To a large extent, the investment attractiveness
and effective corporate governance
are driven by the realistic planning and transparency of
accounting system of an enterprise.
Currently, there are certain achievements in
implementing the Russian Accounting Reform Program. Existing
accounting regulations (PBUs) have been revised along with the
development of new ones. The Russian official translation of
International Financial Reporting
Standards (IFRS) has been prepared, which facilitates their
study by the wide audience of interested users. However, some of
the major shortcomings still
require further examination.
According to the Foreign Investment
Advisory Council (FIAC) meeting chaired by the Prime minister
and held in May 2001, the Russian accounting reform towards
international standards has been proceeding slowly and at some cost.
The FIAC includes representatives of the leading international
companies such as BP Amoco, Mobil, Mitsubishi, Coca-Cola,
Citibank, BASF and others.
The representatives of these firms
believe that the accounting reform
is a primary factor for stabilizing the Russian economy.
This issue is crucial, which is evidenced by
PricewaterhouseCoopers stating that the non-transparency of financial
statements of Russian enterprises has resulted in a shortfall of ten
billion US dollars in direct
foreign investment. («Company» magazine, May, 2001). Troika
Dialogue has summarized data on the understatement of assets of
Russian enterprises, which resulted from corporate governance
risk. Enhanced transparency and corporate governance
should increase the overall capitalization of Russian companies
twice as much or by 54 billion US
dollars.
There are very few
companies whose high P/E ratio results from
proper corporate governance, including
transparent accounting records in compliance with international norms.
One factor contributing to this problem is the drastic shortage of
Russian specialists with appropriate knowledge and practical skills.
Such specialists were not required in a centralized economy. Currently
we are facing the following situation: on the one hand, more than
three thousand companies are willing to get listed on organized
markets, and therefore, have to
prepare lAS-based financial statements; while, on the other
hand, there are three and a half million
Russian accountants that have no
prior experience with these procedures.
According to the Ministry of Finance, this is one
of the major reasons why Russia will be able to move to IFRS no
earlier than 2005. However, there is an ongoing need for solutions
aimed at ensuring transparency in
accounting and reporting.
Managers of many enterprises
recognize the need for training qualified accountants based on
international management accounting practices and this training
is already being implemented. There are various training programs
in universities and specialized
training centers. Many international institutions proactively
assist in training and upgrading the qualifications of Russian accountants.
However, training frequently ends up covering some
general theoretical aspects of IFRS accounting and reporting, and many
training programs fail to promote the necessary professional skills.
Nevertheless, some training programs successfully
operate in
Russia because they are conceptually sound.
Qualified Russian practitioners
have been localizing these courses in
Russia. Training
covers case studies and other course
materials that are continually
updated to conform to international requirements.
The International Association of Bookkeepers (IAB,
Great Britain) offers one of the most successful training programs. It
has been operating since 1973 and is currently training more than ten
thousand certified specialists
throughout the world.
The professional development program for IAB
accountants has been in Russia since 1998. The IAB certificate and
qualification meet modem accounting
requirements, because the syllabus and
examination questions are continually
updated to conform to internationally
accepted practices. The IAB qualification is recognized in more
than 90 countries, and certifies that an expert is competent and
professional enough to meet International accounting and reporting
requirements.
The training program covers basic concepts and
principles of western accounting systems, including easy and
understandable examples of their practical application.
The nature and techniques of adjusting entries at the end of
reporting period are illustrated by
many examples to ensure full implementation
of the matching rule and accrual basis of accounting.
The training also covers setting
up provisions and their adjustment
(for doubtful debts, early payment discounts, impairment of assets
and others).
The training program focuses on accounting in sole
proprietorships, partnerships and non-for-profit
organizations. Courses address basic rules and peculiarities of
these businesses and also different formats of statements and
financial reporting rules for each
type of business.
Course materials include a
large number of case studies covering various topics and provide
problems for review with their
solutions.
The IAB provides for
three levels of training, including
foundation, intermediate and final. Given
their previous experience, Russian accountants usually begin
their training process directly from the intermediate level. Students
who successfully pass the intermediate
level exam meet the criteria
for International Qualification as a member of the IAB.
The final level program covers in-depth and
advanced study of the previously covered material,
as well as topics such as
accounting for corporations and manufacturing enterprises,
fundamentals of the financial analysis based on accounting data and
others. Those who successfully pass exam at this level shall be
entitled to an absolute IAB membership and Fellow of IAB
qualification.
IAB syllabus formally provides bookkeepers
training. However, it is worth mentioning that the courses also
address advanced financial analysis problems and even managerial
accounting elements. In fact, the
material is intended to provide training in a wide range of
accounting solutions based on international practices. In the course
of textbooks study a reader gets a complete picture of accounting
principles applied in developed
market economies. As a result a bookkeeper obtains
sufficient skills in preparing major financial statements for all
types of business, is able to make right decisions when measuring and
recognizing major accounting items, and is capable to manage methods for financial analysis based on accounting
data.
The IAB Program covers several regions in Russia
such as Moscow, Saint Petersburg, Kazan, Yekaterinburg, and
Novosibirsk. Presently, Postgraduate-RAA
training center is a representative office IAB in Moscow. The
training center closely cooperates
with Sodruzhestvo, Association of accountants and auditors, and
also the Russian Board of Auditors. Given steadily growing demand for
IAB educational services, the
decision was made to establish Russian/English enterprise on
the basis of Postgraduate-RAA, which shall be delegated exclusive
authority to open new training centers in Russia and CIS. IAB and
Postgraduate-RAA first managers signed a respective protocol to
support this decision in May 2001.
IAB graduates are expected to continue their
professional growth, taking into
account constantly growing demand from Russian specialists for
continued training after Bookkeepers
qualification. After the Final
level specialists get an offer to continue
training on the basis of Institute of Financial Accountants (IFA)
that was founded in UK in 1916, which is an IAB strategic partner. The
IFA program is closely connected to the previous IAB stages and
provides for module training with a consequent
appellation of four qualifications (Accountant Technician,
Associate of IFA, Fellow of IFA, BA
degree under IFA), each certified by IFA diploma. The first
degree of Accountant Technician (Accountant Manager) is a
module that includes the following
subjects: accounting (credit is given to the final IAB level),
managerial accounting, taxation
and business legislation.
Along with advanced
international accounting issues, the IFA
also includes subjects for financial
managers and directors, consultants and analysts in accounting and
control. Completion of the IFA training program
corresponds to a Bachelor's degree
in Economics and Finance. Presently, Postgraduate-RAA and IFA are
about to complete localization of this program in
Russia. The training
and examination
will be conducted in Russian.
In addition to the training of practicing
accountants and auditors, the
Russian Representative office of IAB/FA Postgraduate-RAA
cooperates with Russian universities by offering special rates to full time
university students. University students have been expressing their
keen interest in IAB/IFA training programs because of their wiliness
to have a prestigious international
education to complement their Russian university degree, and,
besides, they have confidence in
education that meets international requirements.
