Searchability and Machine-Readability of the Financial Statements of the Czech Business Corporations and Their Influence on the Financial Performance
Searchability and Machine-Readability of the Financial Statements of the Czech Business Corporations and Their Influence on the Financial Performance

Author(s): Filip Hampl, Elena Láncošová, Zuzana Rakovská
Subject(s): Business Economy / Management, Accounting - Business Administration
Published by: Masarykova univerzita nakladatelství
Keywords: financial analysis indicators; financial performance; financial statements; logistic regression; machine-readability; non-searchability; searchability;
Summary/Abstract: Financial and non-financial data presented in the financial statements and annual reports represent a valuable information source capturing economic activities in business corporations, accounting units. Machine-readable (or at least searchable) financial statements allow software equipment to find, to recognise and to extract easily data and valuable information about, e.g. ownership of risk-assets, cryptocurrencies or research and development activities. The paper aims to find out whether the Czech business corporations prepare their financial statements in the machinereadable/ searchable format and whether the machine-readability/searchability is connected to their financial performance. The examined period was 2015-2017, and logistic regression was used. The data was obtained from the Czech Business Register by using a software script written by the authors and from the database of Czech and Slovak economic entities Bisnode Magnusweb. We discovered that most business corporations prepare non-searchable financial statements (no company prepares machine-readable statements). The ratio of searchable statements decreases each year. More companies change their statements from searchable to non-searchable than vice versa during the examined period. We found out that companies with non-searchable statements are more likely to have higher future long-term performance.

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