Accounting Disclosure in Companies Listed on the Egyptian Stock Exchange

Knowledge can be transferred and imported across international borders. However, recent research shows that local cultures may affect the acceptance and application of such imported knowledge content. Egypt's adoption of IAS in 1996 provides an excellent opportunity to examine how conflicts between imported accounting standards and a nation's cultural values affect implementation of the new standards. This manuscript focuses on one cultural variable; secrecy, that was found to be high in the Egyptian market and its effect on the actual disclosures as applied by companies that are listed in the Egyptian stock market. The research is conducted through detailed analysis of the disclosures of the financial statements for the year 2004 of the population of actively traded companies in the Egyptian Stock Market as reported by the Egyptian Capital Market Authority. The findings of this research indicate that the disclosure level for the studied companies averaged 61% of the required level that is mandated by the Egyptian Capital Market Authority requirements that are based on IAS. Also, most of the non-compliance could be explained by cultural reasons. The companies were selective in their choice of what to comply with and what not to.