|Numerous efforts have been made to harmonize accounting
standards around the world. Most countries all over the world have
adopted the International Financial Accounting Reporting Standards
(IFRS)  to enhance the transparency and comparability of financial
information that they produce. This makes the IFRS adoption mandatory
for listed companies in most of these countries. The IFRS Backgrounder
(AICPA) states that, “Approximately 120 nations and reporting
jurisdictions permit or require IFRS for domestic listed companies,
although approximately 90 countries have fully conformed with IFRS as
promulgated by the IASB and include a statement acknowledging such
conformity in audit reports”. This has been described as a “watershed”
in financial reporting  and is generally considered a necessary step
towards reducing the variation in financial reporting and disclosure,
and enhancing recognition and measurement practices worldwide.
|Researchers have shown a great deal of interest in studying IFRS
issues related to disclosure [3,4]. In addition, the relevant literature
includes other studies that address the value relevance of IFRS
disclosure [5-7]. However, there is a gap in the literature in relation to
compliance with IFRS . The empirical work has not focused enough
on compliance with IFRS recognition and measurement requirements
and the practice of Fair Value Accounting, especially in GCC countries.
|The literature provides empirical evidence that the overall
disclosure levels of firms in developed countries are higher than those
in developing countries. The latter generally experience inadequate
levels of corporate financial disclosure. Al-Shammari et al.  test
the extent of compliance with International Accounting Standards
(IASs) for the 2 period 1996 to 2002 using the GCC region. They state
that, “The adoption of IASs in the region is de jure but not de facto,
that is, IFRSs are adopted by law but not in practice, as substantial
noncompliance is observed”. This suggests that the adoption of IFRS
is a function of the presence of an effective legal framework for the
accounting profession, organized financial markets, and a supply of
qualified accounting professionals. The absence of all or any of these
hinders effective adoption.
|In short, IFRS has been developed by the International Accounting
Standards Board (IASB) and is to be implemented without regard for
differences in socio-economic and political environments between different countries. IASB has no power in any country and the adoption
of IFRS depends on national regulatory bodies . These bodies are
supposed to enforce and monitor IFRS adoption to ensure and maintain
full IFRS adoption. The listed companies in most countries claim to
operate according to IFRS. There is the danger that, unless regulatory
bodies have enforcement and monitoring mechanisms, adoption of the
IFRS will be partial, especially if there is no motivation for mangers
to implement it . This may indicate that IFRS adoption in countries
which have weak regulatory frameworks and enforcement mechanisms
may still lack quality in their financial reporting . This may apply in
the case of GCC countries because accounting, as a profession, and in
particular as a financial reporting and disclosure system, lags behind
the development and growth of the economy and business sector .
- International Financial Reporting Standards (IFRS) An AICPA Backgrounder.
- Cairns D (2003) Plenary Address, European Accounting Association Annual Meeting. Seville, Spain.
- Al-Shammari B, Brown P, Tarca A (2008) An investigation of Compliance with International Accounting Standards by Listed Companies in the Gulf Co-Operation Council Member States. The International Journal of Accounting 43: 425–447.
- Hussainey K, Mouselli S (2010) Disclosure Quality and Stock Returns in the UK. Journal of Applied Accounting Research 11: 154 – 174.
- Daske H, Hail L, Leuz C, Verdi R (2008) Mandatory IFRS Reporting Around the World: Early Evidence on the Economic Consequences. Journal of Accounting Research 46: 1085- 1142.
- Hassan O, Romilly P, Giorgioni G, Power D (2009) The Value Relevance of Disclosure: Evidence from the Emerging Capital Market of Egypt. The International Journal of Accounting 44: 79-102.
- Alali F, Cao L (2010) International Financial Reporting Standards: Credible and Reliable? An Overview. Advances in International Accounting26:79-86.
- Leuz C, Wysocki PD (2008) Economic Consequences of Financial Reporting and Disclosure Regulation: A Review and Suggestions for Future Research.
- Ball R, Davant D (2006) International Financial Reporting Standards (IFRS): Pros and Cons for Investors. Accounting and Business Research 5-28.
- Alzarouni A, Aljifri K, Ng C, Taher MI (2011) The Usefulness of Corporate Financial Reports: Evidence from the United Arab Emirates. Accounting and Taxation 3: 17-37.