The Advantages and the Challenges of Adopting IFRS into UAE Stock Market

Ihab Alsaqqa, Nedal Sawan

Abstract


This paper aims to assess the benefits gained and the challenges experienced by companies listed on the UAE
stock market following the introduction of IFRS. Since the announcement by the European Union to adopt IFRS
by listed companies, many countries have followed suit, hoping to gain competitive edge in attracting the
Foreign Direct Investment to boost their economic growth. This study focuses on examining the advantages and
challenges faced by companies listed on the UAE stock market listed companies as a result of adopting IFRS.
The framework used in this analysis will be based on the identification and assessment of key drivers
influencing companies listed on the UAE stock market. To what extent are these factors internal or external to
the financial sector, but which have a direct bearing on the overall economic environment? The views and
perceptions of the Chief Financial Officers’ (CFOs) for Dubai and Abu Dhabi listed companies, financial
analysts of the financial statements in the two listed companies and auditors will be analysed.

Methodology: Questionnaires were used as the main method of data collection. Questionnaire were distributed
in both Dubai and Abu Dhabi markets, The data obtained through the questionnaires have been imported into
software for analysis, namely, the Statistical Package for the Social Sciences (SPSS).

Findings: The results clearly show that the benefits of adopting IFRSs in UAE inevitably far outweigh the
difficulties and costs. The findings also reveal that adoption of IFRSs in UAE stock markets has improved the
overall standard of the quality of financial reporting, which help in attracting investors to invest in the UAE
stock markets. However, many respondents were still apprehensive that effective and professional financial
reporting decisions will be affected by the level of education of accounting users, the methods provided by some
IFRSs, and the inadequate enforcement mechanisms.


Full Text: PDF DOI: 10.5539/ijbm.v8n19p1

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This work is licensed under a Creative Commons Attribution 3.0 License.

International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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