This master's thesis deals with leases accounting in different accounting systems -- specifically comparison to czech accounting rules, IFRS for SMEs and US GAAP. The emphasis is put on leases accounting in small and medium-sized enterprises, therefore I was looking for an ideal way how to account leases within SMEs in Czech republic. An important chapter of this thesis is the process of leases accounting harmonization, which still continues and is trying to make the most faithful image of the company. Practical part of this thesis is made via questionnaire and it deals with an attitude of SMEs in Czech republich to implementation of IFRS for SMEs and to leases harmonization between IFRS and US GAAP.

I examine the impact of the trend of private class actions targeting alleged violations of generally accepted accounting principles (GAAP). I document the specific allegations in GAAP lawsuits and find that allegations involving revenue recognition and asset impairment recognition are two of the most common areas of GAAP cited. I test whether lawsuits lead to a reduction in the allegedly improper behavior, whether sued firms and their peers make other financial reporting changes, and whether these changes change firms’ stock price characteristics. I find that following relevant lawsuits, sued firms, firms in the same industry, and firms with a shared auditor generally exhibit less aggressive revenue recognition, but firms may increase aggressive revenue recognition in certain cases. Next, I examine the impact of asset impairment recognition allegations on the reporting of negative special items. I find few changes directly associated with these allegations but show that other litigation is associated with both increases and decreases in the propensity and size of negative special item reporting. I note that GAAP violations most often arise in an attempt to meet or beat analysts’ estimates, and I show following litigation firms are often more likely to beat analysts’ expectations by a larger margin. I also find significant increases in real earnings management of sued firms and their peers following many lawsuits, indicating a shift away from accruals-based management towards real activities management. Finally, I find mixed evidence of changes in stock return attributes. In some cases I observe significant changes consistent with reduced litigation risk and in others I observe the opposite. The results have implications for accounting standard setting and show that the legal system plays a critical role in shaping the financial reporting environment.

Master of Agribusiness / Department of Agricultural Economics / Allen M. Featherstone / PS International (PSI) is an international trading company that specializes in the trading of bulk agricultural commodities. It has global strength to both export and import a variety of agricultural products using affiliated offices positioned throughout the world. To adapt to competitive pressures, advancements in technology, and economic conditions, privately-held companies are re-structuring their business by acquiring or partnering/merging with other companies. This results in a redefinition of the assets, operations, and relationships with the stockholders. The acquisition of a private company by a publicly held company creates unique issues because the newly acquired private company must meet SEC accounting standards. One example of this is the acquisition of PSI by Seaboard Corporation, a publicly traded company. In 2010, the owners of PSI sold fifty percent share of the company to Seaboard Corporation. Today Seaboard Corporation owns 80% of PSI. This research problem is based on the challenges that the acquisition of a private company by a public company faces. The focus of the analysis was on the accounting changes in the area of accounts receivable, in particular when revenue is recognized. PSI used cash basis accounting and Seaboard is required to use an accrual method that required a modification in PSI’s accounting system. This research investigates the impact of those changes on PSI’s accounts. The main factors used for comparison of revenue recognition under the cash and accrual method were departure date, transit time and payment terms. The comparisons were based on a data from 196 deliveries made in 2012. In the cash method, revenue was recognized for all the transactions during the month of shipment departure. This revenue was included whether or not the transactions were paid in full and whether or not the cargo arrived at its destination in the same month. In the accrual method, only 20.92% of the transactions were recognized in the current month of shipment, because revenue must be earned and realizable to be consistent with the SEC criteria, otherwise revenue must be deferred until the payment is collected. Therefore, as the result of applying either the cash or accrual method in the income statement, transaction will be recorded as accounts receivables and/or deferred transactions. With the application of the accrual method, the working capital calculation and the annualized margin must take more into consideration by managers, the trading staff and logistic staff.

In this dissertation, I examine the changes to the nature of the accounting paradigms of U.S. GAAP and International Financial Reporting Standards (IFRS) over the course of the U.S. GAAP and IFRS convergence project. I further examine whether the changes to the nature of IFRS following convergence impacts the financial reporting quality. The motivation for this study is to provide an initial review of the progress of the convergence process between U.S. GAAP and IFRS that aims to converge both sets of standards towards more principles-based paradigms. The ultimate goal of the convergence process was the development of globally recognized high quality financial reporting standards (FASB, 2002) and the development of principles-based accounting standards was identified as an essential component of such a goal. Extant literature and professional practice agree that U.S. GAAP is more rules-based whereas IFRS is more principles-based. Thus, both the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (FASB) agreed that the convergence process would be an ideal vehicle to converge both sets of standards towards more principles-based paradigm. I document that over the course of the convergence project, the underlying accounting paradigm of U.S. GAAP has remained consistent whereas the accounting paradigm of IFRS has become more rules-based. Amendments to existing International Standards and newer standards added over the course of the convergence have moved IFRS towards a more rules-based nature which was not the intended outcome of the convergence process. I further examine if the changes in rules vs. principles-based nature of IFRS has impacted the accounting quality. Using a firm level instrument developed in Folsom et al. (2016) that measures the extent to which firms rely on principles-vs –rules-based accounting, standards I find a relation between firm reliance on principles-based standards and earnings persistence. I also find an association between firm reliance on principles-based standards and earnings ability to predict future cash flows as well as concurrent returns. More, importantly the results of my study provide initial evidence that these associations are significantly manifested in the post-convergence period.

Práce hodnotí státní regulaci účetnictví a účetního výkaznictví v ekonomickém kontextu. Zabývá se dopady jednotlivých regulačních mechanismů na kvalitu účetních standardů a zvažuje alternativy státní regulace účetnictví. Hodnoceny jsou systémy US GAAP, IFRS a národní regulace účetnictví. Vzhledem k těsné souvislosti tématu s kapitálovými trhy je věnována pozornost také specifikům burz cenných papírů.

This thesis aims to describe the system of financial reporting in the UK, certain aspects of the preparatory phase of the IFRS implementation process, main problems related to the implementation and impact of IFRS implementation on british companies.

This thesis deals with methods of improvement of financial statements of European banks and their impact on the economy. The financial statements are the principal information source used by external users when making economic decisions. The thesis is focused on analysis of impairment of financial assets and insufficient creation of provisions for credit losses, on faire value and amortized cost measurement of financial assets, macrohedging of interest rate risk, reporting of goodwill and on derecognition and transfer of financial assets. The thesis investigates major differences between US GAAP and IFRS. Initial hypothesis are set down at the beginning of each chapter. These are confirmed after the analysis of the academic literature, primary resources and empirical data. The thesis confirmed the principal assumption that financial reporting under IFRS provides to European banks several ways how to improve their financial statements, which contradicts to the requirements of fair and true view of economic situation of entities. Low-quality financial information can lead to instability of the financial markets, which does not contribute to the economic growth.

The thesis deals with the topic of the transition from IFRS compliant reporting to the reporting based on the Czech GAAP, which is not sufficiently covered by Czech accounting legislation. Many companies may face these problems in the future, some companies has even had to deal with it, and therefore it is necessary to create rules covering the transition, which the companies would have to follow. The theoretical part focuses on the creation of the rules for the transition of the reporting. The practical part illustrates the transition on selected items of the fixed assets from the financial statements of the company České Dráhy, a. s. Namely the area of tangible fixed assets, e. i. property, plant and equipment, investment property, assets held for sale and assets leased under finance leases and the area of investments in subsidiaries, associates and joint ventures. The last part of the thesis describes the impact of the transition from IFRS compliant reporting to the reporting based on the Czech GAAP on deferred tax.

The thesis investigates the importance of balance sheet in the Swiss financial reporting. At first it shows, on a theoretical basis, which is represented by balancing theories, the essential role of the balance sheet for recipients of accounting information. It also deals with the accounting legislation in Switzerland, general accounting principles, financial statement and its appurtenances and projection of selected balance sheet items. Moreover it examines the information capability of the balance sheet on the practical example of a Swiss company.

Master’s thesis deals with the analysis of the Czech modification of accounting, it’s setting into the context of the European accounting and Generally Accepted Accounting Principles – U.S. GAAP. The aim of the thesis is to demonstrate the differences in accounting practices and the overall concept of accounting. It also assesses the measure of harmonization of accounting required for the objectivity of investor’s decision.