An investigation of the views and perceptions of external users of corporate annual reports in emerging economies: the case of Egypt

Abstract

The purpose of this paper is to examine how users of company annual reports in the emerging market of Egypt view those reports, and to compare the results with the findings of Mirshekary and Saudagaran (2005) in Iran. Each study is based on a survey of different but comparable user groups in the respective country.The data reported in this study were collected through a questionnaire survey, covering six user groups. The 72 responses received were analysed using the Kruskal-Wallis one-way ANOVA test.The results reveal that most use annual reports for obtaining information for financial decisions. The paper also reveals that, in comparison with developed markets, Egyptian users depend more on annual report information than on advice from stockbrokers and friends or on tips and rumours. The respondents, in general, ranked the auditors' report, notes to the financial statements and the balance sheet as the three most important parts of the annual report. However, the respondents differed in their rating of the importance of different sections of the annual report. Despite the lack of access to these reports by the general public and lack of trust in information, the majority of users view annual reports as the most important source of company information.The results further indicate that the ranking reported by users in Egypt is notably different from that reported in Iran. This supports the research stream that aims to study accounting at single-country levels. It also sends the message that developing countries are different and face different problems from developed ones. Therefore, there might be a need to reconsider the one-size-fits-all standards that are recommended by the International Accounting Standards Board (IASB). There is an important level of adjustment which a country that imports accounting standards must make to ensure that they do not conflict with the local socioeconomic culture.

Internal Control Quality, Egyptian Standards on Auditing and External Audit Delays: Evidence from the Egyptian Stock Exchange

“…To summarise, the empirical evidence provided in this study sheds light on the importance of ICQ in audit practices in an emerging market characterised by weak legal enforcement, a lack of transparency and a high level of secrecy (Dahawy & Samaha, ).…”

“…Independent and quality audit plays a pivotal role in enhancing transparency in financial reporting practices and establishing confidence in any capital market. However, it remains essential for audit firms to provide the investment community with a timely audit report to allow investors to allocate their resources in a more rational way (Dahawy & Samaha, ). Any delay in the disclosure of the auditor's opinion on the true and fair view of financial information elaborated by the firm's management exacerbates information asymmetry between managers and shareholders and adversely affects financial system efficiency (Mohamad‐Nor, Shafie & Wan‐Hussin, ).…”

The value relevance of accounting‐based performance measures in emerging economies

“…Thus, most transactions in Egyptian capital market are made based on accounting data, especially, earnings. Therefore, the importance of earnings‐based measures for market pricing is very high and functional fixation on earnings‐based measures is very common in stock pricing (Dahawy and Samaha, 2010; Hassan et al , 2009; Ragab and Omran, 2006) in Egypt. The characteristics of Egyptian capital market mentioned above indicate to the high importance of earnings‐based performance measures as superior summary measures of firm performance.…”

Firm Performance and Market Behavior during First Wave of COVID-19 in Egypt: Panel Data Analysis

“…Egypt is found in the Middle East which is considered a politically disturbed and unsound area. Regardless of these circumstances, Egypt has showed continuous and swift economic progress in parallel to other developing economies (Elsayed and Hoque, 2010;and Dahawy and Samaha, 2010). According to (Samaha and Dahawy, 2010), Egypt is greatly progressing in economic reform, refining investment environment and drawing local, regional and foreign direct investments.…”

“…Regardless of these circumstances, Egypt has showed continuous and swift economic progress in parallel to other developing economies (Elsayed and Hoque, 2010;and Dahawy and Samaha, 2010). According to (Samaha and Dahawy, 2010), Egypt is greatly progressing in economic reform, refining investment environment and drawing local, regional and foreign direct investments. Furthermore, Egypt is going through a privatization plan to several of its public organizations.…”