Accounting Developments in Poland

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Introduction of Poland
Poland officially known as Republic of Poland (Rzeczpospolita Polska) is a country in Central Europe. Poland is bordered by Germany to the west; the Czech Republic and Slovakia to the south; Ukraine, Belarus and Lithuania to the east; and the Baltic Sea and Kaliningrad Oblast, a Russian exclave, to the north. The total area of Poland is 312,679 square kilometers (120,726 sq mi), making it the 69th largest country in the world and 9th in Europe. Poland has a population of over 38 million people, which makes it the 33rd most populous country in the world. (WBO, 2010)

Historical Background
A national accounting chart for Poland did not exist before the 1930s although an accountants’ Association was already established in the year 1907. However, there has been evolution on the Poland’s accounting system over the decades. This is largely due to the reason that they have long undergone a major change in their historical background. The effects of World War II had far-reaching implications for most of the world and Poland is not an exception. The history hit Poland on 1 September 1939 when the World War II entered Poland and this has made begins of an era of Communist rule for Poland. The period up to Second World War was strongly influenced by the German system at that time. And the rules of the uniform German General Plan of accounts were in force. This system was, however, changed after the Russian occupation and a centrally planned economy was introduced. Since 1989 when Poland moved away from Russian dominance, the accounting system was also changed. This change was undertaken gradually because already at this stage it was recognized that the process of change and the guiding principle of legislation would stretch over a considerable time span needing numerous changes, corrections and adaptations. (McGee, 2008) Poland under the socialist ruling (1942-1989)

The exposure of Poland to German, Russian and Western European accounting practices was caused by the breakout of the World War II and successive events in circumstances far from being called facile. In early of the 40s, Russia exerted major influence due to its self establishment within the Polish boarders and the German Reich’s mandatory accounts schedule was required in the other half of the country. A brief independence period of 1944 to 1945 was a time when individually drawn accounts by accountants employed in business entities were developed and utilized. However, the story from the year 1946 to 1956 is that, of strict legal regulation of accounting principles and methods. Yet again, when the times are tough the Polish spirit looks for areas that can be exploited. Major contributors to accounting of that period and great thinkers ahead of their time were Stanisław Skrzywań, Tadeusz Peche and Józef Skowroński. Skrzywań as early in the year 1947 prepared the most comprehensive definition of registry based accounting. Starting from the year 1946, Uniform Plans of Accounts (UPA) were introduced as the methods to deal with accounting. The first UPA which is based on German solutions was obligatory for state-owned industrial and trade enterprises and used as a model in development of Plans of Accounts for new enterprises created in remaining sectors of economy. However, because of its shortcomings of “excessive flexibility” in defining the economic content of accounts, it has been considered as a failure in satisfying the uniformity needs of socialist economy. As a result, in the year 1950, Poland developed its very own UPA which the solutions enacted are said to be very advanced. This is due to the fact that they allowed for the preparation of various national income balances for macroeconomic purposes, and constituted a basis for central planning methodology. However, it was again deemed unable to be exercised in a way to cater for the transitory requirements into a centrally planned system from a free-market and thus lead to a replacement...
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