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Accounting and Auditing reforms in transition economies: The case of Azerbaijan

Mehtiyeva, Nigar (2009)
Department of Business Administration
Abstract
This master thesis analyzes the accounting and auditing reforms in the Post-Soviet world. It is the very interesting issue, because comparing with the rest of Europe and Asia the former soviet countries have extra challenges in this process. They are not only trying to adopt international accounting and auditing standards, but also move away from command economy which is not an easy task. The regulatory bodies, laws and regulations on accounting in the post-soviet countries were developed over a long period of communistic rule. Although after the independence from USSR those countries have become members of important international organizations like the World Bank, Council of Europe, IFAC and others, reforms in accounting remains... (More)
This master thesis analyzes the accounting and auditing reforms in the Post-Soviet world. It is the very interesting issue, because comparing with the rest of Europe and Asia the former soviet countries have extra challenges in this process. They are not only trying to adopt international accounting and auditing standards, but also move away from command economy which is not an easy task. The regulatory bodies, laws and regulations on accounting in the post-soviet countries were developed over a long period of communistic rule. Although after the independence from USSR those countries have become members of important international organizations like the World Bank, Council of Europe, IFAC and others, reforms in accounting remains unsatisfactory and these countries are some way away from the complying with IFRS and ISAs. Azerbaijan was chosen as the case study country to examine. Some research works have been published on Russia, as the major country of former Soviet Union, but there has been no independent research on Azerbaijan about this topic. Therefore, this thesis work aims to fill in this gap. Having an emerging oil production economy, Azerbaijan is trying to integrate to free market economy and accept international standards on financial reporting as well as on auditing. The problem here is the lack of human and financial resources to fully implement those new standards. Although the government has passed the Law on Accounting in 2004, making significant change in the whole accounting sphere, in practice the situation stays unsatisfactory. In order to be effective in the national setting, it is very essential to have the force of law or regulation backing. And that is another main problem in Azerbaijan. Because, if there is not an adequate regulatory backing, the compliance becomes very non-transparent (Hegarty et al., 2004). In order to approach this topic the following questions were formulated to answer as the core of this thesis work 1.Why is the global convergence of accounting and auditing standards becoming important?
2.What was the situation in accounting sphere of Azerbaijan during Soviet times?
3.What are the main challenges Azerbaijan faces in the process of transition to IFRS & ISAs?
4.How is the situation with implementation of international standards on accounting and auditing in practice?
5.What concrete steps have been made towards the reforms in accounting and auditing?
6.Does the accounting education in Azerbaijan support this transition? Accounting Education and the problem with competence in Azerbaijan were especially examined with in more detail. The main challenge of transition countries in adopting IFRS and ISAs is usually the lack of competent and qualified staff that is able to understand these standards. In order to train potential young professionals also the people working in accounting firms, it is important to have an adequate accounting education in the country. The thesis works aims to find out till what extent the accounting education in Azerbaijan supports the convergence with international standards, and the main problems it face. (Less)
Please use this url to cite or link to this publication:
author
Mehtiyeva, Nigar
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
Management of enterprises, accounting education, the Big 4, former soviet countries, auditing, ROSC team, transition period, accounting reforms, International Financial Reporting Standards (IFRS), Azerbaijan, Företagsledning, management
language
Swedish
id
1474576
date added to LUP
2009-06-09 00:00:00
date last changed
2012-04-02 17:34:54
@misc{1474576,
  abstract     = {This master thesis analyzes the accounting and auditing reforms in the Post-Soviet world. It is the very interesting issue, because comparing with the rest of Europe and Asia the former soviet countries have extra challenges in this process. They are not only trying to adopt international accounting and auditing standards, but also move away from command economy which is not an easy task. The regulatory bodies, laws and regulations on accounting in the post-soviet countries were developed over a long period of communistic rule. Although after the independence from USSR those countries have become members of important international organizations like the World Bank, Council of Europe, IFAC and others, reforms in accounting remains unsatisfactory and these countries are some way away from the complying with IFRS and ISAs. Azerbaijan was chosen as the case study country to examine. Some research works have been published on Russia, as the major country of former Soviet Union, but there has been no independent research on Azerbaijan about this topic. Therefore, this thesis work aims to fill in this gap. Having an emerging oil production economy, Azerbaijan is trying to integrate to free market economy and accept international standards on financial reporting as well as on auditing. The problem here is the lack of human and financial resources to fully implement those new standards. Although the government has passed the Law on Accounting in 2004, making significant change in the whole accounting sphere, in practice the situation stays unsatisfactory. In order to be effective in the national setting, it is very essential to have the force of law or regulation backing. And that is another main problem in Azerbaijan. Because, if there is not an adequate regulatory backing, the compliance becomes very non-transparent (Hegarty et al., 2004). In order to approach this topic the following questions were formulated to answer as the core of this thesis work 1.Why is the global convergence of accounting and auditing standards becoming important?
2.What was the situation in accounting sphere of Azerbaijan during Soviet times?
3.What are the main challenges Azerbaijan faces in the process of transition to IFRS & ISAs?
4.How is the situation with implementation of international standards on accounting and auditing in practice?
5.What concrete steps have been made towards the reforms in accounting and auditing?
6.Does the accounting education in Azerbaijan support this transition? Accounting Education and the problem with competence in Azerbaijan were especially examined with in more detail. The main challenge of transition countries in adopting IFRS and ISAs is usually the lack of competent and qualified staff that is able to understand these standards. In order to train potential young professionals also the people working in accounting firms, it is important to have an adequate accounting education in the country. The thesis works aims to find out till what extent the accounting education in Azerbaijan supports the convergence with international standards, and the main problems it face.},
  author       = {Mehtiyeva, Nigar},
  keyword      = {Management of enterprises,accounting education,the Big 4,former soviet countries,auditing,ROSC team,transition period,accounting reforms,International Financial Reporting Standards (IFRS),Azerbaijan,Företagsledning,management},
  language     = {swe},
  note         = {Student Paper},
  title        = {Accounting and Auditing reforms in transition economies: The case of Azerbaijan},
  year         = {2009},
}