ONLY 300 FIRMS ARE READY FOR THE INTERNATIONAL ACCOUNTING STANDARDS
The financial shape of the Bulgarian firms is far from being easily understood by the big international corporations - at least as far as accounting and audit control are concerned. This was admitted by Simeon Milev, Head of the Institute for Certified Expert Accountants. Only 300 of the Bulgarian firms (both private and state-owned) are capable of putting in practice the universal priciples of the International Accounting Standards. The opposite, of course, is hard to be expected, keeping in mind the state of development of the Bulgarian capital market.The mechanisms for publishing of accounting reports in Bulgaria are now neither efficient, nor rational. We have no experience and we need more time to gain that experience, says Simeon Milev.The first institutions to start introduction of the international accounting standards in beginning of 2003 are the banks, the insurance companies, the pension funds and the public companies, registered on the Securities Act. The effect is yet to be seen. This problem has one other side, though. To a question of the BANKER weekly's reporter whether any statistics about the big accounting frauds in Bulgaria has been kept at all, Milev answered with: For the big Western auditors the problem will be quite the opposite.The fact is that at the big multinational corporations auditors observe strictly not whether the accounting reports will cover profits and expenses, but whether these reports won't be overstated. The deceptive accounting practices are far from unusual abroad, as the more attractive you claim to be, the greater chances you have that someone will buy your shares. We are just living on different planets. While here, in Bulgaria, we are constantly watching for someone trying to hide profits and thus pay less taxes, in the other parts of the world things are very different. Attraction of more investors can help you cover losses from paid taxes on overstated profits. It's just a different kind of business environment and a different kind of business calculation.