B) Present them in a short review and compare the information and viewpoints in Text (a) and Text (b)

a) For many years the accounting system in Russia was criticized by Western academicians for its failure to adhere to Western accounting principles. Such criticism is no longer valid. Since the early 1990s, accounting in the Russian Federation has changed significantly.

The year 1991 was crucial in accounting development in Russia due to the following three events:

a) Publication of the new Chart of Accounts;

b) Production of a new set of financial statements similar to those used in Western accounting;

c) Beginning of preparations for radical change in accounting and auditing regulation.

In 1992, Regulation on Accounting and Reporting in the Russian Federation was approved by decree of the Government of Russia. The document diminished the control function of accounting and declared the following equal objectives of accounting:

1) Maintenance of control over the availability, movement, and use of material, manpower and monetary resources according to approved norms and estimates;

2) Provision of full and reliable information about the performance and financial results of an enterprise, which is indispensible for operational management as well as for investors, suppliers, customers and creditors, tax, financial, and bank authorities, and others interested in the financial and business activity of the enterprise.

It would not be an exaggeration to say that an essentially new Russian accounting system has come into being with the introduction of the new Chart of Accounts which includes greater cohesion to international accounting norms.

The essential elements of accounting methodology are as follows:

• Documents form the legal foundation for recording transactions according to the approved rules of bookkeeping. No entry should be made unless the bookkeeper has the primary document.

• Taking inventory is the sole means of controlling the physical safety of assets and their valuation. It is the main method of supervising persons who are financially responsible for assets. The safeguarding of assets is always entrusted to a financially responsible person.

• The uniform Chart of Accounts, which provides the nomenclature of accounts and correspondence among them, must be used by all types of enterprises.

• Double entry is a traditional accounting concept that is accepted in Russia as it is in all developed countries.

• Internal reporting includes the general ledger, summary (principal) account registers, primary documents, inventory data, etc. External reporting includes the Balance Sheet, Statement of Financial Results and Their Uses, and supplemental forms that are uniform and obligatory for all types of enterprises. Nonprofit organizations and banks have their own uniform charts of accounts and financial reporting forms. Reporting is carried out according to the statutory regulation and presented within strictly prescribed time limits.

• Information generated by the accounting system must be timely, reliable, full, accurate, and objective.

• Historical cost accounting is the only method of internal and external reporting permitted.

Ex. 9. Read the dialogue, sum up its content and act it out:

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