Accounting development in a changing environment: the case of Tunisia

Abstract

Purpose The purpose of this paper is to discuss accounting development in Tunisia, which is a developing North African country little known in the international accounting literature. Design/methodology/approach Methodologically, this paper is based on an exploratory approach. It uses the descriptive tradition of research by collecting and analyzing numerical and narrative data to identify and describe environmental factors that favor or hamper accounting development in Tunisia. Findings This paper indicates that Tunisian companies have been applying the Enterprise Accounting System (EAS) since 1996. This system, while keeping with the logic of a chart of accounts, represents a first attempt to harmonize with international accounting standards. Accounting harmonization in Tunisia is meant to support the strategy, launched in the early 1990s, to integrate the country into the globalization process. Accordingly, the EAS has helped to achieve macroeconomic benefits (public interests). However, it does not lead to the desired level of financial transparency (private interests), especially that of large companies. Currently, Tunisian Accounting Standards neither reflect the rapid evolution of business activity nor changes in international accounting standards. This unachieved harmonization has led some listed companies to comply with some International Financial Reporting Standards which are not included in the EAS. Research limitations/implications The unachieved harmonization in Tunisia is mainly related to the political system, taxation factors, the legal system, the weak state of corporate governance and governmental control over standardization. Practical implications This paper provides insights into the problems of developing countries that harmonize with international standards to achieve public interests. These countries may encounter many difficulties in bringing their accounting standards up to date. These difficulties seem to be associated with environmental specificities. Accordingly, international standardization bodies and developing country regulators should take into account environmental factors which are determinant for the harmonization decision to succeed. Originality/value This paper contributes to the existing literature on accounting development in developing countries. It implies that recent accounting development, as it is designed in Tunisia, is better suited to the needs of small businesses. Large companies would be compelled to complement local generally accepted accounting principles by standards they choose, voluntarily, among international standards.

The impact of audit committee financial expertise on de facto use of IFRS: does external auditor’s size matter?

“…Arguments for this practice are well documented. Ben Slama and Klibi (2017) argue that Tunisian GAAPs are incomplete and not updated compared to IFRS. This unachieved harmonization has pushed many listed companies to partly comply with some IFRS.…”

“…This phenomenon was qualified by Klibi (2016) as an unachieved harmonization with the IAS. In this context, Ben Slama and Klibi (2017), on the basis of a content analysis of the annual reports of Tunisian listed companies, indicate that these entities cannot reliably recognize accounting aspects of some of their activities. Among these activities, we cite deferred taxes, employee benefits, financial instruments, non-current assets held for sale and discontinued operations.…”

IFRS adoption and financial reporting quality in the MENA region

“…Zeghal et al (2012) found that firms in countries where the distance between pre-existing national GAAP and IFRS exhibit an improvement in accounting quality between pre- and post-adoption periods. With regard to the MENA region, apart from Saudi Arabia, Tunisia and Egypt (Hassan, 2008; Pacter, 2016; Slama and Klibi, 2017; Nurunnabi, 2018), most MENA countries did not have local accounting standards of their own (Kossentini and Othman, 2014; PwC, 2015; IASplus, 2016; IFRS Foundation, 2016; Pacter, 2016). Interestingly, those three countries are also non-IFRS adopters up to the time period of this study [8] (2006–2015).…”

The rough road towards accounting harmonization of a developing country with a French accounting culture

“…In 1968, the National standard-setter set up the first domestic accounting system [plan comptable général (PCG)]. The PCG, very similar in spirit to the French General Accounting Plan, was “based on tax laws and promoted the publication of macro-economic indicators to satisfy the informational needs of the central government” (Ben Slama and Klibi, 2017, p. 761). In the mid-1980s, Tunisia suffered from an economic crisis.…”