Small and medium sized enterprises represent the most important group within national economies. Paper deals with the auditing issues in this companies from the Czech Republic firstly introducing the accounting and auditing legislature in the country. The crucial part of this paper is focused on the inaccuracies found during the auditing process in these companies. Business environment is relatively stabilized after 20 years of market economy in the Czech Republic and legislation governing it as well. But in Czech legislative rules are small and medium-sized business not limited, but they can be divided into groups, depending: if they are an independent accounting subject, is so, what is the concept of their financial statement and if their duty is to perform an audit.