Many
American scholars even suggest to adopt the hitherto much-derided
alternative - the International Accounting Standards (IAS) recently
implemented through much of central and eastern Europe.
Russia's Federal Commission for the Securities Market (FCSM)
convened a conclave of Western and domestic auditing firms. The
theme was how to spot and neutralize bad auditors. With barely
concealed and gleeful schadenfreude, the Russians said that the
Enron scandal undermined their confidence in Western accountants and
the GAAP.
The Institute of Corporate Law and Corporate Governance (ICLG),
having studied the statements of a few major Russian firms,
concluded that there are indications of financial problems, "not
mentioned by (mostly Western) auditors". They may have a point. Most
of the banks that collapsed ignominiously in 1998 received glowing
audits signed by Western auditors, often one of the Big Five.
The Russian Investor Protection Association (IPA) and Institute of
Professional Auditors (IPAR) embarked on a survey of Russian
investors, enterprises, auditors, and state officials - and what
they think about the quality of the audit services they are getting.
Many Russian managers - as avaricious and venal as ever - now can
justify hiring malleable and puny local auditors instead of big
international or domestic ones.
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