Introducing international accounting standards to an emerging capital market: relative familiarity and language effect in Egypt

Omneya H. Abd-Elsalam, Pauline Weetman

Research output: Contribution to journalArticle

102 Citations (Scopus)

Abstract

The purpose of this study is to assess the effect of relative familiarity and language accessibility on the International Accounting Standards (IASs) disclosures when IASs are first introduced in an emerging capital market. The study focuses on the annual reports of listed non-financial companies in Egypt when IASs were first introduced. The method used applies a disclosure index measurement to a sample of listed company annual reports and evaluates relative compliance with IASs in relation to corporate characteristics. The results show that for relatively less familiar requirements of IASs, the extent of compliance is related to the type of audit firm used and to the presence of a specific statement of compliance with IASs. A lower degree of compliance with less familiar IASs disclosure is observed consistently across a range of company characteristics. Consideration of agency theory and capital need theory would lead to prior expectation of a distinction in disclosure practices between different categories of companies. The results were, therefore, counterintuitive to expectations where the regulations were unfamiliar or not available in the native language, indicating that new variables have to be considered and additional theoretical explanations have to be found in future disclosure studies on emerging capital markets.
LanguageEnglish
Pages63-84
Number of pages21
JournalJournal of International Accounting, Auditing and Taxation
Volume12
Issue number1
DOIs
Publication statusPublished - 28 Jan 2003

Fingerprint

Emerging capital markets
International accounting standards
Egypt
Language
Familiarity
Disclosure
Annual reports
Audit firms
Disclosure index
Listed companies
Accessibility
Agency theory

Keywords

  • international accounting standards
  • emerging markets
  • familiarity
  • language effect
  • accountancy
  • auditing

Cite this

@article{860961af30294c40b544dd7e8ec28c9a,
title = "Introducing international accounting standards to an emerging capital market: relative familiarity and language effect in Egypt",
abstract = "The purpose of this study is to assess the effect of relative familiarity and language accessibility on the International Accounting Standards (IASs) disclosures when IASs are first introduced in an emerging capital market. The study focuses on the annual reports of listed non-financial companies in Egypt when IASs were first introduced. The method used applies a disclosure index measurement to a sample of listed company annual reports and evaluates relative compliance with IASs in relation to corporate characteristics. The results show that for relatively less familiar requirements of IASs, the extent of compliance is related to the type of audit firm used and to the presence of a specific statement of compliance with IASs. A lower degree of compliance with less familiar IASs disclosure is observed consistently across a range of company characteristics. Consideration of agency theory and capital need theory would lead to prior expectation of a distinction in disclosure practices between different categories of companies. The results were, therefore, counterintuitive to expectations where the regulations were unfamiliar or not available in the native language, indicating that new variables have to be considered and additional theoretical explanations have to be found in future disclosure studies on emerging capital markets.",
keywords = "international accounting standards, emerging markets, familiarity, language effect, accountancy, auditing",
author = "Abd-Elsalam, {Omneya H.} and Pauline Weetman",
year = "2003",
month = "1",
day = "28",
doi = "10.1016/S1061-9518(03)00002-8",
language = "English",
volume = "12",
pages = "63--84",
journal = "Journal of International Accounting, Auditing and Taxation",
issn = "1061-9518",
number = "1",

}

Introducing international accounting standards to an emerging capital market: relative familiarity and language effect in Egypt. / Abd-Elsalam, Omneya H.; Weetman, Pauline.

In: Journal of International Accounting, Auditing and Taxation, Vol. 12, No. 1, 28.01.2003, p. 63-84.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Introducing international accounting standards to an emerging capital market: relative familiarity and language effect in Egypt

AU - Abd-Elsalam, Omneya H.

AU - Weetman, Pauline

PY - 2003/1/28

Y1 - 2003/1/28

N2 - The purpose of this study is to assess the effect of relative familiarity and language accessibility on the International Accounting Standards (IASs) disclosures when IASs are first introduced in an emerging capital market. The study focuses on the annual reports of listed non-financial companies in Egypt when IASs were first introduced. The method used applies a disclosure index measurement to a sample of listed company annual reports and evaluates relative compliance with IASs in relation to corporate characteristics. The results show that for relatively less familiar requirements of IASs, the extent of compliance is related to the type of audit firm used and to the presence of a specific statement of compliance with IASs. A lower degree of compliance with less familiar IASs disclosure is observed consistently across a range of company characteristics. Consideration of agency theory and capital need theory would lead to prior expectation of a distinction in disclosure practices between different categories of companies. The results were, therefore, counterintuitive to expectations where the regulations were unfamiliar or not available in the native language, indicating that new variables have to be considered and additional theoretical explanations have to be found in future disclosure studies on emerging capital markets.

AB - The purpose of this study is to assess the effect of relative familiarity and language accessibility on the International Accounting Standards (IASs) disclosures when IASs are first introduced in an emerging capital market. The study focuses on the annual reports of listed non-financial companies in Egypt when IASs were first introduced. The method used applies a disclosure index measurement to a sample of listed company annual reports and evaluates relative compliance with IASs in relation to corporate characteristics. The results show that for relatively less familiar requirements of IASs, the extent of compliance is related to the type of audit firm used and to the presence of a specific statement of compliance with IASs. A lower degree of compliance with less familiar IASs disclosure is observed consistently across a range of company characteristics. Consideration of agency theory and capital need theory would lead to prior expectation of a distinction in disclosure practices between different categories of companies. The results were, therefore, counterintuitive to expectations where the regulations were unfamiliar or not available in the native language, indicating that new variables have to be considered and additional theoretical explanations have to be found in future disclosure studies on emerging capital markets.

KW - international accounting standards

KW - emerging markets

KW - familiarity

KW - language effect

KW - accountancy

KW - auditing

UR - http://dx.doi.org/10.1016/S1061-9518(03)00002-8

U2 - 10.1016/S1061-9518(03)00002-8

DO - 10.1016/S1061-9518(03)00002-8

M3 - Article

VL - 12

SP - 63

EP - 84

JO - Journal of International Accounting, Auditing and Taxation

T2 - Journal of International Accounting, Auditing and Taxation

JF - Journal of International Accounting, Auditing and Taxation

SN - 1061-9518

IS - 1

ER -