Disclosure practices in Egypt: what are factors beyond the low level?

Tariq Ismail and Nermeen F. Shehata

International Journal of Economics and Accounting, 2012, vol. 3, issue 3/4, 264-275

Abstract: In Egypt, as one of the emerging markets, mandatory disclosure of financial information on annual reports has attracted the attention of many researchers. Results of prior studies analysing disclosure level concluded that mandatory financial disclosure in annual reports is low. The purpose of this paper is to shed the light and analyse those factors affecting disclosure level in the Egyptian environment including political and economic conditions, legal system and regulatory framework, nature of the capital market, prevailing culture, and accounting practices. Our analysis suggests that secretive culture is the major reason behind the low disclosure practices found in Egypt overcoming the efforts exerted by regulators. Additionally, the paper provides the reasons that lead to the low disclosure level as follows: 1) presence of uniform, secretive, and conservative accounting practices; 2) absence of a unified law governing Egyptian companies' activities and transactions; 3) lack of strict enforcements imposed by the Egyptian Capital Market Authority on non-complying companies to comply with the mandatory requirements of the Egyptian accounting standards.

Keywords: financial disclosure; accounting information; accounting practices; annual reports; culture; regulatory framework; International Financial Reporting Standards; IFRS; capital markets; Egypt; accounting standards; enforcement; legislation; law. (search for similar items in EconPapers)
Date: 2012
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