An Investigation of Compliance With International Accounting Standards by Listed Companies in the Gulf Co-Operation Council Member States

Abstract

This study investigates the extent of compliance with international accounting standards (IASs) by companies in the Gulf Co-Operation Council (GCC) member states (Bahrain, Oman, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates). Based on a sample of 137 companies (436 company-years) we found that compliance increased over time, from 68% in 1996 to 82% in 2002. There was significant variation in compliance among the six countries and between companies based on size, leverage, internationality and industry. Non-compliance was greater than that observed in developed countries and reflected limited monitoring and enforcement by the bodies responsible for overseeing financial reporting and limited comprehensiveness of audits by external auditors.