Accounting in the Soviet Union

Accounting in the Soviet Union

Accounting in the Soviet Union

Accounting in the Soviet Union

Synopsis

This book focuses on accounting for Soviet industrial enterprises as it exists within the U.S.S.R.'s managed socialist economy. Ash and Strittmatter examine the methodology of accounting as a required first step in the evaluation of Soviet enterprise data, and explore such topics as the importance of control through accounting, which enabled the government to direct industrial activity, and the influence of Marxist/Leninist philosophy on economic planning, market activity, and enterprise recordkeeping and financial reporting. They conclude that standardized accounting systems have been essential for economic control of the country.

Excerpt

Accounting practice the world over is based upon the double-entry system in which all economic transactions have a clear, logical, and simultaneous influence on the content and correlation of an economic entity's assets and their origins. This does not imply, however, that the practical use of the double-entry system and accounting procedures, as a whole, are free from local sociopolitical influences: governmental structures, forms of property ownership, and national traditions. Each of these factors undoubtedly exercises a strong impact on the theory and practice of accounting in any country. Throughout its history, the Soviet Union and its managerial apparatus have used accounting and economic analysis for management and control of individual enterprises and the entire national economy. Through total control over material, labor, finance, and other resources, Soviet authorities have regulated the economic activity of all enterprises toward predetermined economic and political goals.

In discussing Soviet accounting theory and practice, and sometimes referring to its American counterpart, we are conscious of the fact that each system of accounting has developed within its own peculiar environment, and that every accounting system represents the result of the creative efforts of many individuals and organizations. This is why, reflecting the peculiarities and distinctions of Soviet and American accounting systems, we do not extol the achievements or criticize the deficiencies of either system. We proceed, rather, from the conviction that the reader is sufficiently qualified and equipped to make independent judgments based upon our research. Compared with American accounting systems, the Soviet system has been developed without consideration of the need for income distribution among partners or corporate shareholders. Before recent perestroika reforms, the state, the sole proprietor of all enterprises, appropriated all profits and determined their distribution and use; managers and workers often received distorted information concerning the generation and distribution of profits. In the USSR at this time the use of . . .

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