Accountancy & Management: Charity offers the tools for changing an economy: Roger Trapp on efforts to boost the role of the accountant in Eastern Europe

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The Independent Online
GIVEN the activities of the big firms, one might be forgiven for thinking there were more than enough Western accountants crawling over the economic wreckage of the former Soviet bloc.

The Chartered Association of Certified Accountants (Acca) seems to think so, for it has so far turned down an invitation to take part in the establishment of a charity designed to encourage accountancy education in Central and Eastern Europe.

Anthea Rose, chief executive, explained that since the organisation had done extensive work and made a substantial investment since setting up in the region two to three years ago, she could not see the point of joining something that would be starting from scratch and creating more bureaucracy.

Nevertheless, the Institute of Chartered Accountants in England and Wales, along with its counterparts in Scotland and Ireland and the Chartered Institute of Public Finance and Accountancy, has gone ahead with the launch of the Foundation for Accountancy and Financial Management.

The aim is to help to create the broad understanding of these subjects that is presently lacking in the former centrally-planned economies and is necessary for growth. It is also intended to support the development of 'self-sustaining and independent accountancy professions'.

As such, it is intended to complement rather than compete with the work already being done by the leading firms, which have pledged to support the organisation's project costs. The foundation also says it is not competing with the Chartered Institute of Management Accountants.

But there is an apparent conflict with Acca, which has been introducing its internationally popular distance-learning programmes to the area, largely under the aegis of the leading firms. This year, 600 students in the region have gone through various programmes run by the organisation, with similar numbers expected to follow this year. In addition, it is helping to establish the educational structure through the adoption of its set texts in such countries as Hungary and the Czech Republic as well as Russia.

Nor are just the Brits moving in; the French authorities have also made strides in the area. However, the ascendancy of Anglo-Saxon accounting methods - evidenced by Daimler- Benz's path-breaking recent move towards them for the sake of tapping the international capital markets - has made the UK bodies confident that they will eventually hold sway.

Although Mrs Rose bases her decision not to participate at least in part on a belief that the institutes' plan is too high-powered, the foundation's secretary and executive, Sir Peter Kemp, says there will be a concentration on practical projects.

Sir Peter, a chartered accountant who is a former second permanent secretary at the Cabinet Office, has in mind the likes of courses, workshops, help with syllabus development and study visits to the UK. All of this sounds like what Acca is offering, except that the foundation will not itself run mass teaching programmes. Instead, it will concentrate on the establishment of educational standards and working through national organisations to provide training and experience for key individuals, including those who will do the teaching.

Like Acca, too, it will seek assistance from the British Know-How Fund and other aid agencies, such as the European Bank for Reconstruction and Development and the European Commission.

With the founding bodies paying the overheads, the charity has already received more than pounds 200,000 in project money from the leading firms of accountants and has agreed to assist with the funding of 10 projects split between Bulgaria, the Czech Republic, Hungary, Poland and the Ukraine until the end of the year. The big firms have pledged support for an initial three years, and the organisation will be seeking contributions to these costs from other firms, industry and commerce and all those who might have an interest in its work.

As this suggests, the move is not purely altruistic. While suggesting that there was an element of public interest, Sir Peter acknowledged it was 'motivated by self-interest' in that the institutes hope that their approaches will be adopted and the international firms will be looking to have their Eastern European offices staffed by properly trained locals.

Indeed, this latter objective would be likely to improve the practices' finances, since Sir Michael Lickiss, the senior partner of Grant Thornton and former president of the English institute who is vice-chairman of the foundation, insisted that he knew of no firm that was making a profit out of, in effect, carrying out work in Eastern Europe from London.

All are adamant, though, that this is not an attempt at some sort of colonisation. Sir Curtis Keeble, the former UK ambassador to the Soviet Union who is chairman of the foundation, said: 'We're not wanting to impose solutions on them. But those seeking to set up professions there would be coming to the institutes for advice.'

Sir Peter, meanwhile, sees basic accounting skills as the 'tools for the job' of bringing about a fundamental change in the countries' economies. Sadly, though, evidence is already suggesting a need for some specialist skills.

Having embraced privatisation particularly enthusiastically, the Czechs have discovered an urgent need to find out about insolvency. A seminar on the subject is due to be held in the autumn.

(Photograph omitted)

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