Abstract
There has always been a dilemma whether financial statements are a reflection of the real situation. When financial statements are subject to various conveniences in order to be presented according to the wish of the purchaser, it leads us to the dilemma when and how this happens. This thesis deals with the attempt to start to solve the dilemmas where and when manipulative actions in financial reporting occur. We have carried out researches on selected samples of money losing companies for the period from 2010 to 2013, on the example of financial indicators of the companies which operated in Serbia. Detection of manipulations by means of which loss is hidden in financial statements is very important for the state economy. Under these conditions, development of an adequate method in this area is limited with the international standards of financial reporting. Numerous qualitative and quantitative methods have been used for evaluation of the real and objective components of losses in order to reflect the level of losses in the economy much better. However, in our conditions, there is an universally accepted method which can foresee and evaluate all events and actions that detect hidden losses in financial statements. This thesis presents methods of evaluation (quantitative and qualitative data mining) and how they may be applied in detection of hidden losses in financial statements, by trying to identify a combination of methods which satisfies real needs of a certain task best.
Highlights
During the last 4 years we have dealt with financial indicators of the economy of the Republic of Serbia, which were continuously burdened with reported losses as well as with the fact that the net effect of business economy ended with losses at the end of a calendar year
We have tried to detect those factors of losses which are not visible, precisely, which are hidden in financial statements and which affect proper expression of business results
By the method of reasoning, key balance accounts and circulation indicators, which are mostly significant for detection of hidden losses of Serbian economy, have been determined
Summary
During the last 4 years we have dealt with financial indicators of the economy of the Republic of Serbia, which were continuously burdened with reported losses as well as with the fact that the net effect of business economy ended with losses at the end of a calendar year. Losses of Serbian economy record the growth of 12.260 million euros in 2010, through a projected loss up to 4.716 million euros in 2012, while this loss is smaller in 2013, amounting to 4.115 million euros It should be analyzed separately whether these disclosed data show real losses or more precisely business effects, this is, positive or negative financial results (loss or profit). Hiding through various forms of financial reporting belongs to manipulative methods, by which reporting of negative business effects is postponed (if a business entity is a money losing company) or fictitous positive effects simulated (if a business entity is a money earning company) Such practice, which became domesticated, left significant consequences on Serbian economy. The subject of observation are financial statements for 2010, 2011, 2012 and 2013
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