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Kyrgyzstan: Financial Accounting Moving Toward International Standards

Bishkek, 8 January 1997 (RFE/RL) -- The head of a U.S. team of business experts says Kyrgyzstan is making good progress towards establishing methods of financial accounting which meet international standards.

Geoffrey Lindemer, of the Washington-based consultants Barents, is manager of a U.S.-funded aid project to help Kyrgyzstan adopt world accounting norms.

In an interview in Bishkek, Lindemer emphasized the importance of the change from old Soviet-based accounting methods to a Western style system. He said that to attract foreign investment it is crucial to have a financial reporting system which investors understand and feel comfortable with.

He said investors did not understand the old system, which was not designed to facilitate financial reporting to managers, owners, investors and stock holders.

Lindemer said his team had been pleased to find that Kyrgyz accountants were very well trained and educated. The generally positive attitude would result in better implementation of the wide-ranging changes, because the local accountants and as well as business people realize the new system will be good for Kyrgyzstan.

"Starting with an educated population makes all the difference in the world," he said. "They know what they want and now they have a means for change in the way to attract capital."

Lindemer explained that his team has been in Kyrgyzstan exactly a year. Its effort was one specific aspect of wide administrative reforms in commercial law, in banking, in capital markets and elsewhere. He said the accounting standards now being created will be the basis for the future international accounting system in the country.

He said there are a total of 31 international accounting standards and that in the past year -- the initial phase of the project -- his team had covered 22 of the most important items.

Lindemer said the time had been spent mostly in working with the government, formulating legislation to enshrine the new standards and to authorize formation of a National Accounting Commission. That commission has the task of overseeing the entire financial reporting sector.

He said that during this present year, the emphasis will shift from creation of the framework for the new methods to informing and training people in the professional and business communities.

A new team, also financed by the U.S. government, will be arriving to do that work and his team will be departing for home.