Abstract

Different accounting standards may lead to differences in financial reporting and its quality even with same set of accounting data. Previous studies acquired through cross-country analyses show that the adoption of International Financial Reporting Standards (IFRS) improves considerably the financial reporting quality and comparability and thereby favorable economic consequences. In this research, we try to assess whether the quality of the financial reporting of listed non-financial companies in Dubai Financial Market (DFM) has been improved after the adoption of the IFRS or not. More precisely, we look in this research to the five fundamental characteristics of the accounting information, which are: (1) relevance, (2) faithful representation, (3) understandability, (4) comparability and (5) timeliness. For this purpose, we used a qualitative approach developed by the Nijmegen Centre of Economics (Nice). Our sample consist of all nonfinancial companies listed on DFM observed over the period from 2015 to 2018. By all counts, our research finding provide evidence that it is no wonder that the adoption of IFRS has increased the quality of financial reporting from year to year. The outcomes proved that the qualitative factors of relevance, understandability, and comparability level increased considerably after IFRS adoption. The findings of this paper could lead to high level of awareness about the importance of financial reporting quality. Higher level of IFRS compliance play a significant role in attracting global investors’ interest to the local markets, especially in a developing country like the UAE.

Keywords: IFRS; Financial reporting quality; DFM; Nice; UAE