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Abstract
This paper reports on a study of the audit profession in Russia in 1996. It builds on the work of Badykova (1996) in the examination of audit in Russia in the mid-1990s in comparison to the United Kingdom. The paper concurs with the above previous research regarding the moves made towards the internationalization of auditing standards, the role of the auditor in compliance work, and the nature of the users of audited information.
The paper is set in a business context, which includes social and economic changes, to offer a perspective on the lack of any historical evidence of independent audit in Russia and emphasizes the recent change (by Presidential Decree) towards the legal enforcement of auditing standards. The motives for control and inspection are examined in the context of the twin objectives of legal compliance and certification. The role of the auditor in court is considered in terms of impartial fact finding and re-qualification of approved individuals compared with the adversarial system in the United Kingdom. The mandatory nature of audit in Russia by the court or public prosecutor is compared with the powers of the regulatory bodies in the United Kingdom and the findings identify an apparent lack of separation between the business entity and individuals.
The paper further examines the independence of the audit firm and the nature and content of the audit report in Russia along with sanctions for non-compliance. In conclusion, an attempt is made to evaluate the implications of the key differences identified as a basis for consideration of possible developments in Russia. These conclusions are placed in the context of the educational developments in the teaching of auditing processes and the Russian work ethic. The paper emphasizes the necessity to strengthen and regulate the audit profession at all levels by tightening up eligibility and entry qualifications with indigenous Russian auditors potentially replacing seconded staff from western audit organizations.
The social and economic changes that Russia has experienced in recent years include the dissolution of the Union of Soviet Socialist Republics (USSR), policies of 'glasnost' (publicity) and 'perestroika' (economic and social reforms) introduced by Gorbachev (Hosking, 1992), along with the opening up of Russia to traders and travelers alike.