Disproportions in the Description Ability of Prediction Models for Change in the Accounting System

Abstract

The change in the value of financial indicators can be triggered by several factors. A result of a change in the accounting system shows that the company’s achieved financial indicators may change. The reason for the differences is a different way of reporting and recalculation of items in the financial statements, where some items are recognized and classified in a different group of assets than under the accounting regulations in the Slovak Republic. The Balance Analysis of Rudolf Douch (1996), Taffler's model (1984) and Králiček's Quick Test (1993) were used to point out the differences in evaluation based on financial indicators in selected prediction models. The aim of the paper is to analyze the changes that result in the change of the accounting system from national accounting legislation to the accounting system according to IAS/IFRS. We assume that individual items of assets and liabilities or costs and revenues that enter into the calculation of individual prediction models achieved different values due to changes in the method of reporting in the financial statements of the analyzed company for the same accounting period in two accounting systems.