Template-Type: ReDIF-Article 1.0 Author-Name: Petr Marek Title: Risk and Its Concept: Scientific and Artistic Abstract: Dear readers, the term “risk” is one of the most frequently used concepts in economic science. The origin of this word is necessary to looking in ancient Greek, where the word “riza” (written “ριζα”) supposedly signified the “root” i.e. a kind of obstacle in the way of which a wayfarer could trip up on his road. In a similar meaning the term later appeared in Latin, which represented a “cliff” on which can ships may break. Then the word began occur in similar form in the other languages in the sense of danger, which traders have to face during transport by the sea. The word “risk” probably entered English through continental Europe to the 17th century. From there, we are close to understanding risk as any danger, whether at work, in politics, in trade, in finance, in life or even in love. In terms of theoretical discussions on the concept of risk the following five questions, which are still the subject of scholarly debate, can be observed. Does the risk represent same concept as the uncertainty? Can we define the risk as probability? Does the risk measurable and the uncertainty immeasurable? Does the risk constituted only by negative deviations from the expected results or also by positive? Does a risk exist without uncertainty? In advance it must be noted that although there may be varied approaches to the definition of a risk, eventually all the authors may be right. In terms of factual logic, each definition would apply only under certain conditions. And in this sense, each author could work with different conditions, whether expressly mentioned or not. Thus it could not be unequivocally said which answer to the questions above is the only right one, since each author has the right to choose his/her own path. To summarize the previous approaches, then the term risk usually means the threat of an event e.g. a trip up protruding root, shipwreck on the reef, or financial losses from unrealized sales, goods damage, failure to pay for delivery, etc. In other words, the risk is “danger that actual results will differ from expected results”1. The concept of the risk is not a concept to which the science would have the exclusive right to explain. Different approaches to understand its nature can be found in the art world. The risk became the subject of many songs, poems, but also artistic, literary or dramatic works. If we look at the lyrics of the songs titled “Risk”, the closest to the scientific definition is country music singer Paul Brandt who compares the risk to a situation of standing on the edge of a cliff, by which he actually gets to the original meaning of the word in ancient Greek.2 Elan group from Slovakia considers the risk, as is most often analyzed in artistic world, as a conflict in coexistence relation between men and women. For a man in love a danger of unfavorable future development of events results from insufficient knowledge of the previous state of the monitored person, and the consequent potential incorrect conclusions.3 In a similar way, the term risk occurs in the Czech songs. However a singer-songwriter and a lyricist, Jaromír Nohavica, also introduces a new indicator for measuring risk, the coefficient of risk, but the exact manner of its construction he has not elaborated yet.4 There are not too many poems dedicated to risk. One of the most interesting and even very often quoted is the poem “Risk” by W.A. Ward5, where he points out that every human activity can lead to failure, and that a man is exposed at least to the risk of ridicule from other people. But the one who does nothing, who does not attempt, actually does not exist. So only the one who risks becomes truly free. In the visual arts the risk is usually displayed as negative deviation from the expected result, as in the image “Estetikum of risks”, by Romanian painter M. S. Oprea, where the figures appear with full of fear of the future.7 P. J. Mills, Canadian painter imagines the risk as an environmental damage which can ultimately lead to the extinction of the planet Earth, expressed in gradually blurring world map. Pages: 4-6 Volume: 2011 Issue: 3 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=22.pdf File-URL: http://www.vse.cz/efaj/22 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:3:id:22:p:4-6 Template-Type: ReDIF-Article 1.0 Author-Name: Libuše Šoljaková Title: Harmonization of Requirements for Professional Competence of Managerial Accountants and Controllers Abstract: The aim of the paper is to comment continuing works on the project whose purpose is to state generally accepted requirements for professional competence of managerial accountants and controllers. In this regard, Draft for a common Statement which defines conceptual outcomes of the project is the subject of comments. Paper concludes that - despite the fact that Draft is the first step only - it brings substantial contributions: it has been leading to better understanding of differences which accompany this profession development in different part of globe and it enables better identification of common features, but also distinctions in profiles and professional orientations of professional accountants, auditors and professional accountants in business and of managerial accountants or controllers whose quality professional development is the principle aim of this project. Keywords: Professional Accountant, Managerial Accountant, Quality Standards, Controller, Professional Competence Classification-JEL: M41 Pages: 7-20 Volume: 2011 Issue: 3 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=23.pdf File-URL: http://www.vse.cz/efaj/23 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:3:id:23:p:7-20 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/23 Template-Type: ReDIF-Article 1.0 Author-Name: Hana Vomáčková Title: Measurement Bases for Acquisitions and Mergers in Financial Accounting and in Commercial Law Abstract: In association with transactions involving businesses, acquisitions and mergers, etc., commercial law stipulates the new measurement of business assets and thus also net business assets. Similarly, financial accounting stipulates the new measurement of assets, liabilities and net assets with an impact on the amount and structure of equity. It is a principal question as to whether the new measurement bases required by both commercial law and financial accounting are in principal identical. Practice convinces us that the concepts provided in legislation (both commercial and accounting) differ in many cases and if a principle of precedence of the legal form over legal nature is applied, problems arise in respect to the main purpose of financial accounting, i.e. achieving a true and fair view. By stipulating the new measurement of business assets, commercial law intends to secure value objectivity of the relations between a company on the one side and its shareholders and statutory body members on the other (or between companies forming economic groups). Financial accounting focuses on new measurement at two levels: objective measurement on recognition - the acquisition of an asset, a group of assets or a business, or objective measurement as at the date of financial statements should the original measurement of the recognition of an asset or a liability would be significantly outdated and not reflective of the actual situation. It is essential that the discrepancies between the perspectives of commercial law and accounting legislation be analysed and removed in order to allow financial accounting to fulfil its basic purpose. Keywords: Commercial law, Acquisition, Merger, Financial Accounting, Measurement base, Purchase method, Acquisition method, Uniting of interest method Classification-JEL: M41 Pages: 21-37 Volume: 2011 Issue: 3 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=24.pdf File-URL: http://www.vse.cz/efaj/24 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:3:id:24:p:21-37 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/24 Template-Type: ReDIF-Article 1.0 Author-Name: Zbyněk Halíř Title: Accounting System and Financial Performance Measurements Abstract: The paper concerns measuring and reporting of financial performance of an enterprise. Currently increasing emphasis is placed on performance measurement and management. Within performance measurement and management in general the role of financial performance is becoming increasingly important. The paper is concerned with measuring and reporting of financial performance of an enterprise primarily from manager’s point of view. In its first part it deals primarily with the connection between the performance of an enterprise in general and financial performance. In subsequent part it is about the relation of performance management and management accounting. The next part of the paper is devoted to the dual concept of financial and management accounting and to causes and consequences of the duality. Then it summarizes the most important developmental tendencies of financial performance measurement and management accounting. Keywords: Performance Measurement, Management Accounting, Financial Performance, Dual Concept Classification-JEL: M41 Pages: 38-65 Volume: 2011 Issue: 3 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=25.pdf File-URL: http://www.vse.cz/efaj/25 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:3:id:25:p:38-65 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/25 Template-Type: ReDIF-Article 1.0 Author-Name: Petr Petera Title: Evaluating the Quality of Rewards Systems Abstract: This paper deals with the issue of desired characteristics of rewards systems and outlines possible ways of their evaluation. Aims of the rewards systems are analyzed and desired properties, components and updating procedures that should be put in place are identified. Rewards system is understood as a tool for supporting business’s goals, attracting, motivating and retaining competent employees. It is stressed that rewards system is an important but not the only tool for reaching the mentioned goals and it should be used congruently with other tools (e.g. proper job design, recruiting, training, creating positive workplace). An encyclopedic preview of rewards types is given, their various classifications are introduced and it is underlined that type of chosen reward should match with the objective that is supposed to be accomplished. Finally, the impact of rewards on motivation and behavior is addressed and a framework for analyzing of incentives (variable payments for performance) is proposed. Keywords: Rewards, Performance, Motivation Classification-JEL: M52 Pages: 66-91 Volume: 2011 Issue: 3 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=26.pdf File-URL: http://www.vse.cz/efaj/26 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:3:id:26:p:66-91 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/26 Template-Type: ReDIF-Article 1.0 Author-Name: Jiřina Bokšová Title: Measurement Issues of Financial Placement and Technical Provisions of Czech Insurance Companies Abstract: Measurement represents one of the most important methodological elements of accounting because it affects the overall informative ability of financial statements. The chosen method of valuation affects not only the amount of assets and liabilities, but the size of costs and revenues of the entity as well; therefore it has a major impact on profit and solvency of insurance companies. Each accounting regulation - whether at national or supranational level - includes relatively thorough provisions related to valuation. In the Czech accounting system valuation is regulated by the Accounting law, which distinguishes between the initial valuation of assets and liabilities (valuation at the transaction date) and the subsequent valuation of assets and liabilities “at the end of the reporting date”. However, the Czech definition of fair value at the national level is different from IFRS at the supranational level, which causes issues with reporting assets and liabilities of insurance companies. By 2015, a new IFRS is expected to be issued, dealing with insurance reporting issues, including “fair value”. This new standard is expected to address current deficiencies in insurance reporting guidance. Keywords: Insurance, Financial placement, Technical reserves, Historical cost, Fair value Classification-JEL: G22, M41 Pages: 92-102 Volume: 2011 Issue: 3 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=27.pdf File-URL: http://www.vse.cz/efaj/27 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:3:id:27:p:92-102 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/27 Template-Type: ReDIF-Article 1.0 Author-Name: Bohuslava Knapová Title: Economic Value Added and Its Benefit for Owners and Managers of the Czech Company Abstract: The paper is oriented to the area of management and decision making of company owners and managers. The absolute synthetic performance criterion Economic Value Added represents the criterion of the residual income and managerially measured profit. Concrete questions must be solved with the ascertainment of this financial criterion as for example how correctly to measure capital costs, how to determine the right amount of the investment capital and return on investment capital, eventually return on assets, or how to work with the time horizon in the measurement of Economic Value Added, because this criterion should be presented also as the important tool of the transformation of strategic targets on tactical time periods and to lower structural levels of investment and profitability responsibility centers. Economic Value Added should serve as one of criteria of investment decision and as criterion of the appraisal of managerial decision making, because just managers are responsible for the economical process and results of the main operating activities. Keywords: Management and decision making, Performance criteria, Economic Value Added, Weighted Average Capital Costs, Owners and managers Classification-JEL: M41 Pages: 103-110 Volume: 2011 Issue: 3 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=28.pdf File-URL: http://www.vse.cz/efaj/28 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:3:id:28:p:103-110 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/28 Template-Type: ReDIF-Article 1.0 Author-Name: Eva Ducháčková Title: Current Issues of Automobile Insurance Abstract: Auto insurance belongs to the most important areas of the insurance market from the quantitative point of view and based on its significance in covering auto-related risks. The significance of damage impact, particularly in liability insurance, requires a high degree of regulation. Standard products, auto liability and collision insurance are following the overall changes in insurance policies and are adjusting to the changing conditions. One of the major issues in the auto insurance in the Czech Republic and internationally is a toughening competition which results in changing insurance premiums. At the same time, new forms of auto insurance are introduced due to technological advances and demands for higher coverage. Keywords: Insurance market, Motor hull insurance, Liability insurance, GAP insurance, Pay-As-You-Drive Insurance Classification-JEL: G22 Pages: 111-122 Volume: 2011 Issue: 3 Year: 2011 File-URL: http://www.vse.cz/efaj/download.php?jnl=efaj&pdf=29.pdf File-URL: http://www.vse.cz/efaj/29 File-Format: text/html Handle: RePEc:prg:jnlefa:v:2011:y:2011:i:3:id:29:p:111-122 X-File-Ref: http://www.vse.cz/RePEc/prg/jnlefa/references/29