The Impact of New Egyptian Accounting Standards on the Information Content of Financial Statements: An Empirical Study on Listed Companies in Egyptian Stock Exchange

Document Type : Original Article

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Accounting Department Faculty of Commerce Alexandria University Alexandria Egypt

Abstract

Proponents of the adoption of international accounting standards argue that adopting these standards will increase quality and transparency of financial statements. Therefore, it is expected that there will be a positive relationship between the application of the new Egyptian accounting standards and the information content of the financial statements. In contrast, opponents of the adoption of international accounting standards argue that environmental factors and organizational structures must determine the form and content of accounting standards. Therefore, the present study aimed to identify the effect of applying the new Egyptian accounting standards issued in 2015 on the information content of the financial statements. To achieve this objective, an empirical study was conducted on a sample included 328 annual observations for 82 listed companies during the period 20142017. Unexpectedly, the results showed an inverse and significant relationship between the new Egyptian accounting standards and the information content of the financial statements.

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