Manipulations of Financial Statements in the Polish Accounting and Role of Financial Audit in Their Detection

41 Pages Posted: 23 Aug 2015

See all articles by Joanna M. Wyrobek

Joanna M. Wyrobek

Cracow University of Economics

Zbigniew Stanczyk

Cracow University of Economics

Date Written: August 21, 2015


Purpose The purpose of the paper was to investigate the usefulness of external audit of financial statements in detecting manipulation of financial statements in Poland.

Design/method/approach The study analyzes and summarizes common techniques used to manipulate financial statements of Polish companies in years 2010-2015 and presents the results of own questionnaire research and indirected interviews regarding usefulness of financial statements audit in detecting these irregularities.

Findings The study shows that financial manipulation is common and that certain frauds would not be discovered during a standard audit of financial statement (for example, when a company purposefully does not record its business transactions). Consequently, during the decision making process, a company has to search for additional information about its market competitors and cooperants to verify the accuracy of the information provided by their financial statements.

Practical implications The conclusions of the research is that obligatory end-of the year audit of financial statements is not sufficient to detect all of the techniques described in this study and that auditors responsibility for not detecting fraud are limited. On the basis of the interviews it seems that a separate fraud audit has to be paid for to increase the chances of detecting manipulations.

Originality/Value The novelty factor of the study is that it summarizes numerous manipulation techniques used in Poland and verifies usefulness of external audit in detecting them. Many of the discussed in the study issues can be found in the business press or learn from accountants and auditors, but in the opinion of the authors there are few academic publications that analyze and summarize them in a comprehensive way. In the conclusions the authors also propose additional preventive measures that can supplement the information provided by the financial statement.

Keywords: audit, fraud, window dressing, aggressive accounting

JEL Classification: G30, M4, K4

Suggested Citation

Wyrobek, Joanna M. and Stanczyk, Zbigniew, Manipulations of Financial Statements in the Polish Accounting and Role of Financial Audit in Their Detection (August 21, 2015). Available at SSRN: or

Joanna M. Wyrobek (Contact Author)

Cracow University of Economics ( email )

ul. Rakowicka 27
31 510 Krakow, 31-510
0048508437766 (Phone)
0048126437051 (Fax)


Zbigniew Stanczyk

Cracow University of Economics ( email )

ul. Rakowicka 27
Krakow, 31-510

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