eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2017-08-01 15 147 385 394 10.20869/AUDITF/2017/147/385 9540 article Furkan BASER furkan.baser@ankara.edu.tr 9 Soner GOKTEN sgokten@ankara.edu.tr 10 Pinar OKAN GOKTEN pinar.okan@gazi.edu.tr 11 Ankara University, Turkey Baskent University, Turkey Gazi University, Turkey Classification of firms according to their financial health is currently one of the major problems in the literature. To our knowledge, as a first attempt, we suggest using fuzzy c-means clustering algorithm to produce single and sensitive financial health scores especially for shortterm investment decisions by using recently announced accounting numbers. Accordingly, we show the calculation of fuzzy financial health scores step by step by benefit from Piotroski’s criteria of liquidity/solvency, operating efficiency and profitability for the firms taken as a sample. The results of correlation analysis indicate that calculated scores are coherent with short-term price formations in terms of investors’ behavior and so fuzzy c-means clustering algorithm could be used to sort firm in a more sensitive perspective. http://revista.cafr.ro/temp/Article_9540.pdf Accounting numbers financial analysis financial classification Fuzzy c-means (FCM) clustering algorithm eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2017-08-01 15 147 395 417 10.20869/AUDITF/2017/147/395 9542 article Ewelina ZARZYCKA ezarzycka@uni.lodz.pl 7 Justyna DOBROSZEK justyna.dobroszek@gmail.com 7 Cristina CIRCA cristina.circa@e-uvt.ro 8 Alina ALMASAN alina.almasan@e-uvt.ro 8 University of Lodz, Poland West University of Timisoara, Romania The current paper aims at testing the existence and the strength of the relationship between selected variables and the managers’ assessment of the information provided by the management accounting system (MAS), based on a contingency approach. In order to achieve the objective of the paper, we employed the correlation analysis with the purpose of investigating the strength of the relationship between the assessments made by managers with respect to the suitability of the management accounting information and certain variables (the company profile, the manager profile and the operations of the management accounting department). In this context, we used the data collected from randomly selected managers active in companies located in two Central and Eastern European countries, i.e. Poland and Romania. We found moderate relationships to the assessed suitability of the MAS information only for two of the three variables: the manager profile – mainly with respect to the managed department, and the operations of the management accounting department – mainly with respect to the frequency of the meetings between the manager and the management accountant. http://revista.cafr.ro/temp/Article_9542.pdf Managers’ perception management accounting contingency factors correlations eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2017-08-01 15 147 418 429 10.20869/AUDITF/2017/147/418 9543 article Doina PRODAN-PALADE doina_prodan_palade@bau.edu.jo 6 Alexandru Ioan Cuza University, Iasi, Romania The purpose of this research is to study the ability of artificial neural networks to forecast the companies’ risk of financial distress. We predicted the bankruptcy risk using the associated financial ratios (overall liquidity ratio and the overall solvency ratio) and two artificial neural network models based on the backpropagation algorithm. The proposed models were implemented and tested using the PyBrain software and have been applied to 55 companies listed on the Bucharest Stock Exchange during 2010-2014. After a total of 19,944 iterations for the learning stage, the two algorithms converged and the errors obtained during the tests reached the fixed target. The empirical results showed that the artificial neural network models are efficient and reliable in detecting the risk of bankruptcy. The artificial neural networks are very useful in economic analysis when the complexity of data makes it difficult to implement functions that proper describe the link between economic variables. The use of the neural networks method for predicting the risk of bankruptcy is less common in Romania. This study intends to fill this gap in the literature and we believe it could be of interest not only for the companies listed on the stock exchange, but also for investors, shareholders and banks. http://revista.cafr.ro/temp/Article_9543.pdf Artificial Neural Networks; backpropagation; bankruptcy risk; overall liquidity ratio; overall solvency ratio eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2017-08-01 15 147 430 439 10.20869/AUDITF/2017/147/430 9544 article Richard POSPISIL richard.pospisil@upol.cz 5 Department of Applied Economics, Palacky University of Olomouc, Czech Republic Public economics examine the influence of the state on economic equality and efficiency, and on conduction of business entities in connection with the various tax systems and individual behavior in private consumption. Long-term sustainability of public finances is in the interests of society as a whole and therefore is interesing for scientific research worldwide. From a budgetary perspective, the public economy in the Czech Republic is characterized mainly by the state budget, 6,249 municipal budgets and 14 budgets of local government units. These all units are together subject to annual statutory audit, which mainly represents the analysis of the system of the audit informative and monitoring indicators. Analyzed data and indicators were obtained from sources of Czech Statistical Institute and Czech Ministry of Finance with the follow use of absolute and relative indicators applied for each size group of public budget entity. On this basis the paper suggests possible changes and consolidation of municipal and local government budgets in the Czech Republic. http://revista.cafr.ro/temp/Article_9544.pdf Audit municipality local government unit public budget debt deficit. eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2017-08-01 15 147 440 450 10.20869/AUDITF/2017/147/440 9545 article Melinda Timea Fülöp fulop_melinda@yahoo.de 4 Szabolcs Vilmos Szekely szekely_szv@yahoo.com 4 Babeş-Bolyai University, Cluj-Napoca, Romania The study presents relevant aspects concerning the evolution of internal auditing, after the economic recession. The reasons that persuaded the authors to tackle the evolution of the internal auditing function are the timeliness actuality and importance given to internal auditing in the post-economic crisis period. Therefore, at the level of published literature, a series of studies concerning the evolution of internal auditing and its role were analysed. Following the conceptual delimitation and the presentation of the study concerning the published literature, the authors undertook a qualitative study, which covered the perspectives of the internal auditing function. The result of this analysis indicates that even though a series of changes have been undertaken concerning the function of internal auditing, in the recent period, the role and the importance of this function inside the entities will change. http://revista.cafr.ro/temp/Article_9545.pdf Internal audit IIA governance evolution eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2017-08-01 15 147 451 468 10.20869/AUDITF/2017/147/451 9546 article Dinu AIRINEI adinu@uaic.ro 2 Daniel HOMOCIANU daniel.homocianu@feaa.uaic.ro 3 Alexandru Ioan Cuza University of Iasi, Romania Alexandru Ioan Cuza” University of Iasi, Romania Performance reasons in decision making based on business data usually requires a good management of multiple data formats and also processing speed, flexibility, portability, automation, power of suggestion and ease of use. The paper comes with theoretical ideas and practical examples in favor of using the Excel Data Mining Add-in’s for the aforementioned reasons. Most of the examples include figures linked to video scenarios constructed by the authors and part of an interactive online list with eighteen pieces. Together they contribute to understanding most of the requirements to fulfill in order to have valid examples and useful results http://revista.cafr.ro/temp/Article_9546.pdf business and financial data spreadsheets Data Mining (DM) examples eng Chamber of Financial Auditors of Romania Audit Financiar 18448801 2017-08-01 15 147 469 478 10.20869/AUDITF/2017/147/469 9547 article Alexandru BOCIU alex_bociu@yahoo.com 1 West University of Timisoara, Romania Adapting public policies on public utilities to collective expectations of the population has always been a challenge for both central and local public authorities in Romania. The present article aims to highlight issues of applicability limits of the theory of public choice. The general objective of this research is to prove that the practicability of public choice requires conditionality of financial affordability. In this regard we use a theoretical analysis on the possibility and conditions of use of the theory of public choice in practice and an empirical analysis based on statistical data which illustrates an up to date comparison of the payment capacity of the sanitation services, adapted to European standards, of the population of the four counties of the Western Region of Romania, Timis, Arad, Caras-Severin and Hunedoara. We considered relevant to our study official statistics on the age structure of the population, employment, unemployment, social assisted individuals, students and pensioners and the average income of all these categories. The analysis results indicate that there are major discrepancies of the payment capacity and financial endurance between the population of the four counties and that the substantiation of charging public services using the principles of public choice would be unsustainable financially for a large part of the population. After clarifying these issues, the main conclusion of the study is that public choice theory application using the majority’s autonomy is possible only through an association of financial affordability barriers. The relevance of the study is to address and propose solutions to the difficult context crossed by Romanian public authorities to find integrated solutions, so as to develop community services at European level, but at the same time to remain in the sphere of needs and payment possibilities of citizens. http://revista.cafr.ro/temp/Article_9547.pdf Public choice theory development associations Western region public policy policymakers