True and Fair View or rzetelny i jasny obraz1

1. Rzetelny i jasny obraz is the official, legal translation of the True and Fair View in Polish (Accounting Act 1994).

? A survey of polish practitioners

Abstract

The ongoing harmonisation processes with the European market (EC regulation 2002 on the application of International Accounting Standards, hereafter IAS) drive reforms in the Polish accounting framework. In 2000, the Accounting Act introduced significant changes to the 1994 Accounting Act, its predecessor. New accounting terminology and provisions based on the IAS framework were introduced and a substantial number of existing regulations modified. This paper outlines recent developments in Polish accounting and discusses their implications for the realisation of the True and Fair View construct (hereafter TFV). Legal changes (de jure analysis) are confronted with the insights from an exploratory study on the local operationalisation of the TFV construct. The questionnaire survey with Polish practitioners was conducted in the years 2000 and 2001. Then, follow-up interviews were carried out in order to validate the questionnaire data categorisation. Insights from the study raise issues of the (un)transferability of constructs such as the TFV across languages and culture though there is emerging evidence indicating that the current regulatory framework putatively supports the TFV concept. In practice, there appears to be a lack of consensus in translation and grammatical construction of the TFV concept, revealing a general local unfamiliarity with the substance of this ‘Western’-originated and constructed predominantly in the British and American context construct. The paper concludes that a Polish equivalent for the TFV as a multifaceted construct, a derivative of a hybrid experience, cannot be realised outside the localised Central and Eastern European reality in which it is situated, despite the new Europe discourse.

Notes

1. Rzetelny i jasny obraz is the official, legal translation of the True and Fair View in Polish (Accounting Act 1994).

2. It could be argued that the introduction of correctness and truth(fulness) echoed provisions operational under the centrally planned economy (e.g. Decree on Accounting 1959).

3. This interpretation could be also envisaged as relating to the US-based interpretation (IAS).

4. Also in alignment with IAS, the new Act released smaller companies from compulsory audits, but not from correct (proper) bookkeeping.

5. Under the new Act, there are also some re-classifications in the balance sheet and profit and loss account.

6. The impact of the 2002 EU regulation requiring listed companies to use IAS by 2005 (6 June 2002, IP/02/827) forces the member states and subsequently accession countries to a stronger commitment to IAS.

7. The principle-based tradition reflects generally accepted and shared accounting practice in the context of a democratic state where laws are the result of a group (community) consensus. Practice in Poland is reflected in normative, rule-based compliance.

8. An evolution of the regulatory framework is visible in the constant changes in laws. There are already plans for further amendments to the 2000 Act to be implemented by 2005. These proposals are particularly concerned with simplifications of the accounting, reporting and attestation requirements for smaller enterprises. The proposals are to differentiate legal requirements for reporting and attestation according to the size of the entity (as under the Danish Accounting Act framework) (Sablik, 2001).