The Extent of Listed Manufacturing Companies’ Compliance with Mandatory Requirements: Evidence of IAS- Lite from Jordan

Khaled Hutaibat, Larissa von Alberti, Khaldoon Al-Htaybat

Abstract


This study investigates changes in an accounting system due to external, investor-related, and internal, governmentally driven, pressures. An empirical study is undertaken to measure the extent of compliance and give explanations for any variations. The empirical part focuses on the mandatory disclosure of Jordanian manufacturing companies before and after the extension of disclosure requirements in 1998. The study compares the level of mandatory financial disclosure in 1997 and 2008, and investigates the relationship between the level of mandatory disclosure and company characteristics (size, industry type, age, performance and ownership structure).
Levels of disclosure are computed by means of a disclosure index. Different indices have been determined for the years 1997 and 2008 to reflect the different mandatory disclosure requirements of the two years. Levels of disclosure have been calculated for a sample of 51 Jordanian manufacturing companies listed on the ASE in both years. Both in 1997 and 2008 companies were not fully complying with all requirements implied by the regulations. The less than full compliance is evidence that ‘IAS lite’ may be an issue in Jordan.

Keywords


International Accounting Standards (IAS), IAS-lite, Annual Reports; Mandatory Disclosure; Jordanian Regulation; Amman Stock Exchange

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