The Egyptian accounting profession Essay Example | Topics and Well Written Essays - 500 words

The Egyptian accounting profession - Essay Example Its reforms are a part of a larger economic reform, as Egypt underwent a planned economy system in the 1960’s, then liberalized in the 1970’s and underwent structural changes in 1991 (Rahman et al. 1). Still, the private sector is given more leeway in terms of compliance with IAS than the public (Rahman et al. 4). Moreover, compliance with disclosure rules is a major issue. High quality auditors and accountants are in excess demand. Quality of auditors and accountants is guaranteed by the Egyptian Society of Accountants and Auditors (Rahman et al. 5). However, there are a few qualified students due to economic inequalities in the country, and these mostly work for international companies, with only few remaining in the public sector (Rahman et al. 6). Thus, though the government tries to comply with IAS, the work force cannot catch up with the standards. As a result, many companies listed on capital markets fail to live up to standards set by the Egyptian government (Rahman et al. 8). The enforcement mechanisms are weak as well. The central bank is weak, as it cannot impose sanctions on non – compliers in the banking sector (Rahman et al. 9). The government does not ensure that the auditing reports are of high quality by being checked by a second auditor (Rahman et al. 9). Since top management controls the company instead of the shareholders, irregularities within a company are shoved under the rug (Rahman et al. 9). Though IAS is to be followed completely in Egypt under all of the regulations, the result is mistrust among investors and a weak legal system (Rahman et al. 12). Shahid expands on auditing and accounting standards by incorporating them into the wider corporate culture in Egypt and abroad. According to Shahid, lack of standards and accountability leads to financial problems in companies (5). As a result, Shahid believes codes of good corporate governance to be the key to success in Egypt, since they are â€Å"a comprehensive set of norms