USING INTERNATIONAL STANDARDS AS A COMPLEMENT TO OVERCOME THE UNACHIEVED NATURE OF LOCAL GAAPs: The case of a developing country

Klibi, M. F. (2016), "Using international standards as a complement to overcome the unachieved nature of local GAAPs: the case of a developing country", Journal of Applied Accounting Research, Vol. 17 No 3, pp. 356-376 (Emerald publishers).

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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. This paper aims 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. Our paper further analyzes accounting professionals’ perception of the current state of Tunisian standards and their attitudes in the absence of relevant national 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. Our 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.

Keywords: Developing countries, Tunisia, Accounting standard-setting, Unachieved harmonization, Normative gap, Listed companies, IAS/IFRS, Accounting professionals.

ACCOUNTING DEVELOPMENT IN A CHANGING ENVIRONMENT: The case of Tunisia

Ben Slama, F. and Klibi, M.F. (2017), "Accounting development in a changing environment: the case of Tunisia", International Journal of Law and Management, Vol. 59 No 6, pp. (Emerald publishers)

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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 in order 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 IFRS 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 in order 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 GAAPs by standards they choose, voluntarily, among international standards.
Keywords: accounting development in Tunisia, developing countries, unachieved harmonization, environmental factors, IAS/IFRS.