M41 - AccountingReturn

The predictive value of tax allocations (deferred taxes) and their incremental power in explaining future cash taxes paid and current tax expenses in the agricultural industry is a topic of significant relevance. This is particularly important for policymakers and managers due to the complexity of accounting standards in this area. The goal of the paper is to enhance the understanding of tax planning techniques used by agricultural companies. We consider four variables crucial in our analysis: dependent (cash taxes paid and current tax expenses) and independent variables (deferred tax assets and deferred tax liabilities). Our modelling of the relationship reveals that current tax expenses have a predictive power to explain variations in the cash outflow for income taxes, making it a relevant factor. Deferred tax assets explain the cash tax outflow, while regression demonstrates the power and relevance of deferred tax liabilities in predicting variations of current income tax expenses in agricultural companies.
Implications for Central European audience: In Central Europe, the business environment and influence of the agricultural sector are similar to those in Serbia. Companies apply the same accounting standard for the recognition and evaluation of deferred taxes according to the IAS 12 standard. The results of this paper could be used by managers in all companies in this industry to apply adequate tax planning techniques to satisfy their tax goals and to minimize tax litigation risk.

The objective is to assess the quality and quantity of non-financial disclosures required by Directive 2014/95/EU for companies operating in the energy sector in the Czech Republic before and after the introduction of the obligation of non-financial disclosure for large publicly traded companies. The information disclosed by companies is the subject of quantitative research. Non-financial information in the form of annual reports or sustainability reports before (2015, 2016) and after (2017–2021) the introduction of the duty of non-financial reporting was the subject of the analysis. The textual analysis of these reports was carried out using IRAMUTEQ software and used to assess the quality of non-financial reporting of Czech energy companies. The quality of disclosures was evaluated in two ways: the length of non-financial reports (number of words, sentences and pages) and the incidence and number of occurrences of identified words. A paired t-test was employed for the evaluation. It was confirmed that those companies that were required to report non-financial information related to their operations in 2017 increased their disclosures in areas with the strongest environmental impact. This method could allow stakeholders to assess the quality of disclosure and its evolution over time with relative ease.
Implications for Central European audience: Companies should offer transparent information about the environmental impact of their activities and how they engage with employees and other partners. Non-financial reporting plays a crucial role in achieving this transparency. Given the substantial environmental footprint of companies in the energy industry, the objective of this paper was to assess whether companies operating in Central Europe provide stakeholders with pertinent information and to examine the impact of the Non-Financial Reporting Directive on the disclosed information.

The objective of the paper is to assess the advantages and disadvantages of costing methods for companies in the engineering sector. We compare traditional costing methods (absorption costing and marginal costing) with the activity-based costing (ABC) method. The analysis is carried out in Slovakia and Czechia. We examine the reasons for the transition to the ABC method and also the reasons for continuing to use the traditional marginal costing method. For statistical analysis, we use the chi-squared test, the chi-squared data distribution test, the Wilcoxon paired test and the Mann-Whitney U-test for two independent selections. We use each of these tests for the individual hypotheses and research questions in accordance with the nature of the specific data appearing under the given hypothesis or research question. Slovak companies are statistically significantly more likely to perceive doubts about the suitability of the ABC method as its disadvantage compared to Czech ones. In the end, proposals for business practice are presented.
Implications for Central European audience: Managers of engineering companies are aware of the role and importance of costing, but they usually do not pay enough attention to the actual compilation and monitoring of costing. We analyse a selected sample of Slovak and Czech companies, but our conclusions and proposals can be generalized and applied in other Central European countries, which have similar political and economic environments, culture and history.

There is a great contrast between the real role of accounting and its public perception. Accounting can be regarded as the language of business operations, but it is also the representative and manipulator of corporate operations and culture. The major challenge of accounting is whether it allows the most honest and knowledgeable managers to make outstanding reporting decisions while preventing the others on the other side of the honesty competence scale from distorting what they know about their company. This study presents the results of the authors’ empirical research about the opinions of accounting practitioners in Romaine on the values, career opportunities and ethical behaviour of the profession. The findings are interpreted at the various levels of accounting professions (administrators, accountants, auditors) by the number of years spent in accounting and groups of internal and external colleagues, focusing on causal relations. The conclusions are drawn through structural-equations-based causal models by the qualification of accounting professionals and the time spent by them in their jobs.
Implications for Central European audience: The paper is examining the role and ethics of accountants within the small and medium-sized sectors. In Central Europe, we have a similar cultural and historical background which might be touchable even in the business environment. Accountants influence how business works and what is disclosed about it. For the aim of a clear view, accountants must behave ethically, and they have to learn about business ethics and professional ethic topics.

More attention is being paid to companies’ environmental performance these days. It includes the consideration of how a company’s business operations affect the natural environment in which it operates. In order to improve its environmental performance, various investments are essential. However, one important question is how such environmental performance investments affect the company’s financial performance. The theoretical background indicates that both positive and negative effects on financial performance are possible; however, previous results show that environmental performance has a predominantly positive effect on financial performance. Considering the importance of environmental performance, the aim of this research is to determine if there is a positive relationship between environmental performance investments and financial performance. Investments in new long-term assets are used as a proxy for environmental performance investments since newer long-term assets are considered to be more environmentally acceptable than the older ones, while financial performance is measured with the business result (net profit or loss). The data was analysed by using multivariate regression analysis. The sample included 150 Croatian large-sized companies. The results reveal that there is a positive relationship between environmental performance investments and financial performance. Therefore, such investments are of interest to both the environment and the company since they help to preserve the natural environment and, at the same time, improve the company’s financial performance.
Implications for Central European audience: The effect of environmental performance investments on financial performance has been tested on a sample comparing companies from Central European country, Croatia. Obtained results can be of interests also for audience from other Central European countries with similar characteristics as Croatia due to common historical features (transitional experience).

Relying on three questionnaire-based surveys from 2004, 2009 and 2013, each covering around 300 top financial managers of different Hungarian manufacturing and service companies, this article analyzes how the perception and measurement of intellectual capital (IC) elements has changed. Instead of focusing on stock exchange prices or case studies of individual firms, this research is unique for using a database on the opinion of top managers over a decade. After the managers, IC has slightly gained importance giving 48-51 percent of the firm value during the years analyzed, still, most companies give little attention to measuring these items correctly. This is dangerous, as by just focusing on traditional accounting measures or relying on outdated methods, top managers are less likely to take shareholder value maximizing decisions. Encouragingly, those who measure do it better: book value has lost popularity while more appropriate market value based estimates have gained importance.

The main goal of this paper is to discuss theoretically and to evaluate empirically the differences of risk and risk management information disclosure (RRMID) among companies listed in Nasdaq OMX Baltic and Euronext Brussels and to determine factors influencing such differences. The authors use analysis and systemization of scientific literature, induction, content analysis and coding procedure for risk and risk management information disclosure assessment, as well as correlation and regression analyses. The results suggest that companies listed in Euronext Brussels disclose more risk and risk management (RRM) information; RRM related disclosures are more qualitative, focused on past or present events and have a neutral meaning in both markets. Companies also disclose more information about risks themselves than about risk management. Finally, only companies' size and presence of audit committee are significant factors influencing RRMID.

Recent developments and changes in the modern economy as well as falls and rises of large corporations have brought up the public interest towards the accounting discipline, and have resulted in a growing demand for accountant specialists as educated professionals. The aim of the present research is to find out what is the role of the accountant in the modern enterprise. The authors conducted a survey among Estonian accounting specialists and managers. The results of the survey clearly indicate that in most Estonian companies, accountants are actively assisting members of the board to make vital decisions, and their competence, knowledge and skills are highly valued by managers. The findings of the survey emphasize that Estonian accountants are highly qualified, keeping in line with the latest developments in the modern financial world.

This paper focuses on the particular case of professional ethics in the context of the accounting profession. After briefly discussing recent events that made us reconsider our understanding of corporate governance, accountancy and ethics, we attempt to delimit the state of the art by looking at ethics from the accounting profession's perspective. When aiming to clarify professional ethics, we closely analyze integrity based on the latest developments undertaken by European professional bodies. The findings are used in identifying ways to contribute to the endeavor of aligning the profession's performance with society's reasonable expectations.