Factors affecting the development of accounting practices in Jordan: an institutional perspective

Abstract

Purpose Based on the institutional theory, the purpose of this paper is to examine institutional factors that affect the development of accounting practices in Jordan. Design/methodology/approach The current study surveys the perceptions of 306 participants and 20 interviewees. Findings First, the early formation of accounting practices in Jordan has been affected by the legacy of Ottoman Empire’s and the British Colony’s accounting systems. Second, the results indicate that government of Jordan (regulatory frameworks), pressures from international donors and large economic organizations (politico-economic factors), education and training/development (cultural inputs), and the efforts to attract foreign investments and getting access into the international fund and trade (economic factors) have been influential influences in the development of accounting practices and the adoption of International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) in Jordan. Finally, the findings reveal that “Secrecy” construct (a culture input) has been a problematic in the implementation of IAS/IFRS. Practical implications The current study provides policy implications for the Jordanian policy makers and for other developing countries that are working hard to improve the quality of financial reporting of their business entities. Finally, the authors suggest some great opportunities for future research. Originality/value First, this paper contributes to Jordan’s policy developments including fundamental strategies in terms of attracting foreign investments to expand the economy and the international and regional trade. Second, it fills a gap in the international accounting research by empirically assessing how institutional factors affect the development of accounting practices in emerging country such as Jordan.