Marxist Leninist states in transition to or confronting modern economic globalization, and its business norms, eventually must confront the issue of transparency of operations, especially where an economic organization has investors other than state entities. In that context, the question of the nature of the auditing function arises, and more specifically, the question of the existence of the concept of an auditor (an independent entity, not an internal auditor). Is it possible, for example, for the auditing function to be squared with the fundamental ordering principles of Marxist-Leninist state organization in, say, Cuba or even China?
This question is much more important than it might appear. The short answer is "no." But the short answer is a bit misleading and must be understood in the context of the Stalinist-like apparatus that oversees official life in Cuba. There are people in Cuba (usually attached to the relevant ministries, whose job it is to review the financial dealings of the entities under their supervision. To a great extent this oversight is based on a loosely understood set of accounting standards, though nothing resembling the hyper-complexity of Western style accounting concepts (that sort of refinement will await some future time). All of this auditing is necessarily public. The state essentially owns, for the benefit of the people as a whole, all of the means of production, however organized. And of course, because of the foundations of the state in Marxist Leninist theory, the concept of independence would be impossible. There is no independence of the state. But one has to draw with a finer brush here. An auditor might be independent of the entities they review, though all owe similar allegiances to the same ultimate "owner." Thus, it might be possible to fashion independent auditing more along the lines understood in the West if the auditing or supervising function was vested in a ministry other than that being reviewed. But that is difficult given the realities of power and bureaucracy in Cuba (similar in a way to the apparatus of the later Soviet era).
This is unlikely to change much, assuming a transition to Chinese style global engagement. Indeed, as many people are aware, the Chinese have been investing a tremendous amount of expertise in Cuba and the Cuban military is attempting to copy the Chinese PLA in structuring state ownership through indirect control of enterprises semi-privatized. See, e.g., Cuba-China Relations, Cuba Facts, Issue No. 21 (May, 2006). But at least under this form of economic governance, auditing will begin to look more like that understood in the West (and there will likely be a greater need for Western expertise with respect to the auditing function). And the demand would be focused on the great public/privatized firms rather than on Western style purely private enterprises. And if the Cuban in charge of transition are smart, they will insist on native auditors to perform state regulated audits of all enterprises operating within the national territory, if only to provide a state mandated basis for training a large cadre of people in the globalized auditing function. Foreign auditors that are able to provide aid to those state enterprises as they learn to speak the language of Western accounting will likely find themselves best positioned for the long term. Of course, all bets are off if the Americans are able to effect more dramatic changes after the passing of the current regime's leader. See generally, Backer, Larry Catá, Cuban Corporate Governance at the Crossroads: Cuban Marxism, Private Economic Collectives and Free Market Globalism. Transnational Law & Contemporary Problems, Vol. 14, No. 1, 2005.
This question is much more important than it might appear. The short answer is "no." But the short answer is a bit misleading and must be understood in the context of the Stalinist-like apparatus that oversees official life in Cuba. There are people in Cuba (usually attached to the relevant ministries, whose job it is to review the financial dealings of the entities under their supervision. To a great extent this oversight is based on a loosely understood set of accounting standards, though nothing resembling the hyper-complexity of Western style accounting concepts (that sort of refinement will await some future time). All of this auditing is necessarily public. The state essentially owns, for the benefit of the people as a whole, all of the means of production, however organized. And of course, because of the foundations of the state in Marxist Leninist theory, the concept of independence would be impossible. There is no independence of the state. But one has to draw with a finer brush here. An auditor might be independent of the entities they review, though all owe similar allegiances to the same ultimate "owner." Thus, it might be possible to fashion independent auditing more along the lines understood in the West if the auditing or supervising function was vested in a ministry other than that being reviewed. But that is difficult given the realities of power and bureaucracy in Cuba (similar in a way to the apparatus of the later Soviet era).
This is unlikely to change much, assuming a transition to Chinese style global engagement. Indeed, as many people are aware, the Chinese have been investing a tremendous amount of expertise in Cuba and the Cuban military is attempting to copy the Chinese PLA in structuring state ownership through indirect control of enterprises semi-privatized. See, e.g., Cuba-China Relations, Cuba Facts, Issue No. 21 (May, 2006). But at least under this form of economic governance, auditing will begin to look more like that understood in the West (and there will likely be a greater need for Western expertise with respect to the auditing function). And the demand would be focused on the great public/privatized firms rather than on Western style purely private enterprises. And if the Cuban in charge of transition are smart, they will insist on native auditors to perform state regulated audits of all enterprises operating within the national territory, if only to provide a state mandated basis for training a large cadre of people in the globalized auditing function. Foreign auditors that are able to provide aid to those state enterprises as they learn to speak the language of Western accounting will likely find themselves best positioned for the long term. Of course, all bets are off if the Americans are able to effect more dramatic changes after the passing of the current regime's leader. See generally, Backer, Larry Catá, Cuban Corporate Governance at the Crossroads: Cuban Marxism, Private Economic Collectives and Free Market Globalism. Transnational Law & Contemporary Problems, Vol. 14, No. 1, 2005.
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