Olga Nikolayeva
Igor Zhuravlev
Training personnel in the use of IFRS, and of teachers that will be instructing future IFRS practitioners is a major aspect of the problem of shifting to IFRS.
Many Russian specialists have already encountered the need to conduct accounting and auditing in compliance with internationally accepted rules.
To meet this requirement both accountants and auditors have been taking crash courses, including those offered by international organizations, in order to improve their skills.
However, the stable trend towards Russian businesses’ integration in the world economy (Russia’s intention to join the WTO, the placement of securities on foreign markets through ADRs and ADSs, etc.) has highlighted the need for fundamental training and for creating opportunities for further continuous professional growth of IFRS experts from college on. This is precisely the practice widely accepted throughout the world.
In reality the offered curricula are many and varied. Some are meant for instruction at the college level, and others, for post-graduate education, but a unified system of IFRS instruction in Russia is still embryonic. Yet there have been some encouraging examples that might prove useful in promoting IFRS to a far more prominent place in the Russian system of education.
IFRS instruction, until recently a privilege of a select few who have already undergone some basic training, has been increasingly available to students at Russia’s leading colleges as part of their mandatory curriculum for 5 year and 2 year state licensed courses. Economic students have shown growing interest in GAAP and IFRS courses, bearing in mind their future practical work. The Moscow State University is one of the educational establishments that has accumulated some useful experience in IFRS instruction.
The Moscow State University is one of the oldest in Russia. In the current market economy environment and greater competition among educational centers and curricula the Moscow State University has retained firm positions as the leading educational establishment that has preserved top quality education traditions.
The University’s Economics Department, just as the University on the whole, offers a unique combination of fundamental education pertaining to classic type universities, and flexibility of curricula to timely respond to the latest trends in science and practice.
Since the Economics Department does not train accountants (this profession is not on the graduation list), all future bachelors take only a brief course of Accounting and Analysis (64 hours), which is the main mandatory subject for all groups in the Economics section. In the Management section the curriculum contains two separate courses – Accounting (68 hours) and Economic Analysis of Operation of Commercial Organizations (64 hours). Both courses are taken in the second year.
The students study the basics of accounting theory and of the composition, structure and preparation of an enterprise’s financial accounting in compliance with Russian regulatory acts.
In their last year students are offered to select specialization disciplines within the framework of certain programs. Each such program represents a major field of the economic science. The Accounting, Analysis and Audit Chair has drawn up a system of special courses that include six disciplines covering the chair’s main list of problems.
Of all disciplines offered by the Chair a special course on IFRS has been the most popular with student audiences. Ever since its course introduction 150-180 students apply for this course annually (whereas other special courses available at other chairs gather no more than ten).
Students’ interest in this special course is due to the awareness they must know the principles of IFRS, to be able to apply for and contest rewarding and promising jobs and positions. They also understand these new skills will be crucial to their future profession. Many students in their last year also combine classes with part-time work and some are employed by major foreign companies.
Another reason why students select this particular course is that the lecturers are top class professionals, capable of explaining in a clear and thrilling way even the most abstract and complicated internationally accepted accounting principles and methods. Lecturers invited for this course are leading specialists on the subject of international accounting in Russia. The instructors have repeatedly undergone on the job training in other countries, they systematically attend international accounting congresses and meetings with international specialists and are well up on the latest ideas, regulatory documents, and accounting theory trends throughout the world.
The lecturers have to their credit published manuals on the subject they lecture on, which, alongside the main contents contain questions for self-testing, and problems, whose solution and discussion in the classroom gives deeper knowledge of the basic terms and methods used.
Within the framework of the course students discuss the difference of principles and concepts, types of evaluation, and methods of accounting and reporting in various countries, harmonization of accounting on the world scale, systems of international and national generally accepted accounting standards, and control of accounting at the international and regional levels.
Students familiarize themselves with the technique of accounting at all stages of the accounting cycle and with the specifics of showing economic transactions in the accounting systems of Western countries. The problems many students have with mastering the material are due to a lack of a unified chart of accounts on the national level, different classifications of accounts and the use of complicated entries. One of the most complicated issues is the process of preparing adjustment notes for the full implementation of the rule of correspondence of income and spending and accrual-based accounting. For this reason these problems are discussed in detail with the use of specific examples and analysis of practical situations.
IFRS and discussion of reforming the national system of accounting in keeping with the IFRS features prominently in the special course. The explanation of each theme is accompanied by the comparison of Russian practice of accounting interpretations of this or that subject of accounting with the IFRS interpretation and with UK GAAP and US GAAP.
In the students’ opinion, it is a great advantage of this course that all terminology is in English, and in many cases explanations are provided of different usage of certain terms from country to country (for instanced, in the United States and Britain). As a result, students in Moscow University understand well all accounting articles of Western companies in English and are capable of drafting the main types of financial reports in English on their own. Those seeking the master’s degree are offered an advanced IFRS course with far more hours spent on the subject.
Many Russian specialists, who already have higher education, often take IFRS courses under job retraining programs. This is a good education option for those who have no chance to obtain a second college degree, but have to improve their knowledge and skills to meet growing professional requirements.
A number of major accounting organizations of world scale offer an opportunity to undergo training and certification and receive international level qualification.
The most famous and prestigious ones are ACCA, CIMA, CPA and IAB, of which the first three have so far offered instruction in English only. The Russian language programs of the IAB (International Association of Book-Keepers) may be regarded as a good example of availability for students, and of high motivation for those who have already found their career bearings in the world of international finance and accounting. The IAB has no formal restrictions in terms of certification of specialists who have no higher education certificate. In the first phase it is enough for those certified to be employed and undergo training in the relevant profession.
The process of instruction involves a great deal of independent work with manuals and teaching aids, as well as interaction with the instructor in the class room and through distance learning instruments (e-mail, Internet and others). This allows the trainee to shift instruction to the most convenient hours, because many specialists are unable to attend classes due to great work loads.
One should emphasize the most important advantages of such instruction: great informativeness of the few classes that have to be attended, and top quality didactic material. The first component requires highly-skilled teaching staff. The experience of GAAP and IFRS instruction at the network of centers run by the Russian office of IAB – Postgraduate-RAA – indicates that trainees often seek not just to undergo the general course (the beginner course offered to college students), but to look into the specifics of using theory in their practical work. This requires of the teacher not just good knowledge of the IFRS theory, but a good record of practical work. Most instruction at IAB/Postgraduate-RAA is done by guest lecturers from the Moscow State University.
The other aspect is related to the availability of high quality manuals and well-selected tests and practical examples enabling stable trainee feedback and control of progress made. Russia’s IAB programs offer a form of instruction that allows the trainee to study the subject using manuals in both English and Russian simultaneously and to compare the terminology. Such manuals have been translated by professional practitioners and examples contained there are adapted to the Russian accounting specifics. The course contains many practical examples, problems and typical situations and is less related with the history of the problem than the college course.
Trainees undergo two phases of instruction in a combined (full-time tuition/distance learning) form, each phase lasting 150 hours. The test at the end of each phase is confirmed by a British and Russian certificate.
The practical thrust of the program (in contrast to the theoretical bias of college courses) is one of the major factors encouraging students to take the IAB course. Upon the end of instruction the graduates are skilled enough to do practical IFRS work and some managerial accounting work at operating enterprises.
The above description of college education and vocational training of experts highlights the following common traits. Both college and post-college curricula have a common methodological aspect of forming the understanding of and conducting IFRS accounting: principles the standards are based on, the gist of international standards accounting, the implementation of standards in practical activity, and the difference of IFRS and GAAP from the Russian system of accounting.
The understanding of the methodology of international accounting provides the clue to mastering theory and practice in college and at post-college training and re-training courses.
Olga Nikolaeva is Professor and Deputy Head of Accounting Analysis and Audit Chair of the Moscow State University.
Igor Zhuravlev is Director General of the Russian Representative Office of IAB/IFA «Postgraduate-RAA». Their contact telephone numbers are: (095) 231 1059 and (095) 436 0927.