Specifics of IFRS Adoption by Czech Private Companies
Procedia - Social and Behavioral Sciences
The paper assesses the influence of IFRS adoption on management accounting of Czech unlisted companies under foreign control belonging to groups, for which consolidated financial statements in compliance with IFRS are prepared. As these Czech subsidiaries prepare their statutory accounts in compliance with Czech GAAP, IFRS are incorporated into management accounting in order to optimise reporting system costs for meeting information demands of all interested parties. The paper investigates the
... erception of management on the importance of IFRS for internal decision making. Our results, based on questionnaire survey, show that forced IFRS adopters steadily integrate the IFRS principles into management accounting subsystem. IFRS influence is derived from the structure of executive compensation schemes constructed by parent companies and has impact primarily on the definition of key performance indicators and other financial targets. We find also evidence that with increasing number of areas, in which management accounting utilises the IFRS-based measures, the (subjective) perception of their importance increases, too.