This paper seeks to understand the processes of setting accounting standards in a developing country in transition, namely Egypt. It explores the social, political as well as economic forces that underlie the development of financial accounting regulations implemented throughout two longitudinal periods; starting with the beginning of socialism and extending to liberalism.
The paper is based on in‐depth interviews and an analysis of documents. It relies on the institutional theory notions of coercive, mimic and normative isomorphic mechanisms to link the changes in the financial accounting regulations to the changes in the wider social and institutional context wherein organizations operate, while, at the same time, exploring the legitimation processes underlying the development of domestic accounting standards similar to the International Accounting Standards (IASs).
The paper finds that the major changes in the state's political philosophy, the regulators' motivations and the processes of the accountancy profession provided a momentum to the formulation of Egyptian Accounting Standards (EAS). Though similar to IASs, they were acted upon to overcome the pre‐existing socialist accounting practices, while, at same time, increasing organizational members' adherence to the processes of privatization.
Although the empirical findings suggest that “globalization forces” through technical as well as financial assistance programmes created pressures during the standard‐setting processes, a full investigation and explanation of such pressures are an area of future research.
The paper contributes to the understanding of how IASs are diffused in a country in transition and the role of these standards during that country's transformation processes towards the market economy.
Kamal Hassan, M. (2008), "The development of accounting regulations in Egypt: Legitimating the International Accounting Standards", Managerial Auditing Journal, Vol. 23 No. 5, pp. 467-484. https://doi.org/10.1108/02686900810875299Download as .RIS
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