ISSN: 2616-4310 (Print)
ISSN: 2707-2037 (Online)
IMPROVEMENT OF THE FINANCIAL ACCOUNTING SYSTEM IN AZERBAIJAN BASED ON SUSTAINABLE DEVELOPMENT AND ESG APPROACHES
A B S T R A C T
The purpose of the research is to analyze the current state of the financial accounting system in Azerbaijan within the context of sustainable development goals, to identify key regulatory, institutional, and methodological problems, and to develop scientific and practical recommendations for their resolution.
The methodology of the research is based on a systematic and comprehensive approach, employing comparative analysis, statistical analysis, and analytical generalization methods. The information base consists of data from international organizations (World Bank, IMF, OECD) as well as national sources. The analysis is conducted using an ESG-based approach.
The practical importance of the research lies in the applicability of its results for the development of regulatory reforms, implementation of ESG reporting, enhancement of transparency, and improvement of accounting education systems.
The results of the research indicate that although the financial accounting system in Azerbaijan has largely aligned with international standards, a number of systemic challenges still persist. The implementation of IFRS remains concentrated primarily among large enterprises, while its adoption within SMEs is still limited. Furthermore, the integration of ESG indicators into financial reporting continues to remain at a weak level, whereas the high degree of integration between financial and tax accounting restricts the analytical and managerial capabilities of enterprises. In addition, disparities in the digitalization process, the shortage of qualified human capital, and the insufficient level of investor demand for ESG-related information constitute some of the major obstacles hindering the development of a modern accounting system.
The originality and scientific novelty of the research lies in the fact that the financial accounting system in Azerbaijan is analyzed for the first time comprehensively within the framework of sustainable development and ESG principles. The study evaluates the level of IFRS implementation in a structured manner, presents a cause–effect–risk matrix, and systematizes the identified problems within a unified analytical framework.
Keywords: sustainable development, financial accounting, ESG, IFRS, integrated reporting, digitalization, corporate governance, transparency.
