Auditors perform a very important task within the context of the affairs of a company because financial reporting can only serve its purpose if stakeholders can rely on its accuracy and reliability. An auditor’s duty is to opine whether an entity’s financial reporting has been done according to the requirements of the law. The responsibility of reporting according to the law lies with an entity’s directors. Auditors cannot issue an absolute assurance as to the lawfulness and reliability of an entity’s financial reporting. However when it is subsequently discovered that the financial reporting was incorrect and that fraud has occurred auditors are often blamed and sued for enormous amounts of money for failing to detect material anomalies in the financial reports. These actions are based on the fact that auditors have a duty to exercise reasonable care and skill in the performance of their duties and through their failure to act as such, have caused financial harm to the clients or third parties. The fact that auditors are only required by law to exercise reasonable care and skill and perform an audit according to the standards of the reasonable auditor and not the most meticulous one, is often not regarded or is sometimes deliberately ignored. This clearly represents a problem in our law, namely that the presence of fraud in financial reports does not in itself suggest negligence on the part of the auditor but is apparently often perceived to do so. This research shows that the auditor’s duty of reasonable care and skill does not necessarily entail the duty to detect fraud. The elements of the duty of reasonable care and skill are identified from case law, legislation and international auditing standards. In order to limit the liability of auditors in general it is important to focus also on the elements of fault (negligence), wrongfulness and causation. This research shows that negligence cannot be established merely by the presence of fraud or material misstatements in financial statements. The responsibility for fair financial reporting lies with the directors. This research gives prominence to this fact which often seems to be ignored for convenience and in order to place the blame on the auditors. This research implicitly asks the question, why are auditors being held responsible for material misstatements in a company’s financial statements and not the directors? Guidelines for determining the extent of an auditor’s liability in this regard are formulated in this research.

This diploma work deals with Continuous audit of financial statements. The goal of this work is to describe chosen methods and procedures of this kind of audit. The first part of the text belongs to the description of laws and rules accordind to financial accounting and financial audit. Procedures and methods used in financial audit are described in the second part of the text. I was able to gain such a knowledge of these procedures and methods while working as an assistant of financial auditor in Cyech Republic. This work should be useful for anyone who is thinking about becoming a financial auditor, or an assistant.

The subject matters of this thesis are comprehensive processes of period-end closing and preparing financial statements, performed under the applicable law of the Czech Republic. The first part includes a theoretical framework, summarizing the key operations and procedures that need to be completed before closing the books. These processes include stock taking, analysis of accounts and operations relating to period-end closing, then gross profit / loss determination and finally, income tax calculation. This section is immediately followed by the process of preparing financial statements. The last section of the theoretical part describes the subsequent obligations relating to period-end closing and financial statements, such as audits, annual report or mandatory disclosure. The second part of the thesis describes practical application of the theoretical knowledge in a specific company.

The financial statements represent a comprehensive and standardized document including financial information about the company. The companies need to publish this document in the Collection of Deeds, and since the documents are submitted to the Collection of Deeds in electronic form and are subsequently freely available, any financial statements are generally available to a wide range of potential users. Users of the financial statements can be divided based on their relation to the financial statements and based on level of their knowledge of accounting. The confidence of users in information disclosed in the financial statements is higher, in case the financial statements were subject to audit. The user of the financial statements does not have a possibility of detailed verification of the information presented in it (he cannot inquire the management of the company, inspect the original accounting documents, etc.). In this case, the audit represents ensuring correctness of the information presented in the financial statements and also assurance that the financial statements were subject to the independent verification. These facts enhance the degree of confidence of intended users in the financial statements and this is also the purpose of an audit as defined by the International Standards on Auditing. In accordance with the International Standards on Auditing the auditor expects that the user of the financial statements has reasonable knowledge of accounting and is willing to study the financial statements with reasonable effort. Auditor performs his testing based on certain materiality level that does not have to agree to the materiality level of the user. The risk represents in this case the situation, when the materiality level of the user is lower than the materiality level determined by the auditor. The user of the financial statements has limited possibilities to verify the information in it, however, he is able to verify the link among information presented in different parts of the financial statements and confront the financial statements with other relevant information available. My dissertation consists from theoretical and practical part. In the theoretical part, there are possible verifications described that can be performed by the user of the financial statements and in the practical part, there are the mentioned procedures applied to financial statements of four domestic companies. The subject of my research was financial statements for the years 2006 to 2009. The aim was not only the identification of the risks in the financial statements from the users' point of view, but also monitoring of the development of financial statements in time. The subject of the dissertation was also the verification of the formal correctness of audit reports issued to the selected financial statements (I am registered as Czech statutory auditor by the Chamber of Auditors of the Czech Republic and therefore I am able to perform this verification). The subject of the dissertation was not the verification of the factual correctness of the audit report, this verification is in principle not possible without possibility to look into the audit file. During analysis of selected financial statements I have identified several areas that represent risk of misstatement in the financial statements from the users' point of view. It related mainly to going concern issues, issues relating to completeness of reserves and provisions and risk of possible overvaluation of finance investments and related receivables to subsidiaries. The user of the financial statements should for his better understanding therefore look for other information relating to the company from freely available resources and perform comparison with financial statements of other companies in the same industry. The risks mentioned above were not sufficiently commented in the notes to the financial statements and that subsequently gives a rise to questions on financial statements users' side and lowers his confidence in information presented in the financial statements. I think that there is a change in the audit approach necessary, it should not be enough just that the financial statements are free from material misstatement; the financial statements should not give a rise to additional questions from their users.

Diploma thesis is focused on analysis of selected audit procedures. Theoretical definition of conditions for statutory audit and necessary requirements according to standards on auditing are featured in the thesis. It analyses audit risks and the concept of materiality during audit. Descriptions of audit procedures are focused on cash and cash equivalents, property, payroll expenses, equity, accounts receivable, accounts payable and physical inventory inspection.

This main content of this thesis is focused on analyzing the fullfilment of the obligation to publish information by selected companies in the Czech Republic (specifically financial statements). The theoretical part describes the legislative framework and discusses the merits of statutory disclosure obligations. The practical part consists of two main parts: analysis of the source data obtained from public register and the evaluation of the questionnaire survey carried out on a representative sample of businesses of two groups; those who fullfil regular information duty and those who haven´t submited those documents to the Registry Court yet or didn´t submit them in the right time. The analyzed current situation, possible solutions and areas for improvement are described in conclusion.

M.Com. (Accounting) / This study examines the disclosure of taxation in company financial statements. The following aspects were discussed: (a) The taxation expense in the income statement comprises of a current tax charge and deferred tax provision. (b) The extent of the recognition of the tax effects of timing differences in company financial statements. (c) The alternative measurement methods which can be applied to either partial or full allocation. (d) The effect of tax allocation on company financial statements 1n the United Kingdom, Canada and the United States of America. (e) Discounting of the deferred tax credit. (f) The development of generally accepted accounting practice ln South Africa relating to tax allocation. The discussion indicates that the South African statement with regard to the disclosure of taxation, promotes the usefulness of published financial information even though it is not free of criticism. A number of recommendations are made by which the problems currently being encountered with the South African statement on the disclosure of taxation in company financial statements, can be addressed.

M.Com. (International Accounting) / This study is conducted as a result of the increased focus on integrated reports (IRs), more specifically focusing on the current integrated reporting practices within the mining industry of South Africa. There has been a rapid increase in accountability pressures on companies due to financial crises across the globe, accounting and remuneration scandals, and suspicion about the social and environmental implications of businesses (Kolk, n.d.:2). Accountability is specifically discussed by the Integrated Reporting Committee of South Africa (SA IRC) as follows: Now, in the context of the global financial crisis and amidst increasing evidence that the current economic model is socially and environmentally unsustainable and that current reporting practice is not delivering, it is time for new and more effective forms of accountability (SA IRC, 2011:1). This form of accountability also flowed over into the mining industry in which the current reporting practice is not having a significant impact on the perception of the mining industry. The South African mining industry is also currently in crisis, and the market fears further disruption of mining output due to the uncooperative trade unions (Kantor, 2013). Current reporting practice is not highlighting these issues or the long-term impact thereof on the mining industry and individual companies. The two major obstacles that any mining company has to overcome are, firstly that the board of directors needs to report to a wide range of stakeholders with different needs and expectations, and secondly the directors have to report on the sustainability of the industry while managing the mining company’s risk and generating a return on shareholders’ and investors’ investments. Union leaders, investors, and shareholders do not currently share the opinion that the mining industry is in crisis as there are clear mismatches between what the union leaders demand, what the shareholders and government can offer, and what the industry can afford (Kantor, 2013). The mining companies’ extraction of scarce resources is not sustainable and this can have a direct and indirect impact on various stakeholders.

The concept of control and its conceptions are an inportant factor in preparing the consolidated financial statements. The existence of the control directly determines a consolidation unit and also form of the consolidated financial statements. The concept of control states a controlling entity, that is required to prepare consolidated financial statements. The evolution of the concept of control shows to differences in capture of some entities in consolidated financial statements due to the classification as a controlled entity. Non-inclusion of controlled entities in the consolidated unit have a direct impact on the explanatory role of the consolidated financial statements. In case of unrecording some entities are talking about off-balance financing, which often are referred to special purpose entities. The thesis compares and analyzes the impact of various control concepts conceived in IAS / IFRS.

In my work I focus on accounting firms engaged in road transport. The aim of my work is to capture and describe the accountin practices in this area of business. the first section describes the general legal and economic conditions for the company to do business in this area. The main part is devoted to the actual accounting practices mainly illustrated by concrete examples of specific companies, as well as procedures for the proper preparation of the financial statements. At the end of the financial analysis attached statements.