FINANCIAL ACCOUNTING IN A SIMPLIFIED EXTENT AS A SIGNIFICANT COMPETITIVE FACTOR OF SMALL AND MEDIUM ENTERPRISES

Small-scale enterprise concerns physical entities or legal entities. In the Czech Republic, similar rules of evidence and information system solution apply to physical entities and legal entities. Physical entities mostly use tax evidence and legal entities use accounting, they become accounting units and they keep accounting in a simplified extent. From the point of view of higher information function physical entities can and in certain cases have to use accounting evidence and they also become accounting units. In practice, the simplified extent of keeping accounts often coincides with tax accounting. It subsequently leads to a distortion of the information function of accounting, which has a potential for a wider use. Properly kept and interpreted financial accounting provides interested subjects with important information that in its consequence can lead to strengthening their competitiveness.