax base calculation under the Czech accounting principles instead of the IFRS, which are applied in the individual financial reporting.

This paper seeks to assess whether the issuers of listed securities report in accordance with IFRS 5 and whether they do it correctly. IFRS 5 is related to the special reporting of assets held for sale and discontinued operations. It requires the entities that follow IFRS accounting rules to use special methods and principles for such items. While bearing in mind the considerable differences between Czech GAAP and IFRS, many Czech entities are unaccustomed to differentiating between normal assets and assets held for sale as well as providing a separate reporting for some of their operations. However, entities that issue listed securities are obliged to prepare and present their financial statements in accordance with IFRS and should therefore apply the IFRS 5 accounting standard.

This paper examines the relationship between the risk premium on bank bonds and banks’ financial ratios. It also tries to show that bonds issued by banks with strong fundamentals offer less premium as they are perceived to be less risky by investors. Components of CAMELS rating methodology are used to establish the link between a bank’s financial ratios and the risk premium on their bonds. Financial ratios of 11 Turkish banks, which issued bonds between the years 2012 and 2016, are calculated. This study investigates the links between bond premiums and financial ratios with k-means cluster and discriminant analysis. It also shows the importance of fundamentals on the level of risk premium paid to bond investors by banks.

The basic principle of the creation of accounting provisions and allowances is the principle of prudence and a true and fair view of the entity. The allowances are used to express a temporary reduction in the value of assets, while the provisions are a source of increasing costs intended to cover future debts or expenses, of which purpose is likely to incur but the amount or the date on which they arise are uncertain. There was a questionnaire survey, which was attended by 673 enterprises. The goal was to determine whether the size and scope of enterprises are linked to the creation of provisions and allowances. It was not found out that the creation of provisions and allowances depends on the size and industry of enterprises. The different types of provisions and allowances and their representation in enterprises were also examined. It was found out that 39% of businesses have never created any provisions and allowances. Most often nontax provisions (21%) are created. As a result, insufficient creation of provisions and allowances was found out.

This paper discusses the subject of revenue recognition in the public hospitals arising from provided healthcare. In its first part, the paper examines this issue within the context of the contemporary literature on the introduction of the accrual principle to the public sector accounting and the role of IPSAS in this process; in the following parts, the paper presents a comparison of the national accounting regulation with the international accounting standards approach on an illustrative example. The conclusion then summarizes the findings from the literature review and underlines the role of accrual accounting basis in the process of improving the public hospital management.

Performance measurement comprises several metrics and applications used as a benchmark in business sectors for both internal and external users. For managers, it expresses whether company’s targets are reached and as a way of evaluating risks and returns for shareholders. A variety of performance measures are utilized to almost every operational process, and the area is rather vast. Therefore, the aim of the study is to find out what kinds of financial tools are better linked to market value. The result of the study shows that financial measures appear to be favorable measures for companies providing relevant and meaningful information to shareholders. Especially, return on investment (ROI) and earnings are significantly relevant to market value, while the superiority of EVA still remains unclear. Above all, companies still prefer traditional financial measures to other financial tools.

This paper deals with the relation between the use of business intelligence (BI) solutions and corporate performance. The content is based on the research, analysis, and synthesis of findings published on this topic in scientific journals. The majority of papers published on this topic begin by introducing the concept of BI, its components, and possible benefits. As could perhaps be expected, two groups of papers can be identified: (a) review papers of existing research and (b) publications of original empirical research findings. Authors of the former group of papers tend to almost unquestioningly support the notion that the introduction of BI solutions is mainly beneficial to companies; authors of the latter group of papers are somewhat divided in their view on this matter. On the one hand, their findings support the notion BI solutions do seem to have positive influence on corporate performance; on the other hand, they warn that there may be more factors coming into play that are to be considered more carefully.

The growing popularity of integrated reporting is becoming the trend of the best practices among successful companies. Transparent and clear reporting allows attracting additional investment, conducts a better business management, and focuses on sustainable future. Control of the company’s sustainable development is a complex and important management task that is possible to handle through ensuring economic security. In order to do this, companies are encouraged to track key performance indicators in the current period and give accurate forecasts. The main idea of the article is driven by the need to improve aspects of forecasting methods of quantitative and qualitative indicators based on integrated reporting in order to ensure economic security and improve the quality of made on their basis management decisions. In this article, a major Russian oil company PJSC “LUKOIL” is being analyzed. The authors conduct their research based on integrated annual reports of the company for the last 5 years. Several forecasting methods were used to estimate future values of several economic security indicators, including simulation, fuzzy sets, and expertise. In combination, they should give more accurate results, therefore suggested by the authors to be used as a possible model in similar calculations to carry out a better decision-making for business management.

The aim of the article is to present stages of controlling system implementation with some suggestions on who and how should one perform them. This article is based on a case study, and it is based on the data obtained during practical implementation of the controlling system in enterprises. The methodology described in this paper may be implemented in various projects from different areas.

One of the key requirements of today’s management accounting is the identification of the scopes of responsibility for the costs. There is a theory that to each cost, there should an assigned person who is responsible for it (Leszczyński Z, Wnuk T Controlling, Fundacja Rozwoju Rachunkowości w Polsce, Warszawa, p 12, 1999; Sojak S Rachunkowość zarządcza. Dom Organizatora, Toruń, p. 645, 2003; Drury C Rachunek kosztów. PWN, Warszawa, pp 416–417, 1998; Nowak E Zaawansowana rachunkowość zarządcza. PWE, Warszawa, p 12, 2009). The responsibility should be borne both from the operational and from the strategic perspective (Świderska G Rachunkowość zarządcza i rachunek kosztów. Diffin, Warszawa, p 12, 2003; Szydełko Ł Rachunek odpowiedzialności w strategicznych jednostkach biznesowych, Zeszyty Naukowe politechniki Rzeszowskiej, Nr 248, Rzeszów, p 2002, 2002). In practice, however, the fulfilment of those requirements is not that easy. To satisfy them, various types of responsibility for costs need to be defined. Then, specific tasks that need to be performed by particular persons must be detailed. This article aims to determine the issues.

Sustainability report informs of social, economic, and environmental aspects of a public company. Non-financial report is used as a management accounting tool of rational and prudent corporate strategy. This type of reporting helps businesses to establish effective engagement with stakeholders. Stakeholders are crucial to success of every project. The purpose of the study is to define factors gathered from management accounting information that may affect quality of stakeholder engagement. The article is devoted to several practical aspects of non-financial reporting in public companies. The authors analyze factors affecting quality of stakeholders’ engagement and feedback on standards-based GRI; reveal the impact of the company’s most important components of sustainable development; and identify internal and external benefits from sustainability report. It is true that non-financial report provides a better understanding of risks and opportunities for both management and stockholders, reducing costs, increasing efficiency, and improving reputation and brand loyalty. That also comes from the latest instructions sent to Russian Parliament by the President to prepare regimentation of non-financial information disclosure for large companies by the end of April 2017. The study results prove that sustainability report allows management to create feedback, improve company’s reputation, and increase ratings. However, there are some problems to be solved.

Calls for more frequent application of the second-generation statistical methods such as structural equation modeling (SEM) have emerged in the field of management accounting recently. The aim of this article is to compare these statistical methods to the first-generation methods using the real-life example. Specifically, the relationship between the organizational capabilities and perceived nonfinancial performance is investigated. Firstly, the sequential combination of principal component analysis and regression analysis is deployed to the outlined case example. Secondly, partial least squares structural equation modeling (PLS-SEM) is applied to the case example. The comparison of both approaches proves SEM to be more vigilant statistical method for capturing the strength of relationship between latent constructs.

It has always been important to anticipate the demand for a product. To determine the demand for any product, the parameters such as the economic situation and the demands of the rival products are used generally. Especially in the housing sector, which is the locomotive sector for emerging countries, it is critical to anticipate housing demand and its relationship with economic variables. Because of that, economists, real estate developers, banks, development and economy ministers, and land registry cadastral directorates of the countries have focused on explaining housing demand with economic variables. Therefore, the existence of effective model for prediction is very crucial for policy makers in the sector. For these reasons, the aim of this study is estimating housing demand based on relationship between housing sales transactions and important financial indicators using adaptive neuro-fuzzy inference system (ANFIS).

Recent public debate concerns about tax competition in the European Union. There is a widespread belief that reducing the rate of corporation tax will increase foreign investments (small economy) or reduce capital outflow (large economy). This paper examines changes to the corporate income tax as a tool of tax competition among countries of the European Union, especially against the background of the prevailing tendency to harmonize the tax systems of the EU Member States. It cannot be a straightforward way to assess tax competition only through the prism of tax rates as a phenomenon of positive or negative. Also, the analysis tends to the conclusion that for entrepreneurs it is important not only to the level of tax rates.