یک بررسی در مورد مناسب بودن استانداردهای حسابداری بین المللی در محیط امارات متحده عربی

This study is an attempt to investigate empirically the suitability of the international accounting standards (IASs) to the United Arab Emirates (UAE) environment. A variety of parametric and nonparametric approaches were used to examine the underlying factors that could affect the level of adoption of IASs and to evaluate the suitability of such adoption to the UAE environment. The major finding of this study is that the companies examined have vigorously adopted IASs and 87 percent of the companies disclosed their financial information in the English language which can be considered as a robust factor for adopting IASs. This study finds that the size of the companies (as measured by total assets) in the UAE has a significant effect on the level of adoption of IASs. However, the type of sector and the trading status (listed or unlisted) have no significant effect on the level of adoption of IASs. This study also tests to determine if a general consensus exists between the user groups of financial information (auditors, brokers, finance managers, and financial analysts) regarding their perception of the adoption of IASs in the UAE. It is found that there is a general consensus among the user groups on the suitability of adoption of IASs in the UAE.

Corporate financial reporting is considered to be the most important source of information for shareholders, investors, legislators, government regulatory bodies, employees, accounting professionals, academic researchers, financial analysts, and managers. This reporting provides quantitative and qualitative information about the economic entity. It is intended to help the user groups to utilize the financial information as a vital input for making a wide range of economic decisions. However, these groups have different objectives in using the corporate financial reporting and sometimes have different information needs as well (Benjamin & Stanga, 1977). Therefore, the corporate financial reporting should be relevant and reliable to serve the needs of these groups. According to the literature, the use of the international accounting standards (IASs) would enhance the comparability of financial statements and make them more reliable. Abu-Ghazaleh (1986) stated, “With the growth in international trade and the development of international capital markets there is a need internationally to raise the level of accounting practice and at the same time to obtain greater harmonization of financial statements.” The International Accounting Standards Committee (IASC) was founded in June 1973 as a result of an agreement by accountancy bodies in Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the United Kingdom, Ireland, and the United States. These countries constituted the Board of IASC at that time. Forty-one IASs were issued by The IASC from 1973 to 2000 (International Accounting Standards Board (IASB), 2005). The IASB, which is based in London, replaced the IASC in 2001. Since then, the IASB has amended or proposed to amend some IASs. It proposed to replace some of them with new International Financial Reporting Standards (IFRSs) and has adopted or proposed certain new standards on topics for which there were no previous IASs. To date, IASB has issued the following standards and their interpretations (Deliotte, 2006): IFRS 1—first-time adoption of IFRSs (effective date, 1 January 2004),1 IFRS 2—share-based payment (effective date, 1 January 2005), IFRS 3—business combinations (effective date 31 March 2004); IFRS 4—insurance contracts (effective date, 1 January 2005),2 IFRS 5—non-current assets held for sale and discontinued operations (effective date, 1 January 2005), IFRS 6—exploration for and of evaluation mineral assets (effective date, I January 2006), and IFRS 7—financial instruments: disclosure (effective date, I January 2007). Kathryn (2005) documented that about 100 countries, starting from 2005, have adopted IFRSs on a mandatory or voluntary basis. While most of the European Union countries have chosen to adopt these standards, several members have not. One of the major issues limiting the adoption of IFRSs by all countries may be the goal of the IASB to offer one-size-fits-all regulatory environments. That goal makes countries with different regulatory environments struggle and fail in their compliance with these standards. Many developing countries have adopted all or some of the IASs. As the 1988 survey of the use and application of IASs showed, financial statements of a substantial majority of major business enterprises around the world conform to the IASs. It was reported (World Accounting Report, September, 1986) that Pakistan issued a Government Ordinance reporting compliance with IASs. In 1977, the Institute of Chartered Accountants of Nigeria issued a statement requiring its members to follow IASs when preparing and presenting financial reports (Wallace, 1987). In 1989, the Jordanian Association of Certified Public Accountants issued a statement requiring Jordanian corporations to follow IASs when preparing and presenting financial reports. Based on two surveys conducted in 2004, this study attempts to investigate empirically the suitability of the IASs to the United Arab Emirates (UAE) environment. The UAE is situated in the Western region of Asia. Its borders are the Gulf of Oman, the Arab Gulf, the Sultanate of Oman, and the Kingdom of Saudi Arabia. It comprises of seven Emirates, which included Abu Dhabi, Dubai, Sharjah, Ras AI-Khaimah, Ajman, Umm Al-qaiwain, and Fujairah. Its economic philosophy is based on the adoption of market economy and liberalization of trade, which makes the UAE capable of adopting its own local laws with those of its international counterparts. There are potentially important implications arising from this research as all public joint stock companies in the UAE will be required to be listed on the public markets, and the number of listed companies is expected to increase substantially.3 The Abu Dhabi Securities Market and the Dubai Financial Market both seek to facilitate the trading of securities of UAE public companies in a fair, efficient, and transparent manner. In the UAE, two central bodies (the Ministry of Economy and Planning, and the Central Bank) have the authority to establish the corporate financial reporting requirements. The companies Act No. 8 for the year 1984 requires all companies in the UAE to maintain proper financial records of their operations and to present true and fair financial statements to the federal and state authorities. Another official body that has an important effect on the accounting profession is the Accountants and Auditors Association (AAA) of the UAE. The AAA is the official body that represents the accounting profession in the country. It was established by a ministerial decree to play a significant role in developing international best accounting practice in the UAE. To the best of our knowledge, no work to date has specifically examined the suitability and adoption of IASs and their impact upon corporate annual reports in the UAE. The study of the UAE environment, with newly created public financial markets, presents an interesting case study for the adoption of IASs not long after the imposition of the requirement for adherence to these standards by the Central Bank. However, this law applies only to banks and similar financial institutions. The main purpose of this study is to evaluate the corporate annual reports issued by the UAE companies with reference to IASs. This study, in particular, aims to examine the suitability of adoption of IASs and their impact on corporate reporting practices in the UAE through analyzing the perceptions of preparers and users of financial information. In addition, it examines the underlying factors that affect the adoption of IASs in the UAE. Although this study has specific relevance to the needs of the UAE environment, it is believed that many other developing countries, especially those countries in the Middle East that face similar problems and needs, could be the beneficiary of its findings. In addition, this research is expected to further explain the linkage, if any, between the adoption of IASs and the development of financial markets in these types of countries. Global financial markets demand international consistency in accounting and auditing standards and approaches (Ernst & Young, 2004). Thus, this research is considered important because it emphasizes the development of financial markets in the Middle East region, through the adoption of IASs, that will improve the comparability, reliability, and relevance of financial information. Jones (2005) stated, “The global markets require a similar set of international rules to achieve a smooth functioning of the market economy. These rules should protect things such as physical and intellectual property rights and privacy and ensure trustworthy digital transactions and ethical advertising.” She also added that these global markets play a significant role in increasing the need for high-quality financial information.

This study documents that the sample companies adopted IASs. Eighty-seven percent of them disclosed their financial information in the English language, which is considered as a robust factor for adoption of IASs. The results of this study provide evidence that adoption of IASs would result in enormous advantages which would encourage more companies in the UAE to adopt IASs in the near future. The study reveals that adoption of IASs by UAE companies would improve the comparability, reliability, and relevancy of financial information. Moreover, this study has identified the underlying factors that could have an effect on the level of adoption of IASs in the region. The study found that size (as measured by assets) of the companies has a significant effect on the level of adoption of IASs. On the other hand, the type of sector and the trading status of the companies show no significant effect on the level of adoption of IASs. Different tests were employed to examine the level of consensus among and between the user groups on their opinion about the suitability of adoption of IASs. The results show that there is a general consensus among the user groups about the suitability of adoption of IASs in the UAE. To maximize the benefits of adoption of IASs, this study recommends that it would only be necessary to modify those IASs that need to be adapted to suit the local environment. These modifications or exceptions should not be significant; otherwise, it will reduce comparability and transparency of financial statements (Taylor & Jones, 1999). It is important to note that the IASB needs to do more than merely issue IASs. Rather, it needs to market the standards and to create the need for those standards in environments different from those that form the basis for the IASs. More importantly, the IASB should conduct research on the needs for accounting standards in some developing countries, including the UAE. This study suggests a number of effective recommendations that could improve the corporate reporting practices in the UAE. They are considered to be more crucial for the development of accounting standards suitable for the local environment. They include: (a) to create an effective accounting education system, (b) to update regulations and policies surrounding the accounting systems, (c) to establish accounting development centers in the major universities in the UAE, (d) to collaborate with international organizations such as IASB, (e) to adapt the IASs to suit the local environment in the UAE, (f) to undertake research studies into the state of problems in the UAE, and (g) to translate IASs into Arabic. Introduction of recommendations (a)–(g) would significantly improve the financial reporting practices of the business entities in the UAE. Since the UAE is a developing country whose stock markets are going international, adoption of IASs would improve its access to international financial markets and achieve greater international harmonization of financial reporting. In conclusion, the UAE environment seems to be suitable to adopt IASs and to have a higher quality of financial reporting. It is hoped that this study will provide a better understanding of the issues related to the adoption of IASs, especially, in developing countries.