Application of Chosen Fraudulent Detection Technique in the Slovak Business Environment

¹ University of Zilina, Faculty of Operation and Economics of Transport and Communications, Department of Economics, Univerzitná 8125/1, 01003 Žilina, Slovakia
² University of Zilina, Faculty of Operation and Economics of Transport and Communications, Department of Economics, Univerzitná 8125/1, 01003 Žilina, Slovakia

^* Corresponding author: katarina.kramarova@fpedas.uniza.sk

Abstract

The paper analyses the possibility of applying chosen fraudulent detection technique in the condition of Slovakia and then evaluates its explanatory power. The authors based on the idea that in addition to positive effects of globalization, negative effects on the activity of economic entities are also manifestations of this process. As the society has become more dependent on information technologies, increased globalisation and greater interconnectedness, certain exposure to negatives has expanded right along with them. One of this negative effect is clearly a financial crime of various type, including fraudulent financial reporting. The financial statements should “describe” factually and truthfully the financial and economic health of a company because it is the main sources of information for various type of stakeholders. Handling of it (considering in the context of financial crime) is primary the responsibility of owners or managers (provided the separation of the ownership structure from the management structure). Reasons for doing so are different. Their common denominator is the artificial creation of information asymmetry to obtain different “benefits”. It is therefore logical that the need for constructing techniques that would reveal an unacceptable legal action by a company in a financial reporting process is at the forefront.