Summary on the Development of Accounting and Auditing Practises

towards IFRS-IAS/ISA in Jordan: Historical and Theoretical

Perspective

ESRAA ESAM ALHARASIS1, HOSSAM HADDAD2,3, HUSNI K. AL-SHATTARAT4,

NIDAL MAHMOUD AL-RAMAHI4

Department of Accounting, College of Business,

Mutah University,

Karak,

JORDAN

2Business Faculty,

Zarqa University,

Zarqa 11831,

JORDAN

3College of Business Administration,

University of Business and Technology,

Jeddah,

SAUDI ARABIA

4Department of Accounting,

Zarqa University,

Zarqa,

JORDAN

Abstract: - In this article, we take a look at the evolution of accounting in the Middle East [ME] region, with a

focus on Jordan. We shall examine the major events in this region's history and see how they relate to the

global accounting agenda, changes in the local and international economic landscape, and other relevant

developments. Pay close attention to how cultural and historical factors, in addition to worldwide accounting

principles, impact the local accounting environment. The adoption of “International Financial Reporting

Standards” [IFRS] by MENA nations is examined, along with the reasons and motives behind it, and the effects

on the auditing and accounting professions as a whole. This marks a significant milestone in recent history.

This article looks at the history of accounting and auditing in Jordan and how it has developed in relation to the

International Accounting and Auditing Standards. It also discusses potential future advances in this field.

Key-Words: - International Financial Reporting Standards, International Standards on Auditing, Institutional

Theory, Accounting and Auditing Framework, Developing Economies, Middle East and North

Africa, Jordan.

Received: May 16, 2023. Revised: March 2, 2024. Accepted: March 19, 2024. Published: April 12, 2024.

1 Introduction

Conventional methods of accounting regulation are

becoming increasingly insufficiently prepared to

address the demands and expectations of global

stakeholders in light of the rapid transformations

taking place in the global business landscape.

Nations such as the “Middle East and North Africa”

(MENA) have moved from their local “Generally

Accepted Accounting Principles” (GAAP) to IFRSs,

]1], [2[ . This move aimed to enhance accounting

systems in order for the financial, economic,

political and social aspects of life to work properly.

This move touched upon some cultural and ethnic

forces deeply rooted in accounting practices and

financial reporting system. Understanding of

accounting environment and development pattern in

the region motivates this paper and is essential to

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appreciate ongoing changes across all areas of life in

the region, [3].

Natural resource disparities are a major

contributor to the economic diversity in the MENA

area. In order to maintain their economic

cooperation and political integration, these nations

will likely depend on international funding and

investments, which will connect them to the global

environment heads, [4], [5]. Having clear and

transparent accounting standards is crucial when

dealing with investors, business partners, and

international buyers, [6], [7]. The countries of the

MENA region have their own distinct political,

cultural, legal, and economic climates, which

contribute to their allure, [1], [8], [9]. Shared

history, language, religion, beliefs, traditions, and

location strengthen the cultural, social, and

economic life of MENA nations, which is why

accounting study on these countries is gaining

popularity, [10], [11]. Adoption of IFRS and other

significant accounting reforms are the result of a

confluence of political, financial, and technical

developments that have far-reaching consequences,

[12].

The study shows a growing interest in the ME

accounting environment as a gateway for

international investments, [13], [14], given there is

minimal information accessible about the region

generally and Jordan specifically. The present and

future legislative advances by government

authorities to promote advantageous financial

reporting circumstances provide more

encouragement, especially given the tremendous

changes happening in the ME corporate

environment, [15]. One way to do this is to boost the

profile of Jordan and the Middle East in the global

marketplace, [16].

Even though it is located in a very unstable area,

Jordan's government is quite stable. A number of

crises, notably those in Iraq, Syria, and Palestine,

have altered the political and economic landscape of

the Middle East in recent years. Economic growth in

Jordan has been stunted in recent years due to the

country's precarious political and economic climate.

Even while the government became more involved

in these political situations in neighbouring

countries, the foundations of those economies were

already in place. Because of these political and

cultural considerations, Jordanian companies have

improved their practices and the way they disclose

financial data, ]14[. The paper's key contribution is

an analysis of Jordan's regulatory, political, and

economic landscape, with a particular emphasis on

the country's evolving financial reporting and

accounting system, which includes its adoption of

IFRS. Foreign investors must have a thorough grasp

of Jordan's present economic climate, and this

review provides just that. Very little has been

written on this subject in the academic literature,

]17[.

A comprehensive analysis of these topics in the

MENA region, with a focus on Jordan, is developed

in this study to fill this gap. Additionally, the study

helps to promote the Middle East and Jordan in the

global commercial arena and solidifies its position

in economic literature. Using pre-existing

accounting theories—and institutional theory in

particular—the article not only covers the facts and

empirical research, but it also gives a theoretical

explanation of the antecedents. By providing a

bird's-eye view, we can better understand the

present economic climate and how future events will

affect it. The third and last section of the report

offers suggestions to government officials and

regulators on how to improve the business climate,

boost company expansion, and entice international

investment. These suggestions are based on research

into local and global economic trends, cultural

sensitivity, and historical context. Consequently, the

purpose of this paper is to initiate a conversation

that may lead to responses to the following two

research questions:

1. In what ways did the Jordanian government

weigh the pros and cons of IFRS adoption?

2. What factors are anticipated to exert an

influence on the present and future

trajectory of the accounting system and the

ongoing progress of auditing and accounting

in Jordan?

This is the structure that the rest of the paper

follows. An overview of Jordan's history and

economics is given in Section 2. The evolution of

auditing and accounting in Jordan is detailed in

Section 3. In Section 4, we discuss the study's

theoretical underpinnings and, using an institutional

perspective. Section 5 offers lessons from Jordan's

deployment of IFRS and explores the reasons for it

in light of institutional theory. The paper comes to a

close in Section 6.

2 History and Economy of Jordan

Jordan is a constitutional monarchy and one of the

fast-developing Arab countries located in the

Middle East. Jordan is classified by the “World

Bank” [WB] Among fourteen MENA economies,

Jordan's ranks fourth in terms of economic freedom

in 2019, [2], as an upper middle-income country

region and the 53rd freest economy in the world,

[3]. Rights and responsibilities are established for

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the benefit of Jordan's whole society under the

country's legal system, ]3[. Some have proposed it,

including, [2], in order to improve Jordan's financial

reporting structure and make the country's economy

more accessible to global commerce, the country's

financial markets need to be reformed and new rules

issued or revised. In order to grow its economy and

attract international investors, Jordan has adopted

the “International Accounting Standards”

(IAS)[/IFRS], the most significant reform that has

been executed, ]14[.

The contextual factors inside a country

determine its standards, procedures, policies, and

ambitions. Therefore, it is critical to understand

Jordan's unique qualities and how they influence the

country's economy and the accounting and auditing

industry, [3], [11], [15], [16], [17].

Both regional and international factors have

played significant roles in shaping Jordan's

economic landscape. The government has developed

economic strategies to enhance economic growth,

particularly after the 1948 conflict, and the area has

maintained political stability for the most of its

modern history, [18], [19], [20], [21]. As a result of

the Arab-Israeli war in 1948, the massive inflow of

Palestinians refugees gave spirit to Jordan's

economy. At that time, Jordan’s population tripled

from about 500,000 to 1.5 million in period 1948-

1950. This flow of financial and human capital

caused the increasing demand for housing, goods,

and services, boosting production, [22], [23], [24],

[25]. Further to this, the Palestinian entrepreneurs

played a critical role in activating the private sector.

They joined the Jordanian commercial elite in

establishing small and medium enterprises which

were mainly concentrated in the Amman area, [26].

Table 1. Industrial Production of Selected

Commodities

Source: Compiled by the authors based on [10]

Economic planning and the “Import Substitution

Industrialization” (ISI) approach are two examples

that fit this description and helped increase Jordan's

GDP. The first blueprint was approved between

1962 and 1967 and consisted of constructing the

fundamental public services and infrastructure, ]27],

[28], [29], [30[. The Aqaba port and other Jordanian

industries began to take shape in the mid-1960s

(Table 1).

The export of phosphate and potash has been the

target of several attempts to expand the economy. A

rise in the “Gross Domestic Product” (GDP) per

capita from 1968 to 1972 is one indicator of how

this contributed to the expansion of Jordan's

economy (Table 2). However, the GDP per capita

increased during this period with the exception of

the 1970 but this increase was consequential. The

real income per capita fell slightly due to the

abnormal increase in population, [31], [32], [33],

[34], [35]. In addition, during this period Jordan lost

its relationship with the West Bank, which

participated about 30-40% of GDP, [36], [37[.

Table 2. Jordanian Economic Indicators (2011–

2019)

Source: Compiled by the authors based on [13]

Additionally, several industries, such phosphate,

cement, and potash, have been seeing rise in their

production rates, [25].

The Jordanian economy was under pressure to

attract international investment due to its rapid

expansion and limited internal resources, [11], [13],

[14], ]25], [28[. The 1980s were a time of rapid

economic expansion, spurred on by increased

foreign aid and subsidies, remittances from

expatriates, and a surge in tourism, ]25], [29], [30],

[31], [32].

International Monetary Fund and World Bank

economic reform programmes were established in

response to this expansion. Launching a

privatisation initiative and cutting state fuel

subsidies were attempts by the government to boost

the private sector's participation, ]33], [34], [35].

The most formative years for Jordan's economy,

which saw the implementation of IAS/IFRS, were

between 1992 and 2000. Banks in Jordan saw a

noticeable rise in their foreign reserve holdings as a

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result of this. From 2001 to 2010, Jordan

implemented new reforms and advancements to

maintain its economy accessible to global investors

and partners, in response to the impact of

globalisation and challenges from foreign markets,

]36[. The free market and the private sector were the

backbone of Jordan's economy at the time, ]35[. The

International Monetary Fund and the World Bank

oversaw major economic reforms and advancements

in Jordan, [38[.

In addition to establishing the Free Trade

Agreement [FTA] with the United States and other

Arab nations, Jordan's economy grew at a pace of

about 6.5 percent, ]39[. Along with the “Gulf

Cooperation Council” [GCC], and the “European

Union” the established mutually beneficial

connections. Education reform and privatisation

initiatives contributed to Jordan's economic

transition to a knowledge-based model, ]35[.

The Executive Privatisation Commission (EPC)

was formed in 200 to devise a privatisation

programme and implement the new Privatisation

Law. To boost the economy of Jordan, the

government implemented liberal economic policies.

By 2009, Jordan's economy had risen to prominence

as one of the region's most progressive and

dynamic, [40], [41], [42]. By combining

conservative policies with the contemporary

banking sector, the “Central Bank of Jordan” (CBJ)

was able to recover from the effects of the “Global

Financial Crisis” (GFC) and make its economy more

appealing to investors, [43], [44], [45], [46]. The

World Bank ranked Jordan as an upper middle-

income economy in 2011 but after that,

circumstances in the area became worse, and over

590,000 Syrian migrants came streaming in ]47],

[48[. Since 2017, the MENA nations have been

Jordan's primary trade partners. This is due to the

government's efforts to diversify and become energy

independent, as well as its promotion of the country

through deals with Gulf countries and Shell for

energy supply, ]49], [50], [51[. Economic changes,

which the IMF has required, were a priority for the

Jordanian administration. The Jordan Investment

Board (JIB) was established in April 2015 to

streamline licencing and permitting processes,

thanks to a new Investment Law that was approved

in 2014. This board serves as a complete platform

for both local and international investors. In

addition, the World Bank and the Organisation for

Economic Cooperation and Development (OECD)

together launched a project to enhance investor

protection measures and to fortify investment

legislation, [39], [52], [53], [54], [55].

Despite the fact that successive administrations

increased levels of indirect taxes, a new income tax

legislation was announced in December 2014,

marking a significant step towards enhancing

government revenue. The new Income Tax Law No.

38 of 2018 was published in the Official Gazette on

2 December 2018, making amendments to Income

Tax Law No. 34 of 2014, which were published on

1 January 2019, and went into force. Organisations

were subject to fines under the tax code if they

failed to keep accurate records of financial

transactions and submit audited financial accounts,

[55].

Several changes to banking laws have been

made to provide the (CBJ) more power to ensure

financial stability and to make managers more

accountable in order to improve corporate

governance. Additionally, the licencing of a credit

bureau, which would result in the provision of

information on the creditworthiness of borrowers,

and the consolidation of lender protection are both

significantly impacted by the first

bankruptcy/insolvency law, ]56[. With the goal of

revitalising the economy and putting an end to

poverty, unemployment, and the budget deficit, the

Jordanian government launched a ten-year plan in

2015 called Jordan 2025: A National Vision and

Strategy for the years 2014–2022 (Table 3). With

the goal of revitalising the economy and putting an

end to poverty, unemployment, and the budget

deficit, the Jordanian government launched a ten-

year plan in 2015 called Jordan 2025: A National

Vision and Strategy for the years 2014–2025, refer

to Table 3. Improving commerce with neighbouring

nations, particularly those in GCC area, was central

to this plan's export-oriented economic strategy,

]35].

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Table 3. Key Performance Indicators- Macroeconomic Stability (2014-2025)

Source: Compiled by the authors based on [3]

3 The Growth of Jordan's Auditing

and Accounting

3.1 Development of Capital Market in

Jordan

In 1930, Arab Bank became the first publicly

traded firm in Jordan. In 1931, the Jordan Tobacco

& Cigarettes firm was founded. In 1938, the

Jordanian Electric Power Company was created.

And in 1951, Jordan Cement Factories was

established. Capital market development in Jordan

began in the 1960s, [55]. Financial statement

preparation standards were initially included in the

Company Act of 1964. The Company Act of 1989,

subsequently, confirmed and enlarged upon the

disclosure obligations that businesses were required

to furnish under the Company Act of 1964.

Companies were obligated to create and submit a

balance sheet and profit and loss statement in

compliance with GAAP under both legislations,

]18], [55]. In 1989, the “Jordanian Association of

Certified Public Accountants” (JACPA) was

established as an official accounting body. There

were no Jordanian-specific regional accounting

rules in existence back then. When it came to

encouraging Jordanian businesses to use IAS in the

1990s, JACPA was a key player. Companies may

use either GAAP or IASs as they saw fit since it

lacked the authority to mandate that listed

corporations adhere strictly to IASs, ]52]. In 1976,

the government and the World Bank's

“International Finance Corporation” (IFC)

collaborated on an economic strategy to set up a

securities market. In response to the need to

establish additional publicly traded firms in the

capital market, the “Amman Financial Market”

(AFM) was established in January 1978 and

formally began operations in 1978 with the

promulgation of Temporary Law No. 31, [3].

Listed Jordanian companies were not required to

disclose any particular information in their annual

reports under the AFM legislation of 1976 or its

1990 revision, [12].

More thorough financial reporting, including

audited financial accounts, became necessary as

market activity intensified, ]32[. Many obligations

pertaining to corporate transparency in Jordan were

imposed with the Company Act No.22, 1997.

Penalties for non-compliance, including delisting

and fines, were reinforced, and listed businesses in

Jordan are required to produce their financial

information in conformance with IFRS, ]17[.

Amazing changes and improvements occurred in

the Jordanian capital market because of this. In

order to help the capital market function, three

important Jordanian institutions came into being:

the “Securities Depository Centre” (SDC), the”

Amman Stock Exchange” (ASE), and the “Jordan

Securities Commission” (JSC). The first set of

guidelines for the corporate governance structure of

Jordanian firms came from the Company Act No.

23 of 1997, which aimed to safeguard the interests

and rights of shareholders, ]16[. Compliance with

IFRS corporate disclosure standards and other

matters pertaining to internal controls were also

addressed by the audit committees that were

mandated for the listed corporations. These

committees were to be comprised of three non-

executive directors, ]36[. Foreign investment trade

has grown substantially since then, propelling the

ASE to the position of leading regional securities

market, ]56[. As a result, the market's size and trade

volume have grown substantially in comparison to

MENA nations, ]38].

The financial information that listed enterprises

are required to disclose and provide by the JSC

Law No. 1 1998, in accordance with the

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requirements of the Commission for Enhancing

Transparency. Adopting international accounting

standards was necessary since, up to that point, no

local body had supervised local accounting and

auditing processes. The details of what businesses

in Jordan are required to include in their annual

reports were laid forth in Law No. 22 of 1997.

Companies on the stock exchange are required by

the JSC to disclose their financial data in

accordance with the “International Auditing and

Accounting Standards” (IAAS). The regulation

does not, however, mandate that listed companies

adhere to "internationally recognised accounting

and auditing principles", ]17], [18[. On top of that,

the law did not stipulate any particular disclosure

standards or structure. In addition, the law

mandated that public shareholding corporations be

audited by external auditors using authorised

international auditing standards, ]18[.

The Securities Law of 2002 was more effective

than the Companies Law of 1997, and it was

accompanied by new "Directives of Disclosures

and Auditing and Accounting Standards" that were

published based on it. A number of legal entities,

including JSC, SDC, and ASE, oversee the capital

market, and the law strengthened their authority by

increasing disclosure requirements, [31]. These

organisations were given the power to punish

businesses that didn't follow the rules. The

legislation also authorised ASE trading and the

ownership of up to 100% of a company's shares by

foreign investors, ]18[. Therefore, at the end of

2019, 51.7% of the entire market value of firms

listed at the ASE was owned by foreigners. Arab

investors accounted for 37.3%, while 14.4% were

non-Arab. Also, from 66 in 1978 to around 235 in

2019—a huge increase—the number of listed

enterprises, ]56[.

3.2 Accounting and Financial Reporting

System Development

The commercial law of Jordan governs the

foundation for financial reporting for all kinds of

firms. Financial statements, internal controls, and

the suitability of the business for trade and asset

protection are all responsibilities of the external

auditor that public shareholding firms are required

to employ under firms Law No. 22 in 1997. Also,

within three months following the conclusion of the

fiscal year, all publicly traded firms must compile

their audited financial statements. These statements

must include the company's income statement,

balance sheet, assets, and liabilities. Another

requirement is that companies must have their

semi-annual financial statements ready for auditing

by their respective accounting firms no later than

two months after the half fiscal year ends, ]45[. In

compliance with Securities Law No. 76, 2002,

audits of listed firms in the first ASE market are to

be conducted in line with International Standards

on Auditing, and quarterly financial statements

must be prepared in line with IFRSs/ISAs, ]55[.

3.3 Accounting and Auditing as a

Profession's Evolution

According to Jordan's company rules, which reflect

the country's political and economic climate, public

ownership businesses were compelled to adhere to

worldwide accounting and auditing standards in

1989. The “International Federation of

Accountants” (IFAC) membership agreements have

been in existence since 1988, and this adaption

followed suit, [14]. In order to boost investor trust

in Jordanian enterprises, this requirement is crucial

for improving the quality of their annual reports,

[55]. The ISA is the exclusive authority on

accounting in Jordan, and JACPA is no exception.

Both external auditors and those utilising financial

data look to ISAs as a roadmap, ]2],[3],[49[. It is

the duty of the external auditor to safeguard the

requirements and interests of the company's users

and shareholders, as stated in Article 21 of

Jordanian Law No. 22, 1997, ]44], [47[. After that,

a slew of laws was passed mandating that auditors

in Jordan adhere to global standards for accounting

and auditing. These laws emphasised the need of

auditors verifying the items in financial statements

and expressing a final opinion in accordance with

these standards. The laws of Jordan, such as the law

governing accounting careers No. 73 of 2003 and

the Jordanian company's law No. 22 of 1997, must

be followed by auditors, [50[.

Due to the rudimentary economy of the 1920s,

Jordan did not have any audit businesses

functioning. Auditors hailing from the West Bank

were tasked with performing accounting and

auditing duties. George, Kader and Co. was the first

Jordanian audit company in 1944; Saba and Co.

was the second. From Jerusalem to Amman,

Jordan, Saba and company relocated in 1948. Up

until the early 1950s, these two businesses

controlled the audit market in Jordan, ]16[. The

tremendous progress in the accounting and auditing

profession in Jordan during the 1950s satisfied the

demands for economic expansion and followed the

formation of a number of big firms, ]3], [20[. In the

years that followed, both the quantity and quality of

businesses seeking accounting and auditing

services skyrocketed. Because of this, there were

20 audit companies in Jordan by 1975, ]21[.

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The Auditing Profession Practice Law No. 10

was the initial law in Jordan to provide regulations

for the auditing profession in 1961. According to

this law, regardless of their academic degrees,

foreign auditors with two years of experience in

Jordan can practise auditing and have a licence to

do so, [9], [46]. After that, Auditing Profession

Practice Law No. 12 in 1964 superseded Auditing

Profession Practice Law No. 10 in 1961, which

mandated the auditing of all accounts for publicly

traded companies, ]19[. In 1985, in response to the

needs of contemporary businesses, the Auditing

Profession Practice Law No. 32 was issued. An

advanced degree in accounting and successful

completion of the exam administered by the High

Council of the Accounting Profession were

thereafter mandated by legislation as the bare

minimum for external auditors, [39[. Article 18 of

this law made a significant addition by creating the

JACPA, the primary agency in charge of

overseeing audit companies, ]35[. In 1987, JACPA

took over the task of overseeing the quality of

financial reporting and assessing professional

standards, ]28[. Professional Practice Licences are

now mandatory for auditors in Jordan per Law No.

73 of 2003 Accounting Career Law. A Jordanian

citizen or permanent resident without a criminal

record is required to apply for this licence.

Applicants must also have completed the

accounting training courses (minimum 40 hours per

year), a bachelor’s degree or diploma in

accounting, and a pass rate of approximately 15%

on the “Jordanian Certified Public Accountant”

JCPA exam administered by the Licencing

Committee. A wide range of accounting subjects

are covered in the JCPA test, including auditing,

financial accounting, company law, sales and

income taxes, and cost and managerial accounting,

]52]. The topics covered on this test are identical to

those on the US CPA exam.

Foreign investment has been a boon to Jordan

in the last several decades, thanks to globalisation.

Users of financial information, such as creditors,

authorities in Jordan, and international investors,

rely on reports issued by external auditors in

compliance with the ISA. Foreign investment in the

region is encouraged and economic stability is

promoted because auditors' reports are seen as

providing more reliable and crucial disclosures

concerning financial facts, ]51]. Increasing

investment from outside is a top priority for the

Jordanian administration. Thus, users of the

financial statements must embrace ISA as it

becomes an important requirement, [3[.

3.4 Exposure to IFRS and its History of

Implementation in Jordan

The “International Accounting Standards Board”

IASB was formed from the reorganised

“International Accounting Standards Committee”

IASC in 2001. The IASs were originally released in

1971. Based in London, the UK, the IASB is an

independent organisation that serves the public

interest. Their primary goal is to provide a unified

set of accounting standards that are universally

recognised and respected for their high quality,

clarity, enforceability, and understandability, ]28[.

By 2001, the International Accounting Standards

Board had embraced IASs and was creating and

publishing new IFRSs, ]36[. Internationally

accepted financial reporting standards, issued by

the International Accounting Standards Board

IASB and its predecessor, the International

Accounting Standards Committee IASC, are

essential for improved accounting information that

more accurately reflects a company's real economic

status and performance, [39[.

The reporting standards of IAS/IFRS were

implemented by tens of thousands of economies

worldwide by 2005, including the European Union

(EU), Hong Kong, Australia, and Canada, all of

which adopted IAS/IFRS at around the same time,

[36[ (Table 5, Appendix). The globe mostly

embraced IFRS in a short amount of time, despite

the fact that the cost-benefit analyses of doing so

were unclear. Because of differences in legislation,

culture, and institutions, the relative merits of

IFRSs vary from one nation to the next. Several

studies have noted that IFRS implementation levels

differ among nations, [27], [28], [29]. Institutional,

cultural, legal, political, and economic variables, as

well as enforcement methods, vary from country to

country, which accounts for the observed diversity,

]19[. Over the last several years, a vast majority of

public enterprises in over 140 countries have

integrated IFRS into their accounting framework,

[15], and approximately 90 countries have followed

the International Accounting Standards Board's

recommendation and implemented the complete

version of IFRS, [16]. Several international

organisations have indicated their support for this

modification, including the World Bank, the

International Monetary Fund, the Basel Committee,

the International Federation of Accountants, and

the International Organisation of Securities

Commissions, [27[.

As early as 1988, when Jordan joined the

IASC, substantial reforms to accounting laws

commenced. In 1989, the JACPA was formed as a

local accounting body after this. After that, in

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1990, the IASC recommended that the JACPA

implement the IASs for all Jordanian businesses.

Accounting records and audited financial

information were to be prepared and presented by

all Jordanian enterprises governed by the

enterprises Law in 1997 in accordance with

"internationally recognised accounting and

auditing principles”, ]17 [ . Once again, the

structure of Jordan's governance policy was

created in 1997 by the Companies Law. All listed

businesses are expected to follow the financial

reporting criteria of IFRS, and auditing needs to

be done within the principles of ISAs. This was

proclaimed by the JSC shortly after the Securities

Act No. 23 was published in 1998, ]9[. For

emerging markets like Jordan's to attain highly

transparent and comparably priced financial

information—which would foster international

trade between Arab nations and their foreign

business partners—the adoption of IAS/IFRS is

essential, [46].

The primary goal of these mandates is to

encourage more detailed information to be

included in companies' annual reports. Therefore,

it is crucial to enhance the quality of financial

reporting in order to aid consumers in making

decisions. Accounting information that is readily

available to consumers will inspire trust, making

the issue of data quality more important than ever

before, [16[. Policymakers in Jordan, such as

JACPA, rely only on the IFRSs/ISAs, despite the

fact that the country's economic climate differs

significantly from that of industrialised nations,

[10[. Public listed shareholding enterprises

governed by the JSC, financial firms regulated by

the CBJ, and insurance firms regulated by the

“Jordanian Insurance Commission” JIC are the

three groups whose adoption of IFRS Standards is

consequently mandated by certain rules. The

fundamental goal of these regulations is to

enhance the quality of financial reporting by

increasing the quantity of financial information

disclosures in company annual reports.

Consequently, external auditors must review the

annual reports of Jordanian listed companies in

order to comply with regulatory requirements,

]16[.

4 Theory Underpinnings: Progress in

Accounting and Institutional

Theory

Institutional theory is the main subject of this part.

Because of this, we may build a more thorough

theoretical framework to comprehend accounting

decision, i.e., the adoption of IFRS. Regardless of

their practicality or applicability, businesses often

adopt management methods, processes, and

structures that are seen as acceptable by other

businesses operating in the same sector. Imitation,

duplication, coercion, and normative pressures all

contribute to the transmission of long-established

and legitimated structures or activities through

customs and traditions, ]49[.

[43] and [51], were the first to publish research

on institutional theory in the field of accounting.

Institutions, according to their "new" institutional

theory, respond to environmental constraints by

adopting socially acceptable structures and

processes as optimal organisational strategies

(Figure 1) The literature on this topic has seen

accounting as a symbol of legitimacy, ]44], [46].

Meyer and Rowan stated that the trend towards

generally accepted procedures, for instance GAAP,

provide firstly, a bulwark against any perception of

irrationality; and secondly, an enhanced continued

moral and/or financial support system from

external resource providers. In practice, actual

organizational structures and procedures do not

always comply with their external expectations or

how they are perceived image-wise, ]47[. Some

studies have classified this deliberate or accidental

disconnection between the outside appearance and

the underlying structures and procedures as a type

of "de-coupling", [49]. Researchers in the field of

accounting have looked into the ways in which

companies purposefully separate the technical

aspects of accounting from the real institutional

structures and procedures that make accounting

tick.

Institutions from outside the organisation can

seep into its inner workings and explain any

congruence between organisational arrangements

and societal-level results that result from these

institutions. The term for this is "isomorphism”.

According to [48], the two main parts of it are: two

types of isomorphism: competitive and

institutional. Organisations are driven to adopt and

execute structures and procedures that are least

expensive while still maximising efficiency by

competitive pressures. The following are the three

additional sub-categories of institutional

isomorphism, [49]: first, coercive isomorphism -

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when firms are compelled to adopt particular

internal structures and procedures as a result of

pressure from outside sources like government

laws, regulations, and supplier relationships;

second, emetic isomorphism, when organisations

mimic the internal workings of other institutions;

and third, normative isomorphism, wherein

organisations mimic the workings of particular

dominating professions, professional bodies, and

consultants.

It is clear that the institutionalised attitudes,

norms, and regulations ingrained in what

governments, professional bodies, and public

opinion all need are a primary source for creating

accounting systems and accounting standards.

Organisations typically need to be selective in how

they react to the broader institutional environment

or context due to the numerous and frequently

conflicting demands that these entities face. There

has been a dearth of investigation into the impact of

contextual and environmental factors, particularly

in the context of auditing and financial information

preparation for corporations, despite the

widespread use of institutional theory in accounting

research, [14], [17], [47], [48], [50]. The primary

goal of this article is to help readers comprehend

how various contextual and environmental

elements impact the choice to comply with

IAS/IFRS.

Institutional theory states that in order for

organisations to gain legitimacy and stay in

business, they must adhere to the rules, norms, and

social values of their institutional context, ]49[.

In order to gain credibility, people or

organisations work to satisfy the expectations of the

people or organisations that play a pivotal role in

their operations. The three pillars upon which this

legitimacy rests are cultural-cognitive, normative,

and regulatory, as stated, [50]. Within this body of

work, [44] investigated the potential for national-

level adoption of IFRS in the United States via the

lens of institutional isomorphism. It was suggested

that multi-dimensional isomorphic forces will drive

convergence with IFRS. Mimetic and moral

isomorphism, as well as external and internal

coercive pressures, are examples of such forces.

When one group exerts pressure on another, such as

a government agency, regulator, or other business,

this is known as coercive pressure, [48], ]49].

Mimetic isomorphism happens when businesses

align their operations with other well-established

systems and similar institutions in reaction to

uncertainty and particular US financial crises, ]3[.

The advice of major accounting companies and

professional organisations on best practices are

examples of normative isomorphism, ]44[.

Fig. 1: Gray’s conceptual framework, [13]

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5 Discussion: Institutional Pressures

and Accounting Development and

IFRS Adoption

This section examines the key drivers of changes to

accounting procedures that led to the adoption of

IFRS in developing nations, with a focus on Jordan,

using the institutional isomorphism pressures as a

framework. The majority of the evidence for this

argument came from studies conducted recently

and observations made about Jordan's economy.

The questions posed at the outset of the article were

intended to be addressed in this section by

exploring potential solutions. This is how all three

forms of isomorphism may shed light on the

evolution of Jordan's accounting and auditing

industry.

5.1 Coercive Isomorphism Pressure

The coercive pressure reflects the contention that

outside pressures from international institutions i.e.,

the WB and IMF force organisations to conform to

international standards and rules, [3], [14], [17].

Actually, remittances, foreign assistance, and

investments are crucial to Jordan's economy

because of the country's water shortage and dearth

of natural resources. Forests, coal, water, energy,

and commercial/industrial oil are all in short supply

in Jordan, ]40[. Furthermore, the increase in

population and a subsequently high unemployment

rate resulted from the fact that Jordan will not

survive without receiving external financial

support, [47[ . More emphatically, the population in

Jordan has risen rapidly due to the emigration of

people from neighbouring countries as a

consequence of their traumatic political and

economic circumstances, such as Palestine, Iraq

and more recently Syria (Table 4), ]50[. The high

influx of refugees has doubled the rate of

unemployment and therefore put Jordan’s economy

under high pressure with much more government

spending since those refugees had to be settled and

fed, ]25[.

Most of Jordan's resources came from

contributions and external help from Arab or

international powers, as well as remittances from

Jordanians working abroad. This caused Jordan to

become heavily reliant on foreign aid, ]18]. Beyond

the restructuring programmes overseen by the IMF

and WB, inclusive economic alterations also

contributed to notable advancements in Jordan's

economy, [38]. According to the major tenets of

institutional theory, institutional isomorphic forces

were the driving force behind Jordan's dramatic

shift to IFRS. In general, Jordan's involvement in

the global economy creates coercive pressure. The

World Bank and the International Monetary Fund

really used coercion to hasten the implementation

of IFRS. This is because acquiring the required

capital and guidance for economic development is a

top priority.

5.1.1 Mimetic Isomorphism Pressure

Mimetic pressure reflects the desirability of

corporations to obtain legitimacy through imitating

those other companies that were successful and

legitimate, ]3[. Such corporations may be

neighbouring nations that provide outstanding

comparable financial data, [37] or trading partners.

These demands stem from the country's propensity

to entice international corporations, Foreign direct

investment FDI, and trade partners for domestic

private companies. The primary goal of the

Jordanian government is to attract investments

from outside, which is driving this trend, [31[.

Consequently, more stakeholders must have access

to high-quality financial information that satisfies

their needs. Countries with less robust governance

and control structures also need to ensure that their

accounting laws are in line with those of their trade

partners.

Table 4. Population Development 2000-2017 ]In 000[

Source: Compiled by the authors based [48]

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5.1.2 Normative Isomorphism Pressure

Within certain corporate settings, there is a

tendency for employees to operate in accordance

with the prevailing norms of the group's shared

ideas and values, ]50]. The most popular example

of the outcomes of normative pressure is the

tendency to improve the level of education, skills,

training and knowledge, ]45[. This has been

supported by [41[ who assert that normative

pressure caused by the world’s accounting

profession has encouraged Egypt to move toward

IFRS adoption. Most Jordanian academics and

accountants have degrees from institutions in the

United States or the United Kingdom, therefore it

stands to reason that their country's accounting

curriculum is heavily influenced by American and

British practices and theories. The expansion of

accounting and auditing in recent years is very

congruent with educational trends, and there is a

strong correlation between accounting education in

industrialised nations and these trends, [17]. The

field of accounting and auditing has seen

significant transformations in recent years, and

Jordan's educational system has evolved swiftly to

keep up. University accounting programmes in

Jordan often mimic their American and British

counterparts. Professionals in the accounting field

are able to hone their auditing and accounting

abilities while the economy is doing well, [2].

Listed companies in the capital market are

increasingly implementing IAS/IFRS and ISA due

to normative pressure from the accounting and

auditing profession, including JACPA, which is

represented in the IASC and IFAC. Compliance

with IAS is mandatory for Jordanian listed

corporations, and penalties for non-compliance are

outlined in the Securities Act No. 23 of 1997. This

is expected to reawaken pressure from the

accounting profession and encourage Jordan's

accounting and auditing practices to seek support

through the creation of new accounting training

sessions, such as university courses, [3].

5.2 Institutional Pressures to Adopt IFRS

and Its Consequences

5.2.1 Institutional Pressures to Adopt IFRS

IFRSs promise to offer more transparent,

comparable and accountable financial information

for market participants, ]30[. The produced

financial information under IFRS becomes an

essential requirement in the global markets, which

currently consider such information as a basis for

making uniform or consistent economic decisions.

In fact, consumers would be better able to spot

advantageous investment possibilities and financial

hazards globally if clear and comparable financial

data were readily available, ]1[. When it comes to

preparing and reporting financial accounts, IFRS

offers a consistent, unified standard, ]2],[13],[14[.

Minimising the expense of worldwide reporting is

the end result of using common trustworthy

accounting terminology, ]40[. Along with

globalisation, this is why most nations' adoption of

IFRSs is crucial for economic success. Accounting

practices, rules, and goals are all products of a

nation's unique setting. Consequently, it is critical

to understand the environmental features and

elements impacting Jordan, as well as their

implications for the accounting and auditing

industry in Jordan and the country's economy, [11],

[25], [32].

Through an examination of the implementation

of IFRS as outlined by the IASB, one may delve

into the topic of environmental pressures and their

effects by way of institutional theory. This line of

inquiry centred on scholars like, [14], who sought

to understand the driving forces underlying the

recent shifts in accounting standards in Indonesia

]15,[ in Egypt ]14[,in Jordan ]17[ and in Nepal

]18[. Research like this identifies cultural,

governmental, legal, educational, economic,

national, and international influences as the main

environmental elements that push for the adoption

of IFRS.

In developing nations, political considerations

have a significant impact on the accounting

system's structure. Additionally, the adoption

choice might be impacted by factors like economic

development, the level of external economic

openness, the literacy rate, and the educated

population, [2], [3], [4], ]17[, find that the three

types of isomorphism strongly influenced IFRS-

adoption decision in the Egypt (i.e. IMF aid, the

desirability of the accountant to adopt IFRS and

education level), [33], [34]. It has been suggested

by ]6[, that IFRS adoption in developing countries

is justified also by the reliance of such countries on

their trade partners that appear to be IFRS adopters

in their geographical region, ]39[. Building on this,

[55] argued that IFRS adoption is a must for

countries with strong economic ties to other

countries that have already done so in order to level

the playing field for international investors and

make it easier for multinational corporations to

conduct business. The extent to which Bahraini

enterprises have adopted IAS was investigated by

[48]. The study concludes that these businesses'

access to bank loans is enhanced after adopting

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IASs because the efficacy of publicly available

financial data is enhanced.

Coercion from governments and international

bodies has led to the adoption of IFRS in Iraq,

according to institutional theorists, [41]. This

adoption is driven by isomorphic pressures, which

may be defined as normative, mimetic, and

coercive. [1], conducted a more current study in

which researchers looked at the evolution of

accounting methods and the degree to which

several MENA countries—including Egypt, Jordan,

Libya, and the UAE—adopted IFRS. Through the

prism of institutional theory, the researchers

examine how cultural, governmental, legal, and

economic aspects influenced the evolution of

accounting procedures in various nations and how

adaptable the accounting profession is. This study's

results indicate that the latter two considerations are

critical for IFRS compliance. In terms of

professional accounting processes and means of

obtaining capital, it also concludes that Egypt,

Jordan, and the UAE may achieve a comparable

level with their key trading partners, which include

the US, the UK, Germany, and Italy, [1], [3], [5],

[6].

Furthermore, the objective of [17], was to

identify the primary determinants impacting the

adoption of IFRS in Jordan and to investigate the

associated elements that both encourage and

constrain its implementation. According to the

findings, several variables impact the evolution of

accounting standards and practices. In a nutshell,

environmental advances are a major component.

Other important things include starting the

privatisation programme, creating the capital

market, joining several free trade agreements,

passing new business legislation, and applying

IAS/IFRS and ISA. In addition, according to [38],

the following factors place pressure on accounting

practices, including the adoption of IFRS, in

Jordan: the country's colonial history, pressure

from large economic organisations and

international donor institutions; government

enforcement mechanisms, such as privatisation and

corporate governance programmes; the economy's

openness to international funding and trade; and the

development of education normatively.

[4], uses institutional theory to determine that

trade partners and multinational businesses are

mimetic pressures, the Big Four accounting firms

are normative pressures, and the World Bank and

capital markets are the primary sources of coercive

pressures. Accounting regulations in Jordan are

shaped by the country's and the region's colonial

past, according to [14]. In addition, they mention a

number of potential environmental variables that

might affect the implementation of IFRS, including

political and economic considerations,

privatisation, and others. The impact of external

influences is higher than that of internal ones,

according to [17]. Some examples of such elements

include the following: the educational system,

cultural norms and practices, international factors

or globalisation, the legal system, taxes, and the

economic and political climate.

5.2.2 IFRS Implementation Influences

Financial reporting is the most important issue

concerning professional accountants, regulators and

other financial report users. Such reports are critical

in communicating the results of financial events

and transactions. In turn, this assists the users who

may need this information to make business

decisions, based on their assessment of the

financial performance and state of a business, ]13[.

There are two primary goals of IFRS adoption, as

stated by [36]. As a whole, IFRS is an effort to

improve financial reporting and, more specifically,

to make global comparisons of companies' financial

statements easier. In line with the goals of IFRS to

enhance the quality of companies' financial

statements, the International Accounting Standards

Board places a focus on the openness of financial

reporting.

Regarding this matter, [38], detailed how the

stock markets of a few MENA countries saw

diverse outcomes after adopting IFRS. The impact

of IFRS adoption on MENA stock markets has

been studied by [11]. The study found that the

stock market growth of MENA nations was

positively impacted by the implementation of IFRS.

[39], notes that IFRS is crucial for improving the

accuracy of financial reporting, but that the

distinctive institutional, economic, and regulatory

landscapes of MENA nations have led to

conflicting findings. [47], used data from 95

companies across multiple MENA nations to

analyse how IFRS adoption affected FDI.

According to their findings, IFRS adoption boosts

FDI. In addition, using a pricing model and data

from two emerging nations—Turkey and

Malaysia—Turel, [53], has studied how IFRS

adoption affected book value and reported earnings,

respectively. In the time after IFRS was

implemented in Turkey, the results show that book

values and earnings became more relevant to value.

In Malaysia, though, you'll see the polar opposite.

Based on the findings of [54], examined how the

adoption of IFRS affected discretionary accruals in

China. There has been no decrease in managerial

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discretion via profits management as a result of

IFRS adoption, according to both research. Using a

sample of Kenyan enterprises, [55], looked at how

IFRS affected the proportion of foreign ownership

and share turnover. They provide evidence that

there is a positive and statistically significant

relationship between the proportion of foreign

ownership and share turnover as well as

compliance with IFRS.

Regarding the Middle East, [54], gives data

from Egypt on how the revised EASs, mostly

promoted by IFRS since 2006, have affected

adoption. The results show that the goal of such

adoption was not to lessen profits management.

Adopting IAS/IFRS standards is crucial for

economies like Jordan's to achieve high levels of

financial information openness and comparability,

which would facilitate international trade between

the Arab and global worlds, ]2]. When such

countries adopt IFRSs, it will improve the quality

of their financial reports that are released, which is

the primary reason for doing so, [12]. Worldwide

investors will reap the benefits of this and IFRS's

contribution to a more consistent and comparable

financial reporting system, ]56[.

Several researchers, including [12], who

emphasised the importance of IFRS in creating a

welcoming environment for investment by both

local and international firms, have also addressed

other beneficial outcomes, [10]. Furthermore, there

are more benefits than negatives to IFRS

implementation in Jordan, as confirmed by [27].

According to the study's author, regulatory entities

should make keeping tabs on businesses a top

priority. Developing nations' market development

and economic growth can be enhanced by the

adoption of IFRS, according to [12], [14] and [15].

The United Arab Emirates UAE, Jordan,

Kazakhstan, and Egypt are among the many code-

law nations that have adopted IFRS,]1], [17[.

Thereby, IFRSs intended to improve the quality

of financial information by increasing openness via

fostering worldwide comparability, [3]. In the long

run, our work reduces the cost of capital by making

it easier for market participants—including

investors and other stakeholders—to make

educated business decisions and removing

investment risks, [13]. Convergence with IFRS

increased financial reporting comparability in both

emerging and developed nations, according to

various research, [7], [15], [17], [30]. Adopting

IFRS, [1], would be a collective statement from

Arab nations to their trading partners about their

dedication to transparent and comparable

accounting reporting standards. Therefore, IFRS

has been adopted by these nations in part because

of the accounting system that their trade partners

employ, [15].

5.3 Lessons from the Jordanian Experience

for other Middle Eastern Economies

Based on the institutional framework, the preceding

discussion underlines the main incentives that have

influenced, and continue to affect, IFRS adoption in

Jordan. Jordan seems an ideal setting to make a

valid analysis regarding the institutional pressures

to lead to substantial improvements in accounting

practices for the last 20 years. This implies that

other ME nations may benefit much from numerous

experiences when it comes to this adaption. In

section 3, it is said that JACPA was instrumental in

Jordan's transition to a free market economy via its

participation in the IASC and IFAC. The stock

market, privatisation, membership of various free

trade agreements, introduction of various business

regulations, and adoption of IAS/IFRS were all

environmental remarkable advances that

contributed to economic progress, [21]. Referring

to other nations in the region which lack specialised

accounting bodies and weak governance and

oversight schemes, they may face coercive

isomorphism pressures caused by their tendency to

attract foreign investment or activate the

investments in the private sector. Countries rich

with high reserves of oil and gas, such as Iraq,

Saudi Arabia, UAE, Kuwait and Bahrain may

emphasise engaging foreign investors to get

assistance in extracting such precious reserves,

making economic growth possible. Consequently,

these nations need to strengthen their accounting

systems through IFRS adoption, [3], [5], [7], [8],

[13], [20], [38].

Furthermore, other economies in the region

seek financial aid and advice to reinforce their

economies. Such nations are more likely to face

significant pressure to implement IFRS caused by

powerful international aid institutions. Economies,

like Jordan which have a poor or small economy

are more likely to be dependent on international aid

for their basic requirements. Consequently, these

nations are subject to the coercive pressures of a

range of powerful global organizations which assist

them in getting foreign aid, ]29[. International

financial institutions like the World Bank and the

International Monetary Fund provide them with the

funds they need to meet their capital market needs,

ensure improvements to the economy as a whole,

and advance the adoption of IFRS. This will lead to

more uniform and transparent financial reporting

by businesses worldwide, which will improve the

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efficiency of the capital market, [32[. This estimate,

which pertains to the transition to IFRS caused by

different coercive forces in different contexts, is

supported by an analysis of previous studies. [33],

state that foreign assistance is a major motivator for

adopting IFRS. Further supporting the enormous

influence of the IMF and WB in changing the

accounting and auditing profession in Jordan, [34],

in the UAE shows how the coercive demands from

the WB were a major factor in the introduction of

IFRS, ]14], [17], [18[.

The mimetic isomorphism pressure on the

practices of Arab and foreign trade partners in

Jordan is likely to extend to other ME economies.

The importance of harmonising their accounting

practices with trade partners, lies in seeking

benefits from trade partnerships with neighbouring

nations. Put another way, according to [21], there is

a direct correlation between the number of

countries adopting a certain set of standards and the

amount of pressure other countries feel to do the

same. For instance, if IFRS adoption becomes the

norm in the Arab League, Arab countries who

reject the standards would have poor trade links

with their neighbours and will miss out on chances

for economic progress, [35]. Due to the limited

natural resources in Jordan and some small

economies, such as Iraq, Libya and Algeria, they

are more likely to copy the same format as their

trade partners to meet their capital market needs.

Small economies like Jordan's are less likely to be

impacted by changes in accounting methods

compared to larger economies like Saudi Arabia,

Egypt, and the United Arab Emirates. A number of

significant environmental reforms and changes in

ME nations also contributed to the requirement to

implement IFRS. [36], state that the region's

enforcement methods and investor protection

schemas are crucial in ensuring complete adherence

to IFRS. When it comes to IFRS implementation,

countries with weak investor protections, including

Iran, Yemen, and the Syrian Arab Republic, tend to

have greater issues, [37], [38[.

Regarding the normative pressure, it has been

evident following the previous discussion that

accounting profession pressures influence the

likelihood of IFRS implementation in the ME

countries and developing countries more generally.

This due to the solid ties of such economies with

their trade partners and being open to international

trade organisations and direct foreign investment.

Normative pressure caused a noticeable movement

of experts across national borders for the purpose

of transferring skills. This situation is likely to lead

to exposing alternative methods and systems which,

therefore, increase the requirement for more

rigorous accounting systems and frameworks, like

IFRS, [39], [40]. As a consequence, universities’

courses are more subject to developing and

reflecting skills and knowledge their academics

undertake in the form of examinations in other

nations, Western nations in particular. As

mentioned above, many economies have already

required IFRS implementation for all entities,

including Jordan, Lebanon, Egypt, Kuwait, and

Bahrain. The enforcement mechanisms and

investor protection measures in place impact the

accounting profession's perception of the impact of

normative pressure on the application of IFRS,

[43], [44[, ]50], [56]. Again, in the case of Jordan,

the extensive role of JACPA in developing

preparers’ and auditors’ skills and knowledge

following IFRS adoption played a vital role in

reinforcing compliance with such practices. This is

in addition to the corporate governance reforms and

investor protection programmes, [2].

6 Conclusion

This study provides a synopsis of Jordan's auditing

and accounting history, highlighting the country's

efforts to adopt IFRS and discussing the possible

effects of institutional forces on the evolution of the

profession. Our research lends credence to the idea

that institutional isomorphism—including

normative, mimetic, and coercive pressures—is

driving the evolution of auditing and accounting in

Jordan. One striking example of coercive

isomorphic pressure is the adoption of IFRS in

Jordan, which has led to extraordinary changes in

the accounting profession. This push comes from

the World Bank and the International Monetary

Fund, among other global financial organisations

and markets. Normative and mimetic isomorphic

pressures drive further advances as a result of the

necessity to acquire cash and guidance to aid

economic progress. Attracting multinational

corporations, FDI, and international trade partners

to local private companies in the country is an

example of a mimetic isomorphic pressure.

Additional assistance is encouraged through the

provision of accounting training sessions, such as

courses offered by professional institutions, and

awareness creation initiatives, thanks to normative

isomorphic demand from accounting groups like

JACPA.

There are several ways in which the present

paper adds to the body of knowledge. First, this

solid work grounding on the economic, political,

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and regulatory landscape of Jordan. Second, the

study uses factual data to determine the key

elements that enable significant improvements in

the region's accounting processes. Third, in order to

address a vacuum in our knowledge about the

evolution of accounting systems, particularly in

Jordan, this study outlines the key repercussions

that followed this deployment locally. Fourth, by

employing the institutional theoretical lens, it

bridges the gap between IFRS adoption and the

incorporation of institutional aspects. The financial

markets, practitioners, regulators, and standard-

setters may all benefit from this study as it details

the primary motivations and pressures. Fifth, the

examination's last section might shed light on the

forces driving the shift to IFRS, which is a crucial

consideration. The findings of this study can, in all

likelihood, be used by those responsible for

establishing accounting standards to better account

for the specifics of the ME area, both in the

creation of new standards and the revision of

current ones.

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APPENDIX

Table 5. IFRS adoption by jurisdictions based on IASB’s report 2018

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DOI: 10.37394/23207.2024.21.81

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Country

IFRS

application

status

Country

IFRS

application

status

Country

IFRS

application

status

1. Afghanistan

Required

2. Albania

Required

3. Angola

Required

4. Anguilla

Required

5. Antigua and

Barbuda

Required

6. Argentina

Required

7. Armenia

Required

8. Australia

Required

9. Austria

Required

10. Azerbaijan

Required

11. Bahamas

Required

12. Bahrain*

Required

13. Bangladesh

Required

14. Barbados

Permitted

15. Belarus

Required

16. Belgium

Required

17. Belize

Required

18. Benin

Required

19. Bermuda

Permitted

20. Bhutan

Permitted

21. Bolivia

None

22. Bosnia and

Herzegovina

Required

23. Botswana

Required

24. Brazil

Required

25. Brunei

Darussalam

Required

26. Bulgaria

Required

27. Burkina

Faso

Required

28. Cambodia

Required

29. Cameroon

Required

30. Canada

Required

31. Cayman Islands

Permitted

32. Central

African Republic

Required

33. Chad

Required

34. Chile

Required

35. China

None

36. Colombia

Required

37. Comoros

Required

38. Costa Rica

Required

39. Croatia

Required

40. Cyprus

Required

41. Czech

Republic

Required

42. Côte

d’Ivoire

Required

43. Democratic

Republic of Congo

Required

44. Denmark

Required

45. Dominica

Required

46. Dominican

Republic

Required

47. Ecuador

Required

48. Egypt*

Required

49. El Salvador

Required

50. Equatorial

Guinea

Required

51. Estonia

Required

52. Eswatini

Required

53. European

Union

Required

54. Fiji

Required

55. Finland

Required

56. France

Required

57. Gabon

Required

58. Gambia

Required

59. Georgia

Required

60. Germany

Required

61. Ghana

Required

62. Greece

Required

63. Grenada

Required

64. Guatemala

Permitted

65. Guinea

Required

66. Guinea-

Bissau

Required

67. Guyana

Required

68. Honduras

Required

69. Hong Kong

SAR

Required

70. Hungary

Required

71. Iceland

Required

72. India

None

73. Indonesia

None

74. Iran

Required

75. Iraq*

Required

76. Ireland

Required

77. Israel

Required

78. Italy

Required

79. Jamaica

Required

80. Japan

Permitted

81. Jordan*

Required

Key:

-Required: require IFRS Standards for all or most companies.

-Permitted: permit all or most companies to use IFRS Standards.

-None: no official IFRS adoption, local GAAP applicable.

-Both: IFRS adoption is Required or permitted.

*Arab Middle Eastern

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DOI: 10.37394/23207.2024.21.81

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Husni K. Al-Shattarat, Nidal Mahmoud Al-Ramahi

E-ISSN: 2224-2899

986

Volume 21, 2024

Country

IFRS

application

status

Country

IFRS

application

status

Country

IFRS

application

status

82. Kazakhstan

Required

83. Kenya

Required

84. Kosovo

Required

85. Kuwait*

Required

86. Latvia

Required

87. Lesotho

Required

88. Liberia

Required

89.

Liechtenstein

Required

90. Lithuania

Required

91. Luxembourg

Required

92. Macao SAR

None

93.

Macedonia

Required

94. Madagascar

Permitted

95. Malawi

Required

96. Malaysia

Required

97. Maldives

Required

98. Mali

Required

99. Malta

Required

100. Mauritius

Required

101. Mexico

Required

102. Moldova

Required

103. Mongolia

Required

104.

Montenegro

Required

105.

Montserrat

Required

106. Myanmar

None

107. Namibia

Required

108. Nepal

Required

109. Netherlands

Required

110. New

Zealand

Required

111.

Nicaragua

Permitted

112. Niger

Required

113. Nigeria

Required

114. Norway

Required

115. Oman*

Required

116. Pakistan

Required

117.

Palestine*

Required

118. Panama

Permitted

119. Papua New

Guinea

Required

120. Paraguay

Permitted

121. Peru

Required

122. Philippines

Required

123. Poland

Required

124. Portugal

Required

125. Qatar*

Required

126. Republic

of the Congo

Required

127. Romania

Required

128. Russia

Required

129. Rwanda

Required

130. Saudi Arabia*

Required

131. Senegal

Required

132. Serbia

Required

133. Sierra Leone

Required

134. Singapore

Required: SFRS

135. Slovakia

Required

136. Slovenia

Required

137. South

Africa

Required

138. South

Korea

Required

139. Spain

Required

140. Sri Lanka

Required

141. St Kitts

and Nevis

Required

142. St Lucia

Required

143. St Vincent

and the

Grenadines

Required

144. Suriname

Permitted

145. Sweden

Required

146.

Switzerland

Permitted

147. Syria*

Required

148. Chinese Taipei

Both

149. Tanzania

Required

150. Thailand

None

151. Timor-Leste

None

152. Togo

Required

153. Trinidad

and Tobago

Required

154. Turkey

Required

155. Uganda

Required

156. Ukraine

Required

157. United Arab

Emirates*

Required

158. United

Kingdom

Required

159. United

States

None

160. Uruguay

Required

161. Uzbekistan

Required

162.

Venezuela

Required

163. Vietnam

None

164. Yemen*

Required

165. Zambia

Required

166. Zimbabwe

Required

Key: Count:

-Required: require IFRS Standards for all or most companies. 144

-Permitted: permit all or most companies to use IFRS Standards. 12

-None: no official IFRS adoption, local GAAP applicable. 11

-Both: IFRS adoption is Required or permitted. 1

*Arab Middle Eastern countries

Contribution of Individual Authors to the

Creation of a Scientific Article [Ghostwriting

Policy]

The authors equally contributed in the present

research, at all stages from the formulation of the

problem to the final findings and solution.

Sources of Funding for Research Presented in a

Scientific Article or Scientific Article Itself

No funding was received for conducting this study.

Conflict of Interest

The authors have no conflict of interest to declare.

Creative Commons Attribution License 4.0

(Attribution 4.0 International, CC BY 4.0)

This article is published under the terms of the

Creative Commons Attribution License 4.0

https://creativecommons.org/licenses/by/4.0/deed.e

n_US

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DOI: 10.37394/23207.2024.21.81

Esraa Esam Alharasis, Hossam Haddad,

Husni K. Al-Shattarat, Nidal Mahmoud Al-Ramahi

E-ISSN: 2224-2899

987

Volume 21, 2024