Article: Disclosure practices in Egypt: what are factors beyond the low level? Journal: International Journal of Economics and Accounting (IJEA) 2012 Vol.3 No.3/4 pp.264 - 275 Abstract: In Egypt, as one of the emerging markets, mandatory disclosure of financial information on annual reports has attracted the attention of many researchers. Results of prior studies analysing disclosure level concluded that mandatory financial disclosure in annual reports is low. The purpose of this paper is to shed the light and analyse those factors affecting disclosure level in the Egyptian environment including political and economic conditions, legal system and regulatory framework, nature of the capital market, prevailing culture, and accounting practices. Our analysis suggests that secretive culture is the major reason behind the low disclosure practices found in Egypt overcoming the efforts exerted by regulators. Additionally, the paper provides the reasons that lead to the low disclosure level as follows: 1) presence of uniform, secretive, and conservative accounting practices; 2) absence of a unified law governing Egyptian companies' activities and transactions; 3) lack of strict enforcements imposed by the Egyptian Capital Market Authority on non-complying companies to comply with the mandatory requirements of the Egyptian accounting standards. Inderscience Publishers - linking academia, business and industry through research

Title: Disclosure practices in Egypt: what are factors beyond the low level?

Authors: Tariq H. Ismail; Nermeen F. Shehata

Addresses: Accounting Department, Faculty of Commerce, Cairo University, Nahdet Misr Street, 12613, Orman, Giza, Egypt; Accounting Department, College of Management and Humanities, Majmaah University, P.O. Box 66, Majmaah, Saudi Arabia. ' Accounting Department, Faculty of Commerce, Cairo University, Nahdet Misr Street, 12613, Orman, Giza, Egypt

Abstract: In Egypt, as one of the emerging markets, mandatory disclosure of financial information on annual reports has attracted the attention of many researchers. Results of prior studies analysing disclosure level concluded that mandatory financial disclosure in annual reports is low. The purpose of this paper is to shed the light and analyse those factors affecting disclosure level in the Egyptian environment including political and economic conditions, legal system and regulatory framework, nature of the capital market, prevailing culture, and accounting practices. Our analysis suggests that secretive culture is the major reason behind the low disclosure practices found in Egypt overcoming the efforts exerted by regulators. Additionally, the paper provides the reasons that lead to the low disclosure level as follows: 1) presence of uniform, secretive, and conservative accounting practices; 2) absence of a unified law governing Egyptian companies' activities and transactions; 3) lack of strict enforcements imposed by the Egyptian Capital Market Authority on non-complying companies to comply with the mandatory requirements of the Egyptian accounting standards.

Keywords: financial disclosure; accounting information; accounting practices; annual reports; culture; regulatory framework; International Financial Reporting Standards; IFRS; capital markets; Egypt; accounting standards; enforcement; legislation; law.

DOI: 10.1504/IJEA.2012.049073

International Journal of Economics and Accounting, 2012 Vol.3 No.3/4, pp.264 - 275

Published online: 06 Aug 2014 *

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Title: Disclosure practices in Egypt: what are factors beyond the low level?

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