The rationale and impact of the adoption of International Financial Reporting Standards: the case of the United Arab Emirates (original) (raw)

The globalization of accounting standards: the case of the United Arab Emirates

Faculty of Commerce-Papers, 2006

Global accounting standards: the case of the United Arab Emirates

International Financial Reporting Standards (IFRS) are a manifestation of globalization, with financial reports prepared under IFRS presenting an image consistent with that of multinational corporations and developed countries. Developing countries and emerging economies, in pursuing the global economic benefits offered by the adoption of IFRS, face challenges in adapting their regulatory infrastructure and culture to westernoriented accounting standards. Based on data gathered primarily from archival sources, this paper suggests that the UAE, in embracing globalization and adopting IFRS, will need to develop appropriate regulatory systems to overcome cultural issues relating to secrecy and fraud. Word count: 2,850 JEL Code: M41 "Globalized accounting standards: the case of the United Arab Emirates" Abstract. International Financial Reporting Standards (IFRS) are a manifestation of globalization, with financial reports prepared under IFRS presenting an image consistent with that of multinational corporations and developed countries. Developing countries and emerging economies, in pursuing the global economic benefits offered by the adoption of IFRS, face challenges in adapting their regulatory infrastructure and culture to westernoriented accounting standards. Based on data gathered primarily from archival sources, this paper suggests that the UAE, in embracing globalization and adopting IFRS, will need to develop appropriate regulatory systems to overcome cultural issues relating to secrecy and fraud.

The development of accounting practices and the adoption of IFRS in selected MENA countries

Journal of Accounting in Emerging Economies

Purpose The purpose of this paper is to examine the level of accounting development and the adoption of IFRS in the four foremost economies in the Middle East and North Africa (MENA)—Egypt, Jordan, Libya and UAE. Through the lens of institutional theory, the study investigates the impact of economic, political, legal and cultural institutions on the development of these countries’ accounting practices and their readiness to use IFRS. Design/methodology/approach This research uses accounting development indices obtained from current literature as well as recent World Economic Forum and UNCTAD reports to examine the development of accounting in these MENA countries and their inclination to adopt IFRS. Findings The study identifies a number of impediments to the development of accounting practices and adoption of IFRS in these countries. It also reveals that three of the four MENA countries (Egypt, Jordan and UAE) could be placed on a level playing field with their principal trading pa...

A research about adoption of international financial reporting standards on G20 countries

The existence of particular accounting and reporting systems for companies operating in different countries creates a difficulty in making comparisons among these companies. One of the most important attempts to fix this problem is the enforcement of IFRS as a single standard in all countries. The aim of this research is to identify the current situation of G20 countries regarding the adoption of IFRS as a global standard. To this end, the current status of IFRS and the process of its adoption in G20 countries is examined in order to determine the extent of IFRS's adoption as a global accounting standard. For this purpose, certain criteria are determined by analyzing the reports prepared by IASB on the IFRS applications in 143 countries and then content analysis of the country reports of the G20 countries are provided based on these criteria. According to the findings of the study, although it is possible to observe that all G20 countries except USA accept IFRS as the global accounting standard, this does not lead to the adoption of IFRS at the national level. Most G20 countries either adopted IFRS or making preparations for its adoption. However, the facts that IFRS is not applied in the world's two biggest economies, USA and China, as well as in Indonesia and India and its only partial application in Saudi Arabia and its status of optional application in Japan are striking. As a result it is possible to claim that even though IFRS has expanded largely, there is still room for progress to become the single global accounting language. Current literature on IFRS usually focuses on single countries or comparisons of few countries. This study will provide a contribution to the field by presenting the current situation in the entire G20 countries.

Accountants’ Perceptions on the Adoption of International Financial Reporting Standards in Yemen

2016

Developments in the global capital market have made the adoption of International Financial Reporting Standard (IFRS) more significant than ever before. The purpose of this study is to examine the accountants’ perception of IFRSs adoption in Yemen. We also seek the accountants’ view on whether Yemen should adopt the IFRSs or not, and on the expected time taken to adopt the accounting standards. We also examine the difference in opinion between academicians and practitioners regarding the adoption of IFRSs. In this regard, this study carries out a survey of 48 Yemeni accounting postgraduate students in Malaysian public universities. We find that a majority of the respondents acknowledge the benefits of adopting IFRSs in Yemeni companies. Moreover, a majority of the respondents (82.9%) agree that Yemeni companies should adopt IFRSs. About 58.6% of respondents expect the period of IFRSs adoption in Yemen to be within three to 10 years, while 41.5% expect it to be more than 10 years. Th...

Main Worldwide Cultural Obstacles on Adopting International Financial Reporting Standards (IFRS)

In recent times, the history of a country"s culture has become increasingly recognised as a crucial factor in its accounting methods. The globalization of the practice of economics has lead to homogenous international standards which are at the core of its development for practitioners, researchers and academics. This research considered some factors that might influence the adoption of International Financial Reporting Standards (IFRS) as cultural obstacles. This study investigates the religion, the language, technical skill and expertise as main cultural obstacles for the adoption of IFRS worldwide. Findings revealed the incompatibility of many IFRS with principles of Islamic religion, and also many non-English countries apply wrong implementation of IFRS because of translation issues of IFRS from English to their local languages. This study concluded that it is difficult to adopt IFRS in some countries and for some institutions because of the insufficient technical skill and experience of accountants and auditors to deal with those standards.

The Impact of International Financial Reporting Standards on Global Accounting Practices

Advances In Applied Accounting Research, 2024

This study examines the impact of International Financial Reporting Standards (IFRS) on global accounting practices, focusing on financial reporting quality, economic outcomes, and the influence of regulatory and cultural contexts. Research Design and Methodology: A mixed-methods approach was employed, combining qualitative interviews with accounting professionals and quantitative analysis of financial statements from various countries. The study investigates the benefits and challenges of IFRS adoption, considering factors such as regulatory environments, cultural differences, and economic development levels. Findings and Discussion: The findings reveal that IFRS adoption enhances financial reporting quality by increasing transparency, reducing earnings management, and improving comparability of financial statements. These benefits are most pronounced in countries with strong regulatory frameworks. However, challenges include high costs and complexities of the transition process, especially for smaller firms and developing countries. Cultural and institutional factors significantly influence the effectiveness of IFRS adoption, with varying impacts across different economic contexts. Implications: The study's results underscore the need for supportive regulatory environments and adequate training for accounting professionals to facilitate effective IFRS adoption. Policymakers and regulators should consider tailored approaches to address specific challenges faced by different countries. Companies, particularly in developing regions, must plan and allocate resources carefully to manage the transition to IFRS. These insights offer practical guidance for enhancing the effectiveness of IFRS implementation worldwide.

International financial reporting standards: A cautionary note for emerging economies

Business Review, 2011

Long before the present economic crisis unfolded, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) had been working to achieve harmonization in accounting and financial reporting standards across the globe. Now that the world economic community has become more integrated, cross border flow of capital has gained unprecedented momentum and steps are underway to achieve this goal as early as possible. Initial efforts to harmonize local accounting principles and practices with those followed in developed economies were generally aimed at facilitating foreign multinationals operating in other countries. The desired goal of harmonization now ought to be formulation of accounting standards that would facilitate optimal resource allocation for economic growth and prosperity and proper training of accountants with an informed professional outlook. Harmonization of accounting practices and procedures in emerging economies, therefore, should not be viewed as simply a process of complying with externally imposed standards. Rather, the process should involve exchange of ideas among all the participants. For such exchange of ideas to be meaningful, a critical examination of the factors that contributed to standards of reporting financial information is necessary. Discourse on such a vast topic requires an extensive work, which is beyond the scope of this paper. However, since United States of America has been at the forefront of codifying accounting principles, this paper is selectively focused on some contentious financial reporting issues and controversies that have impeded the development of a cohesive theory governing accounting standards for measurement and reporting of enterprise performance.

Adoption of International Financial Reporting Standard: A Literature Review

American Journal of Economics and Business Innovation, 2022

International Financial Reporting Standard (IFRS) refers to a unique, uniform, simple, and easily understandable accounting standard acceptable and applied across the globe by various firms. It is emerging as a powerful device to bring uniformity to financial reporting by companies at the global level. Due to rapid industrialization and internationalization, the countries opened their avenue to foreign corporations. Therefore, it has been necessitated to have an accounting system that could bring uniformity and acceptability to financial reporting across borders. This review article has explored the present situation of the IFRS in the light of its emergence at the global level. The paper also proposes the model by merging the IFRS constructs with FDI, robust financial information reporting, transparency, and comparability construct by drawing together and developing the scale for measuring quality financial information through International Financial reporting standards based on existing literature. Against this backdrop, the present review paper seeks to highlight different dimensions and the pros and cons of using the International Financial Reporting Standard across borders. The content analysis has been adopted as the methodological framework for the literature review. The result of studies have confirmed that IFRS assimilation will improve transparency, comparability across the spectrum.

The rationale and impact of the adoption of International Financial Reporting Standards: the case of the United Arab Emirates (original) (raw)

Related papers