Using international standards as a complement to overcome the unachieved nature of local GAAPs

Abstract

Purpose In recent years, Tunisian listed companies have been preparing their financial statements under a hybrid set of accounting standards; a mixture of national and international standards. The purpose of this paper is to empirically verify to what extent this particular form of de facto compliance with IAS/IFRS (which are not authorized in Tunisia) is used among listed companies. The paper further analyzes accounting professionals’ perception of the current state of Tunisian standards and their attitudes in the absence of relevant national Generally Accepted Accounting Principles (GAAPs). Design/methodology/approach Two methodological approaches were used to answer the paper’s research questions: a document analysis approach and a survey questionnaire. Findings The document analysis revealed that a growing number of listed companies complement local GAAPs by standards they select among IAS/IFRS. The perception study indicated that Tunisian Accounting Standards are, indeed, less suitable for listed companies’ needs. Accordingly, when there is no local standard to measure a specific transaction or event, accounting professionals seem to have no problem in using some IAS/IFRS as a complement to overcome the unachieved nature of local GAAPs. However, the overall findings are likely to suggest that international standards used must not conflict with the Tunisian conceptual framework’s provisions. This means that the use of IAS/IFRS in conjunction with local GAAPs is generally perceived as being beneficial to the quality of financial statements. Research limitations/implications This study may be of interest to many developing countries that have not continued the harmonization of their accounting standards with IAS/IFRS. Future research should focus on the reasons which have led to this unachieved harmonization and the consequences of the normative gap which might emerge. Practical implications Previous research has often shown how difficult it is to apply international accounting standards in developing countries, especially when they do not correspond to the companies’ needs. Difficulties could occur when local standard-setters do not accurately know which new international standards are suitable to the market needs. The study gives some insights suggesting that corporate accounting practices should be analyzed to understand the real needs for new standards. Originality/value The paper highlights the beginning of a de facto convergence with international accounting standards without any support of national de jure convergence. Consideration of this phenomenon may contribute to the understanding of the malaise that characterizes the current accounting standard-setting in developing countries.

Budaya Sipallambi’ Dalam Praktik Bagi Hasil

“…Fungsi lain sipallambi adalah menjadi tali perekat kekeluargaan tanpa sedarah, solidaritas persaudaraan, dan memaknai diri sebagai masyarakat sosial yang saling membutuhkan. Nilai yang ditimbulkan adalah abstrak tapi dirasakan sangat dekat dengan hati setiap orang yang melakukannya karena ini adalah sesuatu yang telah secara turun temurun mereka yakini bahwa sipallambi akan memberi harapan kehidupan labih baik di masa yang akan datang bagi anak cucu mereka sehingga mereka memiliki kepastian hidup yang lebih tenang (Fadhilah, 2013;Klibi, 2016;Manuaba et al, 2012;Masum et al, 2020;Ovando et al, 2016).…”

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

“…On the contrary, listed companies state in their annual report that they use international standards that have no equivalent in Tunisia. Third, Klibi (2016) shows that a majority of Tunisian accounting practitioners believe that the de facto use of IFRS is likely to improve the quality of financial information.…”

“…The analysis of the annual reports of Tunisian listed companies shows that they use certain International Accounting Standards (IAS) as the local standards do not seem to fully satisfy the normative needs of those companies (Klibi, 2016). Arguments for this practice are well documented.…”

“…These developments mainly relate to the elaboration of a new generation of standards, namely, the IFRS, which recommends the use of fair value as a reference treatment. According to Klibi (2016), the new form of international standards has caused slowness in producing new local accounting standards. In fact, Tunisian standard setters could no longer follow the production rate of IFRS because the local conceptual framework still includes historical cost as accounting reference treatment.…”

“…However, while several environmental factors evolve according to the requirements of globalization, the progress of the standardsetting process is increasingly slow and sometimes is in a state of hibernation. 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.…”