The University of Texas at Dallas

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News Release

School of Management
For immediate release  
Contact:  Patricia Schoch, UTD, (972) 883-6298, [email protected]



Study By UTD Professor And Five Russian Scholars
Says Greater Use Of Accepted Business Practices
Would Help Bolster Russian Economy

Research Publication Notes Progress Made Under President Putin

RICHARDSON, Texas (Sept. 10, 2001) - A new study by a University of Texas at Dallas (UTD) professor and a group of five Russian scholars calls for Russia’s public and private sectors both to subscribe more closely to internationally accepted business practices as one means of curing the former Communist country’s current economic, financial and social ills.

The 160-page joint research publication, Accounting, Auditing and Taxation in the Russian Federation [An Update], which will be released today, argues that by implementing international accounting methods, the Russian government would encourage the foreign investment and domestic capital markets so necessary to further develop the country’s emerging free-market economy.

The monograph, an update of a 1998 study, is being produced at the UTD Press under the direction of one of its co-authors, Dr. Adolf J. H. Enthoven, head of U.T. Dallas’ Center for International Accounting Development, which is part of the School of Management. The 1998 publication evaluated business conditions and developments in Russia during the first eight years after the breakup of the Soviet Union.

Citing an eight percent growth rate in Russia’s gross domestic product between 1997 and 2000, the new study credits three years of economic and financial reforms by President Vladimir Putin -- including devaluation of the ruble, the debt default, a tightened fiscal policy and a Central Bank of Russia policy of adopting international accounting standards by 2004 -- with producing hopeful signs for the Russian economy.

The study says that increased compliance with the country’s new lower corporate and personal income taxes has improved the investment climate within Russia, but notes that foreign confidence in investing in Russia is still low.

In Russia, the “large number of accountants and the low level of their qualification very often have a negative effect,” the study says, adding there is an urgent need to view accounting as a separate discipline and body of knowledge as opposed to merely a bookkeeping and recording exercise. “The whole society (the public) does not understand clearly what auditing means and who auditors are,” the monograph says, adding that few Russians who buy the securities of a firm “pay any attention to the existence of the audit report and (the) auditors’ opinion.” It recommends instituting accounting courses based on international accounting principles in business education programs at Russian colleges and universities.

The study cites as especially effective a computer-based training program designed to “train the trainers” and used in the last four years to upgrade and update the international accounting knowledge of 160,000 Russian tax inspectors. In addition, it says that enhancing the Russian tax inspectorate would improve tax collection and adherence to the tax codes even further.

The study calls for a better-defined relationship between Russia’s federal government and its 20 provincial governments, especially in the areas of planning, control and the equitable flow of revenues and expenses between the national and local governments.

“Globalization in the economic and financial areas cannot succeed effectively without greater harmonization of the accounting, auditing and taxation rules and norms. Russian entrepreneurial activities would also greatly benefit from an effective and efficient financial accounting system,” the study concludes.

Dr. Enthoven has worked as a U.S. State Department-sponsored consultant with the Russian government since 1990. Working together with the U. S. Treasury, the Soros Foundation’s East-West Management Institute, the International Monetary Fund, the Organization for Economic Cooperation and Development and the Russian Ministry of Taxation, he developed and administered the computer-based “training the trainers” program for Russian tax inspectors. A longtime consultant to the United Nations and the World Bank, Dr. Enthoven also has organized and led courses in Russia, the Baltic countries, Ukraine, Kazakhstan and Moldova that have trained more than 1,000 accountants in the basics of international accounting principles.

Dr. Enthoven co-authored Accounting, Auditing and Taxation in the Russian Federation [An Update] with Professors Yaroslav V. Sokolov, Varlery V. Kovalev, Svetlana M. Bychkova, and Irina M. Smirnova of St. Petersburg State University and Professor Maria V. Semenova of St. Petersburg Institute of Commerce and Economics. The same group of Russian scholars, with the exception of Professor Smirnova, also co-authored the 1998 study with Dr. Enthoven.

About UTD

The University of Texas at Dallas, located at the convergence of Richardson, Plano and Dallas in the heart of the complex of major multinational technology corporations known as the Telecom Corridor, enrolls approximately 7,000 undergraduate and 5,000 graduate students. The school’s freshman class traditionally stands at the forefront of Texas state universities in terms of average SAT scores. The university offers a broad assortment of bachelor’s, master’s and doctoral degree programs. For additional information about UTD, please visit the university’s web site at


Last updated September 10, 2001 / rch

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