Adoption Of IFRS In Oman And The Quality Of Financial Reporting
The objective of this research paper is to study the consequences of IFRS adoption in Oman. This will extract a picture of current financial reporting quality of firms in Oman and what influences will come after the adoption of IFRS. International Financial Reporting Standards (IFRS) are developed for the business matters and proper accountability. These are the general standards that are related to the business affairs. The implementation of IFRS within an organization makes the accounts understandable and comparable with other systems. IFRS have been developed because of increased trade and international shareholding that are of great consideration for the companies dealing and emerging in different countries. IFRS standards are successfully replacing a number of national accounting standards. IFRS allows accountants and managers to keep information that is reliable, understandable, comparable and specific to the internal or external users. If IFRS is adopted in Oman, the influence of its standards on improvement of financial statements will be seen. The research objectives are to find the link of IFRS adoption with improvement of disclosure level and transparency and improvements in the financial statements delivered to the investors for better decision making (Mirza, et al., 2010).
The research study is based on the adoption of IFRS in Oman. If the economy of Oman is successful in implementing and following IFRS standards within different companies, financial statements will get improved. Following IFRS, the information provided by the firms in financial statements regarding assets, liabilities, investment ratios, expenditures and cash flows will more accurate, understandable and comparable. The users of financial statements can use this information easily along with other information. Projections can be made easily when the current information is more accurate and reliable. Moreover, IFRS help organizations in developing transparency in accountability. The role of CMA is to assess the insurance sectors and capital markets in Oman. If the government takes initiatives to implement IFRS across firms, this will better regulate the system. Currently, CMA is performing the functions of regulation, monitors, securities issuance and licenses in Oman. It monitors the working of public shareholding companies and audit firms are accredited to accounts audit that is regulated by CMA (Oxford Business Group, 2009).