Proceedings

• How do you evaluate readiness of auditors for voluntary application of the IFRS?
• How do you evaluate readiness of accounting software developing firms for
voluntary application of the IFRS?
Table 2. Readiness for voluntary application of IFRS by non-listed companies
Certainly not Rather not Rather yes Certainly yes
Entities 0% 10% 40% 50%
Accounting firms 10% 30% 50% 10%
Auditors 0% 50% 50% 0%
Software firms 10% 80% 10% 0%
Despite the fact, that the research is not fully representational because of restricted
size of the sample, certain tendencies can be derived from the respondents’ answers.
The reactions to the first set of questions affirm a general conclusion about high
number of differences between the IFRS and CAS. According to professional
accountants and auditors, this issue is relevant esp. for manufacturing companies
(which create a significant part of Czech gross domestic product). In addition, entities
providing services usually struggle with revenue recognition as there is no guidance
on this issue (neither general, nor for the construction contracts) in CAS and revenue
recognition is mainly influenced by legal and tax matters.
As far as readiness for voluntary application of the IFRS concerns, companies are on
the top of the list. Companies, currently preparing both sets of financial statements,
should have relatively smaller difficulties when shifting from CAS statutory accounts
to the IFRS. On the other side, it is believed that Czech software firms are not ready
for the transition, which could bring problems for companies considering voluntary
IFRS adoption. ICT solutions for keeping accounts according to the IFRS are offered
by foreign software developers (such SAP, etc.). However, costs of this solution can
be prohibitive for affected companies, esp. for medium sized enterprises.
The possible advantages from a voluntary shift to IFRS in statutory accounting may
be evaluated with reference to experience of Czech listed companies, which have to
apply IFRS obligatory both in consolidated and individual financial statements. There
are about 60 issuers on Prague Stock Exchange, from which were excluded some
issuers such as public sector institutions (Ministry of Finance, City of Prague, City of
Liberec), financial institutions and issuers with domicile located abroad.
Representatives of 23 companies remaining in the sample were asked for filling-up a
questionnaire scrutinizing benefits and costs from the IFRS implementation in their
companies. The benefits mentioned by already-adopters may serve as a useful source
of reference for those companies, who are contemplating about utilising of a new
provision of Act on accounting allowing voluntary IFRS adoption in individual
financial statements by designated entities. The answers of eleven respondents on
benefits are summarized in Table 3.
Table 3. Benefits from IFRS implementation on companies’ level
Certainly Rather yes Rather not Certainly
yes
not
Easier access to financing by share capital 73% 27% 0% 0%
Easier access to financing by bonds 9% 55% 27% 9%
Easier access to financing by bank credits 0% 45% 36% 18%
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