STATISTICAL MODELING OF THE CHOICE ACCOUNTING POLICY ELEMENTS

Abstract

This work considers the problem of financial position dynamics statistical modeling based on the KPMG case with preset accounting policy settings. The dependence is based on the influence the choice of accounting methods has on the final presentation of reporting items. Reporting items are the basis for calculating ratios that illustrate the financial position; hence it is possible to explore the impact of the chosen accounting policies on future financial performance. The proposed approach has a simple mathematical implementation. The modeling method described here can be helpful for private investors, CEOs and CFOs planning the impact of managerial decisions regarding the choice of accounting methods on financial statements. We used the Matlab package to write a program to implement the modeling method; sample modeling is presented. Several indicators' influence on the financial position-related coefficients was proven, particularly the liquidity and profitability ratios and the revenue dependence of changes in receivables and operating profit.