Title: Is there a shift in the accounting values in Egypt towards optimism, transparency and professionalism?

Authors: Ahmed Abousamak; Hany Kamel

Addresses: Al Ain University of Science and Technology, UAE; Faculty of Commerce, Suez Canal University, Egypt ' College of Business and Economics, Qatar University, Qatar; Faculty of Commerce, Cairo University, Egypt

Abstract: This paper aims to examine the persistence of the historically assumed accounting values of the Egyptian environment in terms of conservatism, secrecy and statutory control after the adoption of the latest versions of the Egyptian Accounting Standards (EASs). Using information provided in the annual reports of 87 Egyptian listed companies in the year 2009, the results indicate that Egyptian accountants do not require a higher degree of verification to recognise good news than bad news in financial statements. Therefore, it can be argued that Egyptian accounting practices have departed from the accounting value of conservatism and moved towards its opposite value, optimism. In addition, the results demonstrate that there has been a noticeable improvement in the level of transparency in the Egyptian accounting environment and this level is much better than that reported in many other emerging economies. Unexpectedly, however, the documented level of transparency was found to have a negative impact on the shareholders' wealth. Finally, our results illustrate that there has been a statistically significant improvement in the level of professionalism in recent years and this level is significantly positively associated with the companies' share returns performance.

Keywords: accounting values; conservatism; optimism; transparency; professionalism; financial reporting; Egypt; secrecy; statutory control; Egyptian Accounting Standards; EASs; annual reports; emerging economies; shareholder wealth; share returns.

DOI: 10.1504/AAJFA.2015.070294

Afro-Asian Journal of Finance and Accounting, 2015 Vol.5 No.3, pp.265 - 294

Received: 01 Jul 2014
Accepted: 21 Apr 2015
Published online: 01 Jul 2015 *

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