Abstract
Research background: Globalization is characteristic by many companies which are doing their business worldwide in various tax policies, so they are able to use the possibilities of creative accounting for their own benefit. And although the term creative accounting is concerned mainly with multinational companies, it is not an unknown technique also for local companies. Purpose of the article: The PwC’s Global Economic Crime and Fraud Survey proved that economic crime is constantly evolving worldwide. At present, there is a huge number of frauds, which include corruption, misappropriation of assets, or fraudulent reporting. These papers are focused only on accounting fraud and creative accounting as the way to adjust accounting books and reports. Methods: The aim of the papers is to analyse the detection ability of the Beneish M-score model in the specific condition of the Slovak republic. These specific conditions consider tax minimization as the key factor for creative accounting implementation. The analysis was made with a Slovak company that was legally convicted of intentional manipulation of the accounting statements. Findings & Value added: The consideration of the specific condition in M-score for Slovak republic showed the best detection ability to reveal the frauds. As our study reveals, reduced M – score5 was unreliable in the condition of the Slovak republic and although Beneish consider 3 indicators as redundant it seems that in the condition of the Slovak republic it is important to carefully consider their implementation.
Highlights
If we focus on the theoretical definition of the term entrepreneurship, whether we consider the legal, economic, or social definition of this term, we are constantly considering the term profit – achieving the profit
Globalization is characteristic by many companies which are doing their business worldwide in various tax policies, so they are able to use the possibilities of creative accounting for their own benefit
Commerce is according to Nguyen and Nguyen (2016) the sector with the highest addiction to manipulate accounting statements and we can not leave out the consideration that tax optimization is one of the most frequent motives for creative accounting (Kramarova, Valaskova, 2020)
Summary
If we focus on the theoretical definition of the term entrepreneurship, whether we consider the legal, economic, or social definition of this term, we are constantly considering the term profit – achieving the profit. Most of the modern approaches to this issue emphasize the factor of achieving stakeholders (internal or external) satisfaction, or society, but the term achieving of the profit is still present in these definitions (Strakova, 2020, Valaskova et al, 2020). From this knowledge, we are able to deduce that profit is the main aim of entrepreneurship and that is why many of the entrepreneurs are focusing on the highest rate of profit. The consideration of the specific condition in M-score for Slovak republic showed the best detection ability to reveal the frauds
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