Transitional Economies Of Europe And The Development Of Financial Reporting Standards: A Look At The Correlation Between A Successful Economic Transition And The Development Of Financial Reporting Standards And Laws

Abstract

During the late 1980s to early 1990s, countries around the world, such as Czechoslovakia, Lithuania, Poland, and Russia, began transitioning their economies from planned socialism, more specifically, Communism, to free market capitalism. The purpose of this paper is to analyze these economies of Europe and Asia and their adoption of appropriate financial reporting. With Poland and the Czech Republic, there is a positive correlation between a successful transition and the number of financial reporting standards implemented. However, deviations from this correlation can arise, such as in the cases of Lithuania and Russia, where the promulgation of accounting standards is delayed or there is no organization to regulate the implementation of the accounting standards.