VZCZCXRO5293
RR RUEHAG RUEHAST RUEHBI RUEHCI RUEHDF RUEHIK RUEHLH RUEHLN RUEHLZ
RUEHPW RUEHROV RUEHVK RUEHYG
DE RUEHAH #0564/01 1261125
ZNR UUUUU ZZH
R 051125Z MAY 08
FM AMEMBASSY ASHGABAT
TO RUEHC/SECSTATE WASHDC 0736
INFO RUCNCIS/CIS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUCNCLS/ALL SOUTH AND CENTRAL ASIA COLLECTIVE
RHMFIUU/CDR USCENTCOM MACDILL AFB FL
RUEHVEN/USMISSION USOSCE 2486
RUEHBJ/AMEMBASSY BEIJING 1542
RUEHKO/AMEMBASSY TOKYO 1409
RUEHAK/AMEMBASSY ANKARA 3724
RUEHIT/AMCONSUL ISTANBUL 1978
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RHEHNSC/NSC WASHDC
RUETIAA/NSA FORT MEADE MD
RUEKJCS/JOINT STAFF WASHDC
RUEKJCS/SECDEF WASHDC

UNCLAS SECTION 01 OF 02 ASHGABAT 000564 
 
SIPDIS 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR SCA/CEN, EUR/ACE, EEB 
AID/W FOR EE/EA 
 
E.O. 12958: N/A 
TAGS: PGOV PREL EAID TX
SUBJECT:  INTERNATIONAL FINANCIAL REPORTING STANDARDS' CONFERENCE 
HIGHLIGHTS NEED FOR EDUCATION 
 
REF: ASHGABAT 0534 
 
¶1.  (U) Sensitive but unclassified.  Not for public Internet. 
 
¶2.  (SBU) SUMMARY: On April 29, USAID organized a conference on the 
Introduction of International Financial Reporting Standards (IFRS) 
in Turkmenistan as part of its cooperative agreement with the United 
Nations Development Program (UNDP) and the Central Bank of 
Turkmenistan (CBT).  Government officials from parliament, Ministry 
of Finance, Ministry of the Economy and Development, the chief 
accountants of the state banks of Turkmenistan, the Supreme Control 
Chamber, and the banking schools participated in this event, which 
focused on the issues of transferring to International Financial 
Reporting Standards and best practices from countries applying the 
international standards and was the first of its kind in 
Turkmenistan.  Recognizing education as a critical precursor to a 
successful transition, the speakers highlighted the importance of 
accounting education at universities, the need for continuing 
professional education, and the value of independent professional 
certification programs, like the USAID-developed Certified 
Accounting Practitioner (CAP) and Certified International 
Professional Accountant (CIPA) degrees.  Turkmenistan lags far 
behind other Central Asian countries in building the professional 
accounting capacity necessary to support the desired increases in 
foreign investment and needs to invest heavily in accounting 
education before a successful transition to international standards 
can be implemented.    The conference was a positive step in raising 
this key issue before a variety of stakeholders.  END SUMMARY 
 
CONFERENCE BROUGHT LEADING INTERNATIONAL EXPERTS TO ASHGABAT 
 
¶3.  (U) Within the framework of its memorandum of understanding with 
the UNDP, USAID's A/CIPA project organized a conference on April 29 
dedicated to the introduction of the International Financial 
Reporting Standards (IFRS) into the accounting system of 
Turkmenistan.  The conference was chaired by the Deputy Chairman of 
the Central Bank of Turkmenistan, due to its joint program with the 
UNDP on introducing International Financial Reporting Standards in 
Turkmenistan.  The conference hosted experts from the International 
Accounting Standards Committee Foundation (UK), 
PricewaterhouseCoopers (Russia), Kazakhstan's National Bank, the 
University of the West of Scotland (UK), and the Kazakhstan 
Institute of Management, Economic and Strategic Research (KIMEP). 
 
¶4.  (U) In addition to providing an overview of the importance of 
International Financial Reporting Standards as a fundamental 
building block for diversified and sustained economic growth, 
presenters focused on the importance of professional development of 
accountants and auditors.  To ensure sustainability of these 
efforts, universities and other higher education institutes can play 
an important role in preparing qualified accountants and auditors 
from the start.  Courses that prepare students to sit for the 
initial level certification exams have already been introduced into 
46 universities across four countries of Central Asia, but not in 
Turkmenistan (reftel). 
 
TURKMENISTAN LAGS FAR BEHIND 
 
¶5.  (U) Recent public statements by the President of Turkmenistan 
have stressed the importance of transitioning to International 
Financial Reporting Standards in order to increase foreign 
investment.  For example, on September 6, 2007, in a Cabinet of 
Ministers meeting, President Berdimuhamedov said, "A very important 
task is laying ahead of us in connection with transition to the 
international standards of financial reporting.  This will bring 
transparency in conducting financial transactions, and it will 
improve investment opportunities for foreign investors." 
 
¶6.  (SBU) Current and previous USAID accounting reform projects in 
Turkmenistan have contributed greatly to the foundation of training 
materials, training courses and the CAP/CIPA certification programs 
 
ASHGABAT 00000564  002 OF 002 
 
 
in Turkmenistan, but there remains a significant unfilled demand for 
accountants and auditors.  Students who come out of the university 
system are not prepared for International Financial Reporting 
Standards-based accounting and rely on additional accounting courses 
offered through the local training providers to gain this knowledge. 
 Furthermore, there is almost a complete lack of highly trained 
professors currently capable of leading higher level accounting 
courses in Turkmenistan.  As a result, trainers must be brought in 
from neighboring countries to assist the local training providers in 
order to build their capacity. 
 
¶7.  (U) With USAID's support, a recently established working group 
is endeavoring to identify the challenges in the education/training 
sphere and specific reforms necessary to expand appropriate 
education opportunities.  Currently, courses on International 
Financial Reporting Standards accounting are not taught in the 
official educational system of Turkmenistan but are available 
through local training partners of the Accounting/Certified 
International Professional Accounting (A/CIPA) project sponsored by 
USAID.  To date, over 4,000 participants from private companies and 
state banks have attended training seminars, and as of today, more 
than 130 accountants are qualified to receive CAP certificates in 
Turkmenistan.  This compares to over 4,200 CAP-qualified 
professional accountants in Kazakhstan, and represents a small 
fraction of the amount that independent experts estimate are 
necessary to supply a reformed market in Turkmenistan. 
 
¶8.  (SBU) COMMENT: Today, there appears to be an opportunity in 
Turkmenistan to jump-start accounting reforms.  President 
Berdiumhamedov's broad call for the introduction of "international 
standards" in a variety of areas, coupled with specific call for 
International Financial Reporting Standards transition, has resulted 
in a change in mindsets among key decision-makers that an 
International Financial Reporting Standards system of accounting is 
both necessary and achievable.  The question of "whether or not to 
transition to International Financial Reporting Standards" appears 
to have changed to one of "when will this transition take place?" 
 
¶9.  (SBU) COMMENT CONTINUED: That said, once adopted, standards need 
to be implemented.  To accomplish that, many more trained 
specialists than currently exist will be needed at all levels of 
government and industry.   The process of developing and adopting 
International Financial Reporting Standards-based curricula in the 
various Universities, technical colleges and private sector training 
providers is at an elementary level.  To address this, Turkmenistan 
needs knowledgeable persons who can develop Turkmen-language 
materials in addition to Russian language materials and can continue 
to revise and publish new materials as standards change.  With a 
renewed interest in transitioning to an IFRS based accounting 
system, there is an opportunity to adopt and implement IFRS based 
training in the higher education system.  Turkmenistan's challenge 
will be to find the time and funding for the instructors to expand 
their knowledge in this sphere and then to expedite training before 
the decree to transition to International Financial Reporting 
Standards is issued. END COMMENT. 
 
CURRAN