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Determinants of accounting choices in Egypt

Colin. R. Dey (School of Accounting and Finance, University of Dundee)
John R. Grinyer (School of Accounting and Finance, University of Dundee)
C.Donald Sinclair (School of Accounting and Finance, University of Dundee)
Hanaa El‐Habashy (Faculty of Commerce, Menoufia University, Egypt)

Journal of Applied Accounting Research

ISSN: 0967-5426

Article publication date: 31 December 2007

Issue publication date: 31 December 2007

741

Abstract

In recent years, Egypt has been developing rapidly from a socialist to a fully developed market‐based economy. One may expect that this economic transition towards a more capitalist orientation will influence the country’s cultural and socio‐economic environment, and consequently the behaviour of its corporate managers. The increasing separation of ownership and control of capital could be expected to increase agency problems associated with managerial decisions. In these circumstances, it should be interesting to identify whether ‘positive accounting’ hypotheses would apply in such an environment. Therefore, this paper examines the relevance to financial reporting in Egypt of some established positive accounting theory hypotheses in addition to a new hypothesis related to taxation. The evidence of the study is consistent with the validity of the conventional ‘bonus’ and ‘debt’ hypotheses and the new ‘taxation’ hypothesis. These conclusions are also consistent with recent empirical studies of cultural and socio‐economic change in Egypt.

Keywords

Citation

Dey, C.R., Grinyer, J.R., Sinclair, C.D. and El‐Habashy, H. (2007), "Determinants of accounting choices in Egypt", Journal of Applied Accounting Research, Vol. 8 No. 3, pp. 48-92. https://doi.org/10.1108/96754260880001054

Publisher

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Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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