Czech Accounting Profession Certification common mistakes
Czech Accounting Profession Certification · Understand the traps and how to avoid them.
Posting a transaction to the correct account but omitting the corresponding double entry, or booking revenue and expense directly against the equity account at the time of the transaction instead of through the profit-and-loss accounts, so the trial balance still balances but the result is wrong.
Candidates learn account titles by memorising a chart of accounts and then apply each transaction in isolation. Under Czech double-entry practice the result of operations must be accumulated in the profit-and-loss accounts (účtová třída 6) and only transferred to equity at closing, so a direct equity posting seems plausible to someone who has not internalised the closing mechanism.
What to do instead
Before answering, write the pairs: which account is debited, which is credited, and which account group it belongs to (0–9). For every transaction ask whether it touches the result of operations; if yes, it belongs in group 6, not in group 4. Practise with a two-column template until the debit and credit are written out on paper for every exercise, not only for the difficult ones.
Treating a tax-deductible expense as automatically deductible in full, without testing it against the conditions in the Income Taxes Act - for example deducting a passenger car expense without applying the statutory cap, deducting contractual penalties that are not deductible, or deducting a provision that the law does not recognise as a tax expense.
Candidates conflate accounting recognition with tax recognition. An expense can be perfectly correct under the Accounting Act and still be non-deductible or only partly deductible for the corporate income tax base, and the list of exceptions is long and specific.
What to do instead
Build a personal checklist of the non-deductible and limited-deductible items you meet in exercises (penalties and fines, non-contractual gifts, representation costs, provisions and reserves outside the statutory list, receivables written off without the required conditions, car costs subject to the limit). For each exercise, state explicitly whether the item is fully, partly or not deductible and why, before computing the tax base.
Computing the VAT liability from the difference between output and input VAT without checking whether the input VAT is actually claimable - claiming input tax on a purchase used for an activity outside the taxable scope, on a car where the law restricts the claim, or without a valid tax document containing the required particulars.
The arithmetic of output minus input is simple, so candidates stop there. The entitlement to deduct is a separate legal test with its own conditions, and the tax document requirements are easy to overlook when the exercise hands you a simplified invoice description.
What to do instead
For every purchase, run three questions in order: is the supply within the scope of the tax, is there a valid tax document with all statutory particulars, and is the purchase used for the taxable activity. Only then compute the deduction. In exercises, write the answer to each question next to the invoice before doing any arithmetic.
Mixing up the accrual and deferral accounts at the balance sheet date - booking a prepaid expense as an accrual, or leaving a received but not yet invoiced supply unrecorded - so that the profit for the period and the balance sheet are both misstated even though the total of the trial balance is correct.
The Czech terms for accruals and deferrals (časové rozlišení) are close together and the direction of the entry depends on whether the item is an asset or a liability. Candidates memorise the account numbers but not which side of the balance sheet each belongs to.
What to do instead
Draw the four boxes once and keep the drawing: prepaid expense (asset), accrued expense (liability), accrued revenue (asset), deferred revenue (liability). For each item at closing, name the box first and only then write the account number. Verify by asking whether the item represents something already paid or already earned.
Calculating payroll by applying the employee's gross wage directly to the health insurance and social insurance rates without applying the statutory cap on the assessment base for social insurance, or applying the employee and employer rates to the wrong base.
The employee and employer contributions look like simple percentages of the gross wage, and the cap only bites for higher earners. Candidates who practise on average wages never encounter it and therefore never learn it.
What to do instead
Always state the assessment base separately for health insurance and for social insurance before multiplying. Check whether the annual assessment base exceeds the statutory maximum for social insurance and, if so, compute the contribution from the capped base. Do at least a few exercises with a high monthly wage so the cap becomes automatic.
Preparing the financial statements from the trial balance without reconciling the profit-and-loss result to the tax return, so the accounting result and the tax base are presented as if they were the same figure.
The two documents are prepared at the same time and both use the word result. Candidates who have not seen the reconciliation performed do not realise that the tax base starts from the accounting result and is then adjusted by non-deductible items, differences and deductions.
What to do instead
Prepare a standing reconciliation table: accounting result, plus non-deductible expenses, minus non-taxable income, plus or minus other adjustments, minus deductions, equals the tax base. Fill it in for every closing exercise even when the examiner does not ask for it, and check that the final corporate tax figure in the accounts matches the return.
Treating management accounting and cost accounting as the same thing, and allocating all overhead using a single blanket rate rather than distinguishing direct costs, overhead absorption and the purpose of the calculation.
The two subjects share vocabulary - costs, centres, calculations - and candidates who study them together collapse them into one. The exam then asks for a specific costing method or a budget variance and the answer is built on the wrong framework.
What to do instead
Learn the distinction explicitly: cost accounting determines the cost of a product or service, management accounting supports decisions and performance measurement. For each exercise, first state the purpose (pricing, variance analysis, profitability), then choose the method. Practise allocating overhead by several bases - labour hours, machine hours, material - and compare the resulting unit costs.
Answering ethics and independence questions by describing what a reasonable accountant would do rather than citing the specific threat, safeguard and the required course of action under the professional rules, and failing to identify when a self-review or familiarity threat requires declining or withdrawing from an engagement.
Ethics questions read like common-sense scenarios, so candidates answer from intuition. The examined framework classifies threats and requires specific safeguards, and intuition usually stops at 'disclose it to the client'.
What to do instead
Memorise the categories of threat (self-interest, self-review, advocacy, familiarity, intimidation) and the hierarchy of safeguards (eliminate the circumstance, apply a safeguard, decline the engagement). For each scenario, name the threat category, state whether a safeguard is available, and conclude with the required action. Write the conclusion as a sentence, not a feeling.
Confusing the statutory audit thresholds and the obligations that follow from them - assuming an entity must be audited because it is a limited company, or assuming that exceeding a threshold automatically triggers every obligation at once.
The audit obligation depends on meeting specified criteria, and the criteria interact with the size category of the entity, which also affects other duties. Candidates who learn a single number apply it to every case.
What to do instead
Write out the criteria as a decision tree with the current statutory values and check all conditions, not just the turnover figure. Then state separately which consequences follow from the size category and which follow from the audit obligation. Re-check the current wording of the Act on Auditors and the Accounting Act, since the thresholds are amended from time to time.
Filing and deadline questions answered from memory of a single rule, without distinguishing which deadline belongs to which obligation - VAT return and VAT payment, income tax return, social and health insurance reports, and the closing of the accounts - and assuming all of them fall on the same day.
Several obligations fall near the start of the month and candidates generalise one date to all of them. Each obligation has its own filing and payment deadline and its own consequences for late filing.
What to do instead
Keep a one-page calendar with a row per obligation: what is filed, to whom, by when, and when it is paid. Rebuild it from the current legislation rather than from an old exercise book, and for each practice question state the obligation, the authority and the deadline explicitly before answering.