Yerevan /Mediamax/. Interview of the President and Academic Supervisor of IAB Centre, Roy Dodge FCCA, to Banks.am portal

- Armenia already has its own accounting standards. Why is it important to train accountants in International standards (IFRS) at this time?

- Armenia’s accounting standards at the moment are based on international standards that existed in the year 2000. At the time when they were adopted there was no mechanism in place to deal with the introduction of new international standards and changes to the existing standards. The International Accounting Standards Board (IASB) made significant changes to all IFRS in the year 2003 and again in 2007. They have also introduced new standards since the year 2000. As a result of these changes, Armenia’s accounting standards are substantially inconsistent with IFRS.

The National Assembly has now adopted a law to amend the ‘Law on Accounting’ so that starting from 1 January 2009 all banks in Armenia will prepare their financial statements according to IFRS. Other financial organizations (such as insurance companies) will be required to report under IFRS as from 1 January 2010. Application of IFRS to the commercial sector is expected to follow at a later date.

- Are International Standards published in Armenian language?

- No, they are published in several languages but not Armenian. There is currently a USAID project (known as the Financial Sector Deepening Project) that will be financing the task of translation. These translated versions will then become part of Armenian law on accounting.

- IAB Centre was involved in testing translators for that project. What you can say about it?

- Yes, IAB Centre participated in a tender and was chosen by FSDP to test translators for the IFRS translation task. It was an interesting task because it was not only about the testing the language, but also testing the specific terminology and general understanding of the subject. We completed that project and sent a detailed report to the USAID contractor. Once the translators list is finalized we will start to have the first Armenian pages of the International Standards.

- IAB Centre is one of the few companies which have experience in training accountants in IFRS. When have you first started?

- Well, we have been doing it since 2002. Most of our earlier courses were for corporate entities such as Grant Thornton Amyot, Central Bank of Armenia, and Cascade Capital holdings. More recently (in April 2008) we provided a course to HSBC Armenia, and then later in that year provided courses to the Finance sector generally which was attended by internal auditors and financial specialists from most of the major banks in Yerevan. In December 2008 we held a course for chief accountants from all Armenian banks, including Central Bank of Armenia. That was partly funded by USAID. One of the benefits of this experience is that we have the opportunity to make sure that the case scenarios we use are relevant to our clients’ needs and that our training materials are kept up to date to recognize the frequent changes made by IASB.

- What kind of training materials do you use at your courses?

- All materials used on our courses have been created by IAB Centre. The practical examples in the handouts were relevant to the banking sector. As reference material we have translated the official IASB overviews of all IFRSs and included them in the training notes. In addition, a comparative study of Accounting Standards of Republic of Armenia (ASRA) and International Financial Reporting Standards (IFRS) was prepared by one of our trainers and is going to be published in the very nearest future. It will be a very useful book to have on the desk of every accountant. 

- What do you consider to be the most important soft skill that accountants will have to develop under the new regulatory regime?

- To start with they will have to accept that the new rules are significantly different to those they have been using. This will not require a skill as such, simply a willingness to accept the changes and to be prepared for some retraining. If there is any skill that might be more important than in the past it will be the ability to exercise judgment in situations that have multiple interpretations. You see, several IFRS have a bias toward the use of principles rather than being based on a set of detailed rules. Some accountants feel a little uncomfortable in such situations; they tend to want a specific rule for everything. But accountants today are trained to respect the ethics of our profession and providing they exercise their judgment faithfully and without bias, they need not fear this aspect of accounting. If we take ACCA (Association of Chartered Certified Accountants) for example, they have introduced a special online Ethics module that trainees must complete before becoming a qualified accountant.

- ACCA is the largest and fastest growing professional body for accountants in the world. How many members do we have in Armenia?

- Well, Armenia is doing very well when it comes to qualified members. At the last count we had something like 400 students and 32 members. That is a very high ratio when compared to other countries in the Region such as Georgia and Azerbaijan. In Georgia there are over 600 students but only 3 members. I do not know the student numbers for Azerbaijan but I do know that they have only 16 members. At each successive examination session you find that Armenians are leading the race, for example from the December 2008 examinations there were 5 successful finalists (students completing all examinations)in Armenia  but only 1 in Georgia and none in Azerbaijan. At IAB Centre we can be proud of the success rates of our students, which are substantially in excess of ACCA’s worldwide averages.