Yasean Tahat, Mohamed A. Omran and Naser M. AbuGhazaleh
Based on the institutional theory, the purpose of this paper is to examine institutional factors that affect the development of accounting practices in Jordan.
Abstract
Purpose
Based on the institutional theory, the purpose of this paper is to examine institutional factors that affect the development of accounting practices in Jordan.
Design/methodology/approach
The current study surveys the perceptions of 306 participants and 20 interviewees.
Findings
First, the early formation of accounting practices in Jordan has been affected by the legacy of Ottoman Empire’s and the British Colony’s accounting systems. Second, the results indicate that government of Jordan (regulatory frameworks), pressures from international donors and large economic organizations (politico-economic factors), education and training/development (cultural inputs), and the efforts to attract foreign investments and getting access into the international fund and trade (economic factors) have been influential influences in the development of accounting practices and the adoption of International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) in Jordan. Finally, the findings reveal that “Secrecy” construct (a culture input) has been a problematic in the implementation of IAS/IFRS.
Practical implications
The current study provides policy implications for the Jordanian policy makers and for other developing countries that are working hard to improve the quality of financial reporting of their business entities. Finally, the authors suggest some great opportunities for future research.
Originality/value
First, this paper contributes to Jordan’s policy developments including fundamental strategies in terms of attracting foreign investments to expand the economy and the international and regional trade. Second, it fills a gap in the international accounting research by empirically assessing how institutional factors affect the development of accounting practices in emerging country such as Jordan.
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Mohamed A. Omran and Ahmed M. El-Galfy
The purpose of this paper is to provide an extensive and critical overview of the theoretical perspectives used in the accounting disclosure literature including economic…
Abstract
Purpose
The purpose of this paper is to provide an extensive and critical overview of the theoretical perspectives used in the accounting disclosure literature including economic theories, political and social theories.
Design/methodology/approach
The paper reviews and discusses in details the positive accounting theory (PAT), agency theory, signalling theory, political economy theory (PET), stakeholder theory, legitimacy theory and contingency theory to identify the situations suit each of these perspectives.
Findings
The main finding shows that there is no universal theory applicable for all situations or societies. For example, PAT is probably used when a corporation believes that its primary responsibility is to use its resources and engage in activities designed to maximise its profits. On the other hand, the PET seems to better explain why some corporations appear to respond to government or public pressure for information about their social impact. The agency theory provides the required framework to evaluate accounting choices and disclosure decisions in market-based studies. While the legitimacy theory seems to be more suitable for multinational corporations working in developed/democratic countries, the stakeholder theory seems to be most suitable for multinational corporations working in developing/dictator countries; whereas a corporation can manage its stakeholders. The contingency theory supports our main finding that different theories are required for different situations, as it clearly indicates that management's preferences of reporting practices are related to the nature of environmental and organisational constraints rather than their relative income effects.
Originality/value
The paper contributes to the limited body of literature concerning the accounting disclosure theories and to identify the main theoretical perspective that can be used in the accounting disclosure research.
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The study examines determinants of price earnings (PE) multiples and their ability to forecast short term returns in the Egyptian stock market during the period from 2002 to 2007…
Abstract
The study examines determinants of price earnings (PE) multiples and their ability to forecast short term returns in the Egyptian stock market during the period from 2002 to 2007. Three factors were tested for their ability to determine the PE multiples. The three variables are growth, payout and return on equity (ROE) in the period from 2002 to 2005. Only Payout and ROE were found to be significant. The ability of past average PE multiples to explain and therefore forecast future short term returns were tested. Short term returns as measured by changes in stock prices from 2006 to 2007 were regressed against the past average PE multiples in the period from 2002 to 2005. The results indicate that the past high or low PE multiples give no insight on the direction and magnitude of future short returns. An important finding of the paper is that expectations about above average future growth can influence PE multiples more than the average past growth. This happens when the economy or some sectors of it are expected to witness far more growth than its past. It is therefore recommended for future studies that a quantitative or qualitative measure of future expectations should be included in the PE determinants formula in Egypt or countries expected to have very high or above average future growth in some of its sectors.
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Ahmed Diab, Samir Ibrahim Abdelazim and Abdelmoneim Bahyeldin Mohamed Metwally
This paper aims to examine the value relevance (VR) of accounting information (AI) presented by Egyptian listed non-financial companies. Further, the study investigates the…
Abstract
Purpose
This paper aims to examine the value relevance (VR) of accounting information (AI) presented by Egyptian listed non-financial companies. Further, the study investigates the influence of institutional ownership on the value relevance of AI in a developing market, namely, the Egyptian market.
Design/methodology/approach
The study uses data from 2014 to 2017 with a total of 248 observations and analyses the data using regression analysis. Data are collected from the nonfinancial companies listed on the Egyptian Stock Exchange.
Findings
The authors found that the AI reported by the Egyptian listed non-financial companies is value relevant. Regarding the influence of institutional ownership, it is found to significantly impact the VR of AI reported by the sample companies. This model investigated the effect of corporate size and financial leverage as controlling variables and found that they have an insignificant influence on the VR of AI.
Originality/value
The current study findings enrich the literature by enhancing the understanding regarding institutional owners’ impact on corporate value. Further, bringing evidence from an emerging market can have implications for accounting researchers interested in addressing other emerging markets with similar contextual and institutional environments.
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Mohamed Omran and Yasean A. Tahat
Drawing upon agency theory, this study aims to assess the value relevance (VR) of accounting information released by non-financial firms listed on the Kuwait stock exchange for…
Abstract
Purpose
Drawing upon agency theory, this study aims to assess the value relevance (VR) of accounting information released by non-financial firms listed on the Kuwait stock exchange for the period of 2015-2018. Also, the influence of institutional ownership level and other explanatory variables, namely, book value per share, earnings per share, growth in assets and changes in financial leverage on share prices is examined.
Design/methodology/approach
To test the hypotheses, the Ohlson (1995) model is extended. This study uses panel data analysis and applies appropriate statistical techniques to measure empirical relationships.
Findings
The results show that the VR of accounting information released by the Kuwaiti non-financial listed firms varies over the period of 2015-2018. Book value and earnings have significant and positive effects on share prices. In recent years, the VR of book value information has been growing, while that of earnings information has been declining. Institutional ownership level has a significant and positive influence on the VR of accounting information released by the Kuwaiti non-financial listed firms. The findings confirm a positive power, signalling growth in assets regarding the share prices. However, no significant relationship between changes in financial leverage and share prices is found.
Practical implications
The findings of the study provide evidence of the linkage between VR and institutional ownership level, which promotes the understanding of the influence of institutional investors on a firm’s market value. Empirical evidence from Kuwait will have international implications and can serve as a guide for accounting researchers studying other emerging markets. Capital market regulators can provide guidelines in the form of information characteristics and elements of financial statements that need improvement. Finally, the findings assist non-financial listed firms to enhance the quality of accounting information by identifying the strengths and weaknesses in their financial reports.
Originality/value
This study extends the previous literature by investigating a relatively new set of data in more depth than that has been examined by prior research, which focusses on the relationship between accounting information and the firm’s market value.
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Xinyu Zhao, Mohamed Omran and Shi-Min How
Drawing on a mission approach, this study investigates the application of integrated reporting (IR). It also explores its role in shaping organisations' internal processes in…
Abstract
Purpose
Drawing on a mission approach, this study investigates the application of integrated reporting (IR). It also explores its role in shaping organisations' internal processes in Chinese state-owned enterprises (SOEs) and the China General Nuclear Power Corporation (CGN).
Design/methodology/approach
We employed a case study method and collected data by conducting semi-structured interviews with CGN managers and analysing their reports and appropriate documents.
Findings
Our findings reveal that the CGN is motivated by its mission and vision to adopt IR rather than by other common motivations, such as legitimacy, strategy and stakeholder pressure. IR practice contributes to implementing its mission and vision through direct and indirect methods, covering the changes in design archetypes and subsystems that meet the nature of reorientation changes that belong to first-order transition.
Research limitations/implications
This study extends empirical evidence of IR at the firm level in China and provides in-depth insights into how IR is implemented in Chinese SOEs. Our findings may be helpful for policymakers to review and develop policies. For instance, the government might consider integrating IR frameworks into current reporting and mandate listed companies to adopt IR. However, our data are from one company, the only Mainland Chinese Company recognised by the IIRC database.
Originality/value
This study provides an innovative approach to analysing IR and offers managers insight into how IR practice benefits the mission’s implications.
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Mohamed Omran, Dinesh Ramdhony, Oren Mooneeapen and Vishaka Nursimloo
Drawing upon agency theory, this study analyses the influence of board characteristics on integrated reporting (IR) for the top 50 companies listed on the Australian Securities…
Abstract
Purpose
Drawing upon agency theory, this study analyses the influence of board characteristics on integrated reporting (IR) for the top 50 companies listed on the Australian Securities Exchange (ASX50). Focus is placed on IR at the aggregate level as well as its separate components, namely Future Opportunities and Risks (FOPRI), Governance and Strategy (GOVSTR), Performance (PERF), Overview and Business Model (OBM) and General Preparation and Presentation (GPP).
Design/methodology/approach
A checklist is devised based on the IIRC (International Integrated Reporting Council) framework to track companies' disclosures for the period from 1st July 2014 to 30th June 2017. Regression analysis is used to investigate the determinants (board size, board independence, activity of the board, gender diversity, firm size, profitability and growth opportunities) of IR and its separate components.
Findings
The findings indicate a significant and positive effect of board independence on the aggregate IR index, FOPRI and GPP. A negative and significant association is found between activity of the board and both the aggregate IR index and its separate components, including GOVSTR, PERF and GPP. Additionally, the aggregate IR index is significantly related to firm size, profitability and growth opportunities.
Research limitations/implications
The limited sample of 50 companies over three years is the main limitation of the study. The study suffers from an inherent limitation from the use of content analysis in assessing the level of IR. No checklist to measure the level of IR can be fully exhaustive. Furthermore, we focus on whether an item in the checklist is disclosed, using a dichotomous scale, thus ignoring the quality of information disclosed.
Practical implications
The study has several practical implications. From a managerial perspective, it shows that having more board meetings harms the level of IR. The results can guide regulators, such as the Australian Securities and Investment Commission (ASIC) and the Australian Securities Exchange (ASX), when drafting new regulations/guidelines/listing rules. If regulators aim for a higher level of integration in the reports, they know which “triggers to pull” to attain their target. Our results can guide regulators to choose the appropriate trigger among various alternatives. For instance, if a higher level of integrated reporting is desired, size instead of profitability should be chosen. Finally, ASX listed companies can use our checklist as a scorecard for their self-assessment.
Originality/value
This research is the first to investigate IR by devising a checklist based on IIRC (2013) along with an additional GPP component in the ASX context. Using separate models to examine each component of the aggregate IR index is also unique to this study. The study also brings to the fore the role of gender-diverse boards in promoting IR. It reiterates the debate about imposing a quota for better gender representation on boards.
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Omran Mohamed AlShamsi and Mian M. Ajmal
This purpose of this paper is to identify and prioritize the critical factors impacting knowledge sharing (KS) in technology-intensive manufacturing organizations in the United…
Abstract
Purpose
This purpose of this paper is to identify and prioritize the critical factors impacting knowledge sharing (KS) in technology-intensive manufacturing organizations in the United Arab Emirates (UAE) and to propose a decision-making framework for KS.
Design/methodology/approach
Analytical Hierarchical Process method is used to identify these critical factors impacting KS in technology-intensive manufacturing organizations in the UAE.
Findings
Results show that organizational leadership and culture are the most critical factors impacting KS in the technology-intensive manufacturing organizations.
Research limitations/implications
The data are collected from technology-intensive manufacturing organizations in the UAE; therefore, these cannot be generalized to other locations. Future research in different countries is required.
Practical implications
To implement successful KS practices in technology-intensive manufacturing organizations, it is essential that all impacting factors and sub-factors are well understood within the organizations.
Originality/value
This study is among the first studies in the region that presents a comprehensive framework for KS in manufacturing sector.
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Soufiene Assidi, Mohamed Omran, Tarek Rana and Hela Borgi
This study aims to examine the impact of Artificial Intelligence (AI) adoption on Tunisia’s accounting profession, using the diffusion of innovations theory (DIT) to explore…
Abstract
Purpose
This study aims to examine the impact of Artificial Intelligence (AI) adoption on Tunisia’s accounting profession, using the diffusion of innovations theory (DIT) to explore opportunities and challenges.
Design/methodology/approach
A survey of 400 academics and professional accountants in Tunisia was conducted, focusing on three key areas: the effect of AI on professional roles and tasks, the enhancement of digital work environments and the development of educational programs. Structural equation modelling (SEM) was used to test the relationships among these variables, providing robust statistical insights.
Findings
The results indicate that AI adoption leads to a 75.7% improvement in the functionality and responsibilities of accounting professionals, a 72.1% enhancement in digital workplace productivity and a 58.4% increase in educational program effectiveness. Despite these positive outcomes, the study identifies significant challenges, including a 63.2% concern related to change management and a 59.8% need for substantial training and technical resources investment. To address these challenges, the findings advocate for targeted professional development programs, collaborative policymaking to establish implementation guidelines and a curriculum overhaul to equip future accountants with AI competencies.
Research limitations/implications
The findings suggest Tunisian organisations should invest in AI to achieve substantial efficiency and risk management gains. Practitioners, instructors and students are expected to increase their technology expertise to develop more effective accounting procedures in light of AI issues. Collaboration among policymakers, regulators and practitioners is essential to establish clear implementation guidelines.
Originality/value
This study offers theoretical contributions by applying the DIT to AI adoption within an emerging economy, providing a unique perspective on how AI drives digital transformation in the accounting sector. In addition, it delivers practical implications by identifying strategies for overcoming barriers to AI adoption, such as fostering organisational readiness, ensuring access to training resources and enhancing professional collaboration to enable successful AI integration.