Accounting issues in Romania?
Im currently doing a report on whether or not to invest in Romania and part of the task is to analyse accounting issues. Does anyone have an idea of what accounting issues would be when considering an investment in an emerging economy, particularly Romania. Any ideas to get me started would be great!
Higher Education (University +) - 2 Answers
People Answers, Critics, Comments, Opinions :
Answer 1 :
Don't bog yourself down with such minute issues like accounting methods. Just remember that about 10% of the money will be required to be spent on miscellaneous greasing of hands...don't worry, nothing mob related...it's just the way things are done over there. Other than that...GO FOR IT. Romania has experienced a major upswing in just about every facet of the economy. Real Estate is still hot, development of factories, shopping malls and office buildings is en vogue. You have a very educated workforce, which is also street smart, and is dedicated to doing well and competing with Western Europe in production and earnings. Since Romania joined the EU, they are also building new infrastructure to help along the hot economic environment. Also, the EU will not let them play around with unorthodox accounting methods (except for my explanation above) so you will encounter a very professional and savvy business practices. I would recommend you find an International Accounting firm working in Bucharest or any of the major cities if you're worried. So, get the money ready and invest. Given the state of the DOW, even a small return is better than taking a blood bath. Ciao.
Answer 2 :
I don’t know about specific issues relating to Romania but I would suggest developing countries would have less formal regulation and enforcement of the accounting standards which means it would be difficult to tell if a set of accounts gave a true and fair view of the actual financial position of a company which would make it hard to evaluate whether you could achieve a good return on your investment. Companies may present their P&L and B/S in different formats also which would make comparisons very difficult. Hope this helps a little to get you started.
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