The previous Russian accounting standards are still being used and creating
much turmoil today. Financial statements are inaccurate turning profits into
losses and changing losses into earnings (vice versa). One issue covered in the
article was the strict enforcement of laws. The soviet central planners don't
give accountants enough freedom for them to think for themselves. Instead of
allowing accountants to set depreciation rates according to real wear and tear
the state publishes a book dictating the life span of everything from wooden
chairs to tools.
Another issue covered in the article was the banking problems
in the Russian nation. Russian banks keep obsolete equipment on their books for
a long period. The Central Bank is attempting to change this and is pressuring
the banks to disclose the true state of their finances. The two issues discussed
in the article give the idea of a big cultural characteristic of the Russian
nation. The use and understanding of Hofstede's chart was a useful resource when
reading the article. The use of statutory control was clearly evident. As well
as the use of secrecy for their financial statements and banking system was
easily understood.
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