Accounting Regulations and IFRS Adoption in Francophone North African Countries: The Experience of Algeria, Morocco, and Tunisia

Hichem Khlif (), Kamran Ahmed and Manzurul Alam ()
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Hichem Khlif: Faculty of Economics and Management of Sfax, University of Sfax, Tunisia
Kamran Ahmed: La Trobe Business School, La Trobe University, Australia
Manzurul Alam: Murdoch University, Australia

The International Journal of Accounting (TIJA), 2020, vol. 55, issue 01, 1-36

Abstract: This paper traces the historical developments of accounting regulations in Algeria, Morocco, and Tunisia and uses institutional theory to identify factors affecting International Financial Reporting Standards (IFRS) adoption as the national accounting standards in these countries. We find that the extent of convergence with IFRS in Algeria is higher compared to Morocco and Tunisia. This has been mostly due to greater foreign investor flows from Western countries in Algeria during the last decade, the dominant position of international Big-4 audit firms, and strong trade relationship of Algeria with the European Union (EU) compared with Morocco and Tunisia. We discuss the main challenges faced by these three countries in converging toward IFRS. These are underdeveloped equity markets, switching from French fiscal-oriented accounting systems to Anglo-Saxon accounting systems, and are characterized by lack of knowledge of principles-based IFRS by local professional accountants. Moreover, the convergence with IFRS in these countries is confronted by the prevailing small and medium-sized firms in the economic environment, difficulty in fair-value measurement in these settings, and the cost of convergence for companies. Our study has policy implications for those countries sharing similarities with these settings and have undertaken steps to implement IFRS.

Keywords: Accounting regulations; IFRS; institutional theory; obstacles to IFRS adoption; Algeria; Morocco; Tunisia (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1142/S1094406020500043

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