10 December 2007 — Independent Russian Research Company Romir, at the initiative of a consortium, whose members are ZAO PricewaterhouesCoopers Audit, Agriconsulting (Italy), OOO FBK (Russia) and ACCA (UK), conducted second survey within the limits of implementation of the Tacis project ‘Implementation of the Accounting Reform in Russia’, funded by European Commission.

The general aim of the survey is to determine the level of achieved successes in the implementation of the accounting reform for the last 5 years, and also the nature and reasons of difficulties in the move to international financial reporting standards (IFRS).

40% of the respondents note the possibility to move to IFRS after 2010. Regardless the optimism of the forecast currently only 16% of the companies in Russia apply IFRS in their practice, which does not largely exceed the survey results in 2004 (11%).

Richard Gregson, Project director, notes:

«Progress in accounting reform and IFRS implementation is evident but there is room for further acceleration of this process. Russian accountants and auditors have recognized the need to respond to changing market conditions. The last few years have seen Russian accountants and auditors demonstrate a significant improvement in their understanding of the principles of international financial reporting standards but this has not filtered down to a significant move to IFRS which seems unlikely until mandated by government».

The respondents consider the lack of the appropriate law to be the main impediment in the move to IFRS (32. 43% of the professionals complain of the decrease in its quality due to the lack of the personnel with due qualification and corresponding infrastructure for training.

Regardless the existing obstacles, currently two thirds (67%) of the survey participants mark the advantages of the move to IFRS, the main advantages being preparation of a better management accounting (31%), attraction of new investors (27%), possibility to get credit (25%).

Respondents note that the higher education system positively reacted to the changes in the needs in the accountants’ training. (66%).

The necessity of a single professional qualification for accountants and auditors is acknowledged by almost half of the target audience (55%).

Both accountants and auditors stated that the control over the accounting (59%) and audit (54%) should be carried out by the RF Government.

Respondents consider that Minfin has been quite active for the past 5 years in regulating the accountants and auditors’ activities.

For the past 5 years the trust of the community in professional associations raised to a certain degree (22%) or has not changed (26%). In the opinion of the majority of the respondents preparation of the draft accounting standards is the sphere of activity to which professional associations should make their input.

Richard Gregson:

«The results of the survey clearly demonstrate that Russian accountants support the government’s efforts to develop national accounting standards closer to IFRS in order that accounting practice can match the progress made by the Russian economy».

About the Project

The Project “Implementation of Accounting Reform in the RF” funded by the European Union. The objective of the Project was to support Russia’s move to International Financial reporting Standards (IFRS).

The Project’s duration is 25 months (commenced December 2005 and will end on 31 December 2007) with total budget 3,5m EURO.

The Project has been implemented by a consortium led by PricewaterhouseCoopers Moscow with the consortium partners being FBK (Moscow), Agriconsulting (Rome), ACCA (London).

The main beneficiaries of the project are the Ministry of Finance represented by the Department of State Financial Control, Accounting, Financial Reporting and Auditing Regulation and the Ministry of Agriculture.

Methodology of the survey

1. The survey was conducted in October 2007 by an Independent Russian research company Romir at the initiative of a consortium, whose members are ZAO PricewaterhouesCoopers Audit, Agriconsulting (Italy), OOO FBK (Russia) and ACCA (UK);
2. More than 2000 respondents who participated in the survey, were auditors, accountants, trainers and users of the financial statements (75% of them are professional accountants);
3. Geographical coverage: Moscow, St. Petersburg, regions: Central (excluding Moscow), North-West (excluding St. Petersburg), South, Privolzhskiy, Siberia, Urals, Far East;
4. The full text of the all-Russian survey can be downloaded from the site: Implementation of the Accounting Reform Russian Federation .

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