The Changes of Polish Accounting Regulations after the 1989 Political Transformation Incorporation of Global Solutions

The aim of the article is to present the changes in Polish accounting regulations in the last thirty years of the ongoing systemic transformation from socialism to capitalism, which began in Poland in 1989. The changes consisted in adjusting Polish regulations to the Directives of the European Union and to the International Accounting Standards and International Financial Reporting Standards.


Introduction
Accounting, which was developed over the centuries, in today's socio-economic reality has gained the unquestionable and honorable name of the business language. It is an expression of the ennoblement of accounting in terms of theory, practice and policy. Fundamental accounting principles have been shaped in its historical development which is still going on (Surdykowska, 1999;Jaruga ed., 2002).
Accounting development is international, for the reason that different countries have contributed to accounting advances. Accounting is subject to different legal systems in which are big differences, mainly in Europe. Therefore, apart from the existing specific national accounting systems, universal systems are created on a regional, international and world scale. The systems are the result of the ongoing processes of standardization and harmonization of accounting norms and

Abstract
The aim of the article is to present the changes in Polish accounting regulations in the last thirty years of the ongoing systemic transformation from socialism to capitalism, which began in Poland in 1989. The changes consisted in adjusting Polish regulations to the Directives of the European Union and to the International Accounting Standards and International Financial Reporting Standards. There are no synthetic studies on this subject in the available literature. The article partially fills this gap and is therefore original. The introduction provides a background followed by a retrospective outline of Polish and international accounting regulations. The main part describes the most important changes introduced to the Polish Accounting Act of 1994 over the last 25 years. The research method was a review of Polish, European and international accounting regulations in that period. The hypothesis related to the question whether the amendments to the Accounting Act were regular, immediate and adequate to the amendments of the EU and IAS / IFRS laws. The answer to the question was positive.
practices. Standardization is associated with the standards of the International Accounting Standards Board (IASB) and harmonization with the directives of the European Union, (Alexander and Nobes, 2010). The accounting of highly developed countries has been standardized on the basis of international accounting standards [IAS -issued until 2001 by International Accounting Standards Committee (IASC)] and international standards of financial reporting [ISFR -issued since 2001 by IASB with its headquarters in London]. Standardization and harmonization of accounting and financial reporting resulted from the necessity to standardize various solutions found in accounting theory, practice and policy in particular countries and from the need to develop and implement international patterns of conduct in accounting, as well as in order to make financial reports in global economies comparable (Olchowicz, Tłaczała, 2015). The standards are not strictly provisions of law, but they are reflected in legal regulations of national states referring to the accounting and the financial reporting used there. The aim of the article is to present the changes in the Polish accounting regulations in connection with the transformations that have taken place in the Poland over the past thirty years. The chiefly section is preceded by an outline of Polish and international accounting regulations. The originality of the article lies in tracing the evolution in the Polish accounting laws during the systemic and economic transformation, adjusting them to the EU and IAS/IFRS solutions. The research method consists in reviewing the legal regulations: national, European and international, as the related literature on the subject does not synthetically and comprehensively reflect all changes introduced to the Polish Accounting Act during the period. The article is an attempt to fill this gap. The research hypothesis was verified by checking what changes and at what time were introduced to the Polish Accounting Act in accordance with the amendments of EU and IAS / IFRS laws. It was shown that changes to the Act were introduced regularly and adequately to European law and International Standards. The Act was frequently amended and adapted to new regulations on an ongoing basis, and the hypothesis was positively verified.

The retrospective outline of Polish and international accounting regulations
The Polish economy in 1945-1989 was a centrally-steered economy, with social (state) ownership, deprived of private ownership. The socialized economy was in opposition to the capitalist economy. It was modeled on the Soviet economy, in close connection with it and the economies of other Central and Eastern European countries, which were imposed on socialism and a "planned" economy. In that system, accounting was a tool of central planning, its purpose and addressees were different than in the market economy, and the informative function of financial statements was also different.
Poland has "always" used the continental (German) accounting model in its practice, preferring the valuation of assets and liabilities according to their historical cost. It was only in 1994, when the first Polish Act on Accounting was passed, that Poland started to implement the solutions contained in the Anglo-Saxon accounting model and apply international standards. Already the first version of the Act incorporated some solutions of this model and contained references to international standards.
At some point the establishment of accounting norms was the subject of the state intervention. In the European area this occurred directly in the legal form, in the English and American area stakeholders ordered directly the creation of professional standards. The European mode relied on political will, while the American one requires participation of all interested parties and legitimization that is broader than political will. That is why at the beginning of the 1970s the USA became home to the first board in the world i.e., Financial Accounting Standards Board (FASB) which represented interests of economic entities more fully and whose task was to establish financial accounting standards. The Board was also forced to solve the problem of its own legitimization on the intellectual platform and needed theory that would justify the content of standards and the way of establishing them. However, since accounting has never had a generally accepted scientific theory, the Board formulated it independently in the shape of a concept framework of financial accounting in the mid-1960s. It was then that the main focus shifted from measuring income to generating information for stakeholders who needed it to take economic decisions. This direction is still developing along with the process of globalizing world economies. In Polish one can read "The Concept Assumptions of Financial Accounting" formulated by IASB with its registered seat in London, which establishes financial accounting and reporting standards. Both Boards originate from English and American areas. Financial statements and corresponding measurement, structure and communication patterns, that is financial reporting standards, are the major products of the current stage of development of accounting (Nowak, 2010, pp. 15-20).
It must be remembered that in the searching for generally accepted principles of accounting in the USA there was a significant change and the major focus was shifted to searching conceptual assumptions as the theoretical foundation for standards that have become their major part. "Concept Assumptions", as FASB document, was called the "constitution", on which standards were to rely, while the choice of vocabulary emphasized the political essence of standards. However, the "Concept Assumptions" were not referred to financial accounting, but to financial reporting. The assumptions, contrary to expectations, did not become a generator in the process of developing standards, but their significance gradually decreased and they became only a source of concepts, preserving their political characteristics (Hendriksen and van Breda 2002, pp.138-148).
The recent study of The Routledge Companion (2015 ed. by S. Jones), devoted to the theory of financial accounting, draws attention to the fact that this theory finds many applications in the accounting practice of many entities and also has political implications. The authors of the new standards rely extensively on theoretical assumptions of accounting, and the regulatory bodies in corporations behave in a similar way when establishing regulations and evaluating existing accounting solutions in practice. The theory of accounting deals with formulating and analyzing rules on which the accounting practices rely and supporting them. In the USA these are Generally Accepted Accounting Principles -GAAP (Delaney et al, 2003). The IASB and the FASB have made some attempt to collaborate in the global financial reporting convergence process to align IAS / IFRS and US GAAP smoothly, and then align with other legal systems.

Changes in accounting and financial reporting regulations in Poland adjusting them to European and international solutions
Financial reporting is an integral part of accounting, since the financial reports are the final products of accounting. Accounting and financial reporting are subject to continuous changes as they try to adjust to the developing global economy as well as regional and national economies. The growing flow of goods, services, capital and people attributed to the progressing process of globalization -in the 1990s brought about a change in the purpose of companies' activities and contributed to the increased demand for new information, necessary for management and investment purposes. Since then the top priority has been seen not in increasing short-term profits, but in increasing the value of the company in the long term, whereas financial and non-financial data included mainly in financial reports are used when making strategic decisions and checking their implementation, as well as when managing risk in an enterprise. They are also used by other stakeholders, primarily investors, when choosing an optimal way of allocating capital in selected investment ventures. In 80. years of XX age the harmonization of financial reports has been greatly affected by the UE directives. These were: Directive IV from 25 th July 1978 on principles of making, publishing and auditing annual financial reports, Directive VII from 13 th July 1983 on principles of making, publishing and auditing consolidated financial reports, and Directive VIII from 10 th April 1984 on professional qualifications of persons authorized to audit annual financial reports and requirements to be met by auditing companies in order to be able to audit annual financial reports. However, since Directives IV and VII, in spite of numerous modifications, did not help to achieve the desired state of comparability and transparency of financial reports, the European Commission implemented a new directive on accounting, aimed at decreasing administrative burden, mainly of small companies, and improving clarity (transparency) of financial reports. Accounting in Poland, as mentioned, was based on the continental model and was subject to various legal regulations which covered all its issues, namely bookkeeping, cost accounting and financial reporting. As the Polish state underwent constitutional transformation, accounting was governed by new acts of law in order to adjust it to the free market economy conditions and the information needs of both external and internal users. The first of them was the regulation of the Minister of Finance from 15 th January 1991 on principles of accounting, which normalized the accounting records and the new financial reporting, whereas in other issues (including mostly cost accounting) it referred interested parties to the principles developed by the accounting science and to accounting practice and customs (Regulation of the Minister of Finance, Journal of Laws No 10, item 35, § 3 point 6).
The key legal act, however, has been the Act on Accounting of 29 th September 1994 (Journal of Laws No 121, item 591). The Act was passed when the legal order of the IV Directive of the Council of 25 th July 1978 on annual reports (78/660/EEC) was implemented into the Polish law. The Act includes provisions concerning financial accounting and financial reporting (Article 4 section 3). The issue of costs, that is managerial accounting (in Germanspeaking countries known as controlling), however, was neglected and the provision on applying principles of the accounting science and its practice and customs in matters not regulated by the Act was not repeated, i.e., § 3 point 6 of the aforesaid regulation of the Minister of Finance. According to Sobańska and Walińska (2018, p. 155), this created "regulation and terminology confusion in the subject literature and in accounting practice". The act which regulated accounting and financial reporting while ignoring managerial accounting was called "inadequate to the subject scope" (Sobańska, 2012, p. 179). The Accounting Act has been amended many times in order to adjust it to social, economic and legal  (Dadacz 2018, p. 5-8). The Act also introduced some solutions from the international standards. The first significant amendment was introduced in the Act of 9 th November 2000. It was socalled "big amendment", which brought expended definitions, simplified inventory, changes to report templates and adjustment of accounting principles to the requirement of computer bookkeeping (Gnich, 2002, p. 14). This amendment of the Polish Accounting Act for the most part took into account the provisions of the International Accounting Standards containing solutions used in international practice. It also took into account the needs specific to the developing market economy, in particular with regard to the standardization of the content and scope of information presented in financial statements. New regulations were adopted on issues not regulated by the previous act. At that time, the following was introduced into the law: the principle of "substance over form" and "fair value" as a new parameter for the valuation of certain assets and liabilities, including goodwill and badwill. Detailed provisions of all changes to the Act on Accounting are presented in Table 1 below. . The aim of this amendment was to adapt the Polish Act on Accounting to regulations valid in the EU and the IAS. Some missing provisions were supplemented, concerning, e.g. mergers and takeovers of companies, capital investments, financial leasing, long-term contracts of services, deferred tax; some concepts not used in Polish practice were defined, such as consolidation of financial reports of units in a capital group; the concept of "reporting period" was extended; smaller units were exempted from audit and consolidation thresholds (revenues, balance sheet sum, employment) were increased for small and medium size capital groups; in matters not covered by the Act, it was allowed to use National Accounting Standards (NAS) and if there was a lack of them, IAS. 2 The Act of 27 th August 2004 on Amending the Act on Accounting Journal of Laws No 213, item 2155 (valid since 1 st January 2005). This amendment was connected with Poland's accession to the EU and the adjustment to the Regulation 1606/2002/EC of the European Parliament and of the Council of 19 th July 2002 on the use of IAS. The issuers of securities allowed in one of the regulated markets of the EEA (European Economic Area) and the banks were obliged to make consolidated financial reports in accordance with the IAS starting from 2005. These changes were to allow comparison of data from financial reports of particular units on a global scale as they were made in accordance with the IAS. 3 The Act of 18 th March 2008 on Amending the Act on Accounting Journal of Laws No 63 item 393 (valid since 1 st January 2009). This amendment was to implement in the Polish Act the provisions of Directive 2006/46/EC amending directives IV and VII on annual and consolidated financial reports. It defined, i.e., responsibility of company organs for preparation and publication of financial reports and reports on company activities; it unified the valuation and inventory of investment in real estate; it precised exact situations when opening and closing books, e.g. bankruptcy with an option of making a settlement, division by separation; it limited the method of combining shares when merging companies only to companies which were under joint control; it regulated the commercial bookkeeping in connection with the growing outsourcing of accounting services. It also changed the wording of the provision on exchange rate differences and increased the limit of turnover from which it was necessary to run accounting books from EUR 800 000 to EUR 1 200 000. books and since it came into force, such services could be performed by anyone with full capacity to conduct legal activities, with clean criminal record for some specific crimes and possessing an insurance policy against third party liability. The Minister of Finance thus stopped issuing certificates of an accountant which were necessary in order to offer commercial bookkeeping. Market mechanisms that increase competition and economic freedom should verify access to these services. 5.
The The Act of 26 th January 2018 on Amending the Act on National Court Register and Some Other Acts, Journal of Laws item 398 and 650 (valid since 15 th. March 2018); The change resulting from the amendment to National Court Register was related to the obligation to make separate and consolidated financial reports and a report on the entity's operations in an electronic form. Units covered by the register of enterprises of NCR were obliged to make reports electronically following the logical structure and format given in Public Information Bulletin on the website of the Ministry of Finance and were exempted from the obligation to submit them to the Tax Office. This form is aimed at increasing the security of economic activities and improving insight into the whole information and documentation held by the NCR. 9 The Act of 9 th November 2018 on Amending Some Acts in order to Make Simplifications for Entrepreneurs in Tax and Economic Law, Journal of Laws item 2244 (came into force on 1 st January 2019, with exceptions); On the other hand, amendments resulting from the act on simplifications for entrepreneurs in tax and economic law, known as the so-called Package for Small and Medium-Sized Enterprises, concerned: -raising revenue thresholds (from PLN 17 million to PLN 25.5 million and the balance sheet sum (from PLN 34 million to PLN 51 million), that is to the highest values determined in the directive 2013/34/EU for small entities, whose number thus grew by 3 thousand, that is by over 7%, this is specified in article 3 section 1c and 1d of the Accounting Act; -increasing the number of micro entities which make financial reports, mostly simplified ones, these entities include individuals, civil partnerships of individuals and enterprises inherited, general partnerships of individuals, partnerships, if their net revenues from sale of goods, products and financial operations amounted to, in Polish currency, at least EURO 2 000 000 and not more than EURO 3 000 000 for the previous financial year, these changes are specified in article 3 section 1a and 1b of the Accounting Act; -abolishing the requirement to store the confirmed financial reports for an unlimited period of time and limiting this period to 5 years, as specified in article 74 section 1 of the Accounting Act; -extending the group of entities which are entitled to use the tax definition of financial leasing, that is to classify leasing contracts in a simplified way, following the rules specified in tax provisions, as stipulated in article 3.6; -resigning from determining deferred tax, article 37 section 10; -not valuing assets and liabilities by a micro entity according to their fair value and correcting the purchasing price, art. 28a of the Accounting Act; -small entities do not have to apply provisions on financial instruments (regulation of the Minister of Finance on detailed principles of acknowledging, ways of valuation, scope of disclosing and way of presenting financial instruments), article 28b section 1 in connection with article 81 section 2 point 4 of the Accounting Act; -using simplified principles of calculating costs of manufacturing the product -article 28 section 4a of the Accounting Act; Moreover, in micro and small enterprises which are not covered by the directive on accounting, and in non-governmental organizations, changes referred to: -using tax rules of appreciation of tangible and intangible assets, article 32 section 7 of the Accounting Act; -resignation from creating risk reserves, faced losses and effects of other events and resignation from write-offs updating the value of assets, article 7 section 2a and 2b of the Accounting Act; -resignation from creating accruals for future payments to employees, including retirement pension payments, article 39 section 6 of the Accounting Act. 10 The Act of 31 July 2019 amending certain acts in order to reduce regulatory burdens, Journal of Laws from: 2019 item 1495, 2020 items 568, 875, 2255, 2021 item 255 (comes into force on 1 st January 2020, with exceptions). The amendment to the Accounting Act consisted in adjusting its provisions to the change of the title of the Act quoted on the left from "on succession management by a natural person" to "on succession management by a natural person and other facilities related to the succession of enterprises". In addition, the wording of some articles stating that the financial statement, the report on operations of the entities entered in the National Court Register, the consolidated financial statement and the payment report and the consolidated payment report are prepared in electronic form and bear a qualified electronic signature, trusted signature or with a personal signature. This applies to: article 45 section 1f, article 49 section 7, article 63c section 2a and art. 63k of the Accounting Act. Source: Author's own elaboration. regulatory technical standards concerning the specification of a single electronic reporting format. The adopted standards are an act delegated by the directive, so after being adopted, they are directly applicable in all European Union countries. Under this Regulation 2019/815, issuers are required to prepare their annual financial reports (which also include financial statements) in XHTML format. Where this report will contain consolidated financial statements prepared in accordance with IAS, issuers are required to tag these statements using the Inline XBRL markup language (iXBRL). The XBRL technology has already been implemented in many countries around the world and the European Union has been interested in it for over 10 years. Currently in Poland pursuant to article 45 section 1f of the Accounting Act financial statements are prepared in electronic form and equipped with a qualified electronic signature, a trusted signature or a personal signature. Moreover, according to article 45 section 1g of the Accounting Act entities entered in the register of entrepreneurs of the National Court Register prepare financial statements in a logical structure and format made available in the Public Information Bulletin on the website of the Ministry of Finance [in XML format (Extensible Markup Language)]. On the other hand, according to article 45 section 1h of the Accounting Act financial statements prepared in accordance with IAS are prepared in a logical structure and format, if they are made available in the Public Information Bulletin on the website of the Ministry of Finance -this means that currently these statements can be prepared in any electronic format, e.g., PDF. The new draft is justified by the argument that keeping the current wording of the Accounting Act, while the provisions of Regulation (EU) 2019/815 are in force, would result in the need to use different formats for the same financial statements. This solution was supported by the European Parliament already in 2008 (Resolution 2007/2254). The European Commission has also endorsed XBRL. The obligation to prepare financial statements and submit them to supervisory authorities in a standardized format for companies listed on the regulated markets of the European Union is regulated by Directive 2013/50 / EU of the European Parliament and of the Council. It obliged issuers to prepare annual reports in a single electronic reporting format (ESEF -European Single Electronic Format). ESMA (European Securities and Markets Authority) has been required to develop draft regulatory standards to define an electronic reporting format. ESMA is an independent body of the European Union that aims to improve investor protection and promote stable and efficient financial markets (ESMA, 2020a). ESMA proposed several solutions, including the XBRL technology. The proposed amendment is to adapt the currently applicable provisions on financial reporting and auditing to the current legal and economic situation and to technological possibilities. The dynamic development of digital technologies, which we are currently dealing with, has a significant impact also on accounting and auditing. The possibility of using modern IT tools and digital technologies makes it easier for entities applying the Accounting Act to fulfill their obligations in the field of bookkeeping, preparation of financial statements or remote controls in audit firms. On the other hand, users of these reports can quickly download, analyze and interpret the data they need. The digital transformation of economic life was accelerated by the pandemic caused by the spread of the SARS-CoV-2. Annual reports in the uniform European reporting format (ESEF) were to be prepared for the financial years beginning on or after 1 January 2020. However, in connection with Covid 19, this obligation was postponed by Regulation 2021/337 of February 16, 2021.