The Level of Compliance with International Accounting Standard IAS 18 by Listed Firms in Bahrain

Abstract

Abstract:This Study examines the association between five firm-specific characteristics and the level of compliance with International Accounting Standards (IAS 18) by listed Firms in Bahrain Bourse. A self-constructed compliance checklist was developed and the compliance index was derived to represent the level of compliance among publically traded firms in Bahrain Bourse for the year 2013 to IAS 18 disclosure requirements. The results detected an aggregate mean compliance of 63% to IAS 18 disclosure requirements. A significant positive relationship was found between the level of compliance and a company's size, and auditor type. A significant negative relationship was found between the IAS 18 disclosure level and a company's debt level (leverage). However, a significant relationship between the level of IAS 18 disclosure level and a company's profits or age could not be established in this research. The results of this research can benefit investors and companies as well, as the results will determine what level of compliance to IAS 18 are listed companies in Bahrain Bourse are committed to, and how transparent are the revenues they are reporting in their financials.

Testing the Level of Compliance of International Accounting Standard IAS 38: Evidence from Bahrain

“…The level of the compliance the firm listed in Bahrain Bourse is unknown at the current juncture and needed to study. Thus, due to the lack of studies, this study extends to further emphasis on studies by several scholars (Sarea & Al Nesuf, 2013, Sarea & Al Dalal, 2015, Alrawahi & Sarea 2016, Juhmani, 2012, Budaraj & Sarea 2015Demir & Bahadir, 2014) & examines the level of compliance of listed companies with IAS 38 in order to extend on the previous studies available in the rest of the world & address the issue of compliance.…”

“…However, a disclosure compliance checklist constructed by a previous researcher, which leads to disclosure index, was used to measure the level of disclosure compliance. Many researchers have used the disclosure index in their studies as referenced (Almujamed, Alanezi & Alfaraih, 2017;Yiadom and Atsunyo, 2014;Budaraj & Sarea 2015;Alrawahi & Sarea 2015;and Demir & Bahadir, 2014). However, the disclosure index has been modified to measure the specific IAS 38 compliance level.…”