Accounting Certification in the Former Soviet Union and its Importance to the Energy Sector

The decline and fall of the Soviet empire has had profound effects on accounting and the accounting profession in the former Soviet republics. As the nations of the former Soviet Union have started to shift from central planning to a market economy they have encountered difficulties in adopting and implementing International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA). Accountants were not trained in IFRS and ISA and universities have only recently begun to add these subjects to their curriculum. Some national certification exams have started to test on these subjects but the national certifications do not have much credibility, especially in the international marketplace, because of corruption and the perception of poor quality. Lack of credibility is an especially important issue in the energy sector, since this is one of the sectors most in need of injections of foreign capital. Yet attracting foreign capital is made more difficult by lack of credible financial statements. The market is solving this credibility problem by offering several internationally recognized and respected certifications in the English language. There is also a regional certification program that offers a series of credible exams in the Russian language. This paper reports on these certification programs.