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Romania’s Post Communism Accounting Practices and the Effects of Adapting Ifrs for Smes

In: Business and Management

Submitted By haugustt
Words 1713
Pages 7
Romania’s Post Communism Accounting Practices and
The Effects of Adapting IFRS for SMEs

Abstract
Romania, located in southeastern European, was heavily influenced by the Russian Soviet Union as a socialist republic between 1947 and 1989. With becoming a capitalist country in 1989, its accounting practices began its transformation. The purpose of this paper is to analyze Romania accounting practices post its revolution. The paper discusses three major accounting practice conversions made in Romania post communism. Included in this paper are comparisons of previous practices and the implications presented within each practice; along with the pros and cons and many challenges that are associated with the adaptation of International Financial Reporting Standards (IFRS) for small and medium-sized entities (SMEs).

Romania’s Post Communism Accounting Practices and
The Effects of Adapting IFRS

Romania is country located in southeastern Europe and is the ninth largest country of the European Union. Between 1947 and 1989, Romania was controlled by the Russian Soviet Union and enforced by communism. Today, reported in its 2011 Census, Romania’s currently has a population of 21,390,000 people and a gross domestic product (GDP) of $179,793,512,340. Though now considered as an upper-middle income country by the World Bank, Romania has faced many transitions from communism to capitalism over the course of the past three decades. Along with the intense transformations from communism to capitalism, Romania’s accounting practices progressed in three different facets.
Albu, Albu, Faff, and Hodgson’ (2011) study describes Romanian’s accounting practices in three different stages:
The first stage was based on French code law accounting (1991-99), while the second stage was characterized by a growing

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