UNIVERSITY OF BELGRADE

FACULTY OF ECONOMICS

Mutaz Abdelrahim Abouagla Abdalla

THE CURRENT STATE AND

PERSPECTIVES ON FINANCIAL
REPORTING IN ARAB COUNTRIES-THE
SUDAN AS A CASE STUDY

Doctoral dissertation

Belgrade, 2017
 UNIVERSITY OF BELGRADE
FACULTY OF ECONOMICS

Mutaz Abdelrahim Abouagla Abdalla

THE CURRENT STATE AND

PERSPECTIVES ON FINANCIAL
REPORTING IN ARAB COUNTRIES-THE
SUDAN AS A CASE STUDY

Doctoral dissertation

Belgrade, 2017
 UNIVERZITET U BEOGRADU
EKONOMSKI FAKULTET

Mutaz Abdelrahim Abouagla Abdalla

TRENUTNO STANJE I PERSPEKTIVE

FINANSIJSKOG IZVEŠTAVANJA U
ARAPSKIM ZEMLJAMA – PRIMER
SUDANA

doktorska disertacija

Beograd, 2017
Supervisor:

Dr Vojislav Sekerez
Associate Professor
University of Belgrade, Faculty of Economics

Members of the committee:

Dr Miroslav Todorović
Full Professor
University of Belgrade, Faculty of Economics

Dr Radojko Lukić
Full Professor
University of Belgrade, Faculty of Economics

Dr Radmila Jablan Stenfanović

Full Professor
University of Belgrade, Faculty of Economics

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Date of defense: ………………………

 DEDICATION

This thesis is dedicated to my Mother, Wife and my three moons:

Fatima, Zeinab and Amina. While I was researching the state of
the financial reporting in Sudan including the neglect of the
adoption of IFRS in the country; I may have neglected all of
you. I promise that I will devote whatever time that is needed to
make it up to all of you, even if it requires whatever is left of my
life. As long as I breathe you are my top priority.

Mutaz

i
 ACKNOWLEDGEMENT
I would like to express a debt of gratitude to the many individuals who have contributed
to this research. Without their time and efforts, the completion of this thesis would not
have been successful. The debts of gratitude can never be repaid, it can only be
acknowledged.
At outset I would like to express my profound gratitude and appreciation to my
supervisor professor dr Vojislav Sekerez, who has accepted to be my supervisor since
the beginning stages of the research. I would also like to thank him for his professional
guidance and thoughtful suggestions during the period of the research. Beside the
research methodology and a lot of academic knowledge, he taught me other things
which are very useful in my life, such as patience, hard work, persistence and offered
emotional support. I am also in debt to my research committee including: professor dr
Radmila Jablan Stenfanovic, professor dr Miroslav Todorovic and professor dr.
Radojko Lukic. It is really difficult to find suitable words to express my appreciation to
them because it is impossible to enumerate their academic efforts, support,
encouragement and orientation, since the initial stage of the proposal until the
completion of the research work. Here the debt cannot even be acknowledged.
I am also grateful to the administration of the Faculty of Economic, University of
Belgrade, represented by the Dean, prof dr Branislav Boricic, the Vice Dean for
scientific research, prof dr Radmila Jablan Stenfanovic and the chairman of the doctoral
committee, professor dr Sinisa Zaric, for their individual support and encouragement. I
would also like to extend thanks to the Republic of Serbia for this opportunity to do my
postgraduate studies here at the University of Belgrade, the biggest and the oldest
higher education institution in the region. I hope that I will get another opportunity to
visit this beautiful country in the near future with my family.
I would also like to express my thanks to the entire academic staff of the faculty of
economic at the University of Belgrade whose assistance facilitated my academic study
and whose friendships made this place feel like a second home for me. Many thanks are
extended to Slobodanka Jelisavcic and Marija Stojkov, referents of doctoral studies, for
doing a very good job and for their efforts in explaining the faculty rules to me during
my period of study

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I am in debt also to a lot of friends here in Serbia, who have helped me in different
ways. In particular, I want to express my appreciation to my friends: Walled Faragalla
for conducting the statistical analysis of the research data and Nikaela Wilson for
helping me in editing.
I would like to thanks the University of Gadarif in Sudan, for granting me a long study
leave to pursue my postgraduate studies. I hope to find a chance to repay this debt when
I return there and hope that I can continue working in the faculty of Economic.
Last but certainly not least I would like to express my appreciation to my family for
their extreme patience over the suffering they experience due to my absence.

iii
 ABSTRACT
This study describes the state of financial reporting in Arab countries in general and in
the Sudan in particular. The study includes a survey of literature which describes the
accounting system in Arab countries. The main purpose of this study is to examine the
state of financial reporting in Sudan. Therefore, it focused on the factors influencing the
financial reporting practices, the suitability of the accounting information provided by
the accounting system, the state of accounting education and profession, the difficulties
that prevent the adoption of IFRS and the challenges facing the accounting practices in
Sudan. To extract the opinions of the respondents, the thesis adopted two set of
questionnaires for two different samples of respondents: the accountants in the
industrial companies and the academics in the Universities and Institutions. In addition
to the questionnaires, interviews were conducted with the certified accountants and
some selected individual in the regulatory bodies. Then, descriptive statistics, Mann
Whitney U test and the SPSS statistics packages, were used to analyze and explore the
views of respondents and the differences in their perceptions about the state of financial
reporting in Sudan.
The results reveal that: there are a lot of factors affecting the financial reporting in
Sudan, the accounting system in Sudan provides unsuitable information to the local
users, the accounting graduates from Sudanese Universities and Institutions are
inadequately prepared, the accounting profession is lagging behind the modern
developments in the world because of several reasons mainly the government
domination over the accounting bodies. Also, there are numerous difficulties preventing
the adoption of IFRS and a lot of challenges facing the accounting practices in the
country. Moreover, there are various methods adopted in the preparation of financial
statements and several accounting rules and procedures were used. This is because of
the weakness or absences of regulatory bodies and weak observation of the existing
laws, which depend mainly on the company law of 1925 that has not been updated since
the independence of the country. The study provides many proposed recommendations
to improve financial reporting in Sudan.
Key words: Arab countries, Sudan, Accounting, Financial reporting.
Scientific field: Economics.
Narrow Scientific field: Accounting and Finance.

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 Rezime

Istraživanje se bavi stanjem finansijskog izveštavanja u Arapskim zemljama, sa

posebnim fokusom na stanje u Sudanu. Disertacija uključuje pregled literature koja
opisuje računovodstvene sisteme u Arapskim zemljama. Glavni cilj ovog istraživanja je
da ispita stanje i perspektive razvoja finansijskog izveštavanja u Sudanu. Stoga je ono
prevashodno fokusirano na faktore koji utiču na praksu finansijskog izveštavanja,
primenjivost računovodstvenih informacija, stanje računovodstvenog obrazovanja i
profesije, teškoće koje sprečavaju usvajanje IFRS i izazove sa kojima se suočava
računovodstven profesija u Sudanu. U cilju prikupljanja odgovarajućih podataka, teza je
uključila dva uzorka ispitanika: računovodje u industrijskim kompanijama i akademike
na univerzitetima. Kao dodatak upitniku, sprovedeni su i intervjui sa sertifikovanim
računovodjama i nekim izabranim pojedincima u regulatornim telima. Nakon toga su
korišćeni opisna statistika, Mann Whitney test i SPSS statistički paketi kako bi se
analizirali pogledi ispitanika i razlike u njihovim opažanjima o stanju finansijskog
izveštavanja u Sudanu.
Rezultati pokazuju da postoji niz faktora koji utiču na finansijsko izveštavanje u
Sudanu. Kao krajnja posledica, računovodstveni sistem u Sudanu obezbedjuje
neodgovarajuće informacije lokalnim korisnicima, diplomirani studenti računovodstva
sa sudanskih univerziteta su neadekvatno pripremljeni za izazove prakse, a
računovodstvena profesija zaostaje za modernim razvojem u svetu, pre svega zbog
dominacije vlade nad računovodstvenim telima. Takođe, postoje brojne poteškoće koje
sprečavaju usvajanje IFRS, kao i ostali brojni izazovi sa kojima se suočava
računovodstvena praksa u zemlji. Osim toga, u praksi se koriste raznovrsni pristupi za
potrebe pripremanja finansijskih izveštaja, kao i različita pravila i procedure koje se tom
prilikom koriste. Ovo iz razloga slabosti i odsustva regulatornih tela, kao i nedovoljnog
poštovanja postojećih zakona, prvenstveno zakona o preduzećima iz 1925, koji nije
inoviran od nezavisnosti zemlje. Disertacija pruža brojne preporuke za poboljšanje
kvaliteta finansijskog izveštavanja u Sudanu.
ključne reči: Arapske zemlje, Sudan, računovodstvo, Finansijsko izveštavanje.
Naučna oblast: Eknomija.
Uža Naučna oblast: Računovodstvo i finansije.

v
 LIST OF CONTENTS
Page
Title
NO
Dedication i
Acknowledgements ii
Abstract iv
Abstract in Serbian language v
List of contents vi
List of tables viii
List of figures x
Introduction 1
Chapter one: Accounting system in Arab countries 4
1.1.Accounting system in developing countries 4
1.1.1 Factors affecting the accounting systems in developing countries 5
1.1.2 Ways of transferring accounting systems from western countries to developing 11
countries
1.2. Specificity of accounting system in Arab countries 13
1.2.1. Identity of the Arab countries 13
1.2.2. The business environment in Arab countries 14
1.2.3 Economic and social environment in Arab countries 16
1.2.4 Accounting system in Arab countries 20
1.3. Impact of international harmonization of accounting 27
1.4. Reasons and obstacles for harmonization 29
Chapter two: Basic characteristics of the financial reporting in Sudan 32
2.1. Historical background about Sudan 32
2.2. Impact of historical and environmental factors on the financial reporting in Sudan 34
2.2.1. The impact of colonization 35
2.2.2. The impact of cultural factors 35
2.2.3. The impact of political factors 36
2.2.4. The impact of economic factors 37
2.2.5. The impact of financial sector 39
2.3. The legal and regulatory framework of accounting practice in Sudan 41
2.3.1. The companies Act of 1925 42
2.3.2. The taxation Act 51
2.3.3. Establishment and evolution of the auditor general chamber 52
2.4. Accounting education and profession in Sudan 55
2.4.1. Accounting education in Sudan 55
2.4.2. Accounting profession in Sudan 60
2.5. The weaknesses in the current financial reporting system in Sudan 64
Chapter three: Comparative outlook on the accounting practices in Arab countries 67
3.1. Accounting practices in Egypt 67
3.2. Accounting practices in the kingdom of Saudi Arabia 76
3.3. Accounting practices in Libya 84
3.4. Comparative outlook 94
Chapter four: An empirical study on the current accounting practices in Sudan 99
4.1. The general framework of the study 99

vi
4.2. The attitude of the accountants about financial reporting in Sudan 107
4.3. Academics’ view about financial reporting in Sudan 128
4.4. Comparison of the results and testing the hypotheses 150
4.5. Attitude of the regulatory bodies about financial reporting in Sudan 164
4.6. Analysis of different financial reporting practices in Sudanese companies 170
Chapter five: Perspectives for improving the financial reporting system in Sudan 182
5.1. Possibilities of improving regulatory framework of accounting in Sudan 185
5.2. Proposals to improve the state of the accounting profession and the accounting 189
education in Sudan
5.3. Determinants of the adoption of IFRS in Sudan 196
5.4. Scopes of adoption of IFRS in area of improving financial reporting in Sudan 198
Conclusion 201
Bibliography 207
Appendixes 214
Appendix NO (1): Questionnaire (A): Accountants in industrial companies 215
Appendix NO (2): Questionnaire (B):Professors in Sudanese Universities and Institutions 224
Appendix NO (3): Questionnaire (A): In Arabic language 233
Appendix NO (4): Questionnaire (B): In Arabic language 242
Appendix NO (5): Abbreviations 249
Appendix NO (6) Wide abstract in Serbian language 251
Appendix NO (7) Biography 259

vii
 LIST OF TABLES
Table Page
Title
NO NO
1.1 GDP per capita and population of some Arab countries 17
4.1 The distributed, received, valid and missing questionnaires 101
4.2 The results of Cronbach Alpha (α) test for reliability 105
Tables of questionnaire A (Accountants)
4.3 Frequencies and percentages of the respondents regarding the academic qualification 107
4.4 Frequencies and percentages of the respondents regarding the specialization 108
4.5 Frequencies distribution and percentages of the respondents by country of formal 109
education
4.6 Frequencies distribution and percentages of the years of experience 110
4.7 The suitability of the existing accounting principles and auditing procedures 112
4.8 Factors affecting the accounting reporting practices and development in Sudan 113
4.9 The reasons of unsuitability of accounting information to the local users in Sudan 115
4.10 Suggestions for improving the financial reports 116
4.11 The difficulties that prevent the adoption of IFRS in Sudan 119
4.12 The potential benefits from the adoption of IFRS in Sudan 120
4.13 The activities of the accounting profession in Sudan 121
4.14 The role of academic institutions in improving the accounting profession 122
4.15 The challenges of accounting practices in Sudan 124
4.16 The essential elements to improve the accounting practices in Sudan 125
4.17 Methods and means by which the government could improve accounting practices in 127
Sudan
Tables of questionnaire B (academics)
4.18 Distribution of the respondents according to the academic qualification 128
4.19 Distribution of respondents by country of formal education 129
4.20 Distribution of the respondents by academic job 130
4.21 Distribution of the respondents by years of experience 131
4.22 The reasons of inadequacy in the preparation of accounting graduates from the 133
Sudanese’s Universities and Institutions
4.23 Means and policies for developing the accounting education in Sudan 134
4.24 The suitability of the existing accounting principles and auditing procedures 136
4.25 Factors affecting the financial reporting practices and development in Sudan 137
4.26 The reasons of unsuitability of accounting information to the local users 138
4.27 Suggestions for improving the financial reports 139
4.28 The difficulties that prevent the adoption of the IFRS currently in Sudan 141
4.29 The benefits of the adoption of IFRS in Sudan 142
4.30 The activities of accounting profession in Sudan 143
4.31 The role of academic institutions in improving the accounting profession 144
4.32 The challenges of accounting practices in Sudan 146
4.33 The essential elements for improving the accounting practices in Sudan 148
4.34 Methods and means by which the government could improve accounting practices in 149
Sudan
Tables for comparison
4.35 Comparison of opinions about the Factors affecting the financial reporting in Sudan 151

viii
4.36 Comparison of opinions about the activities of accounting profession in Sudan 153
4.37 Comparison of opinions about the reasons of unsuitability of accounting information 155
to the needs of the local users in Sudan
4.38 Comparison of opinions about the difficulties that prevent the adoption of IFRS 159
currently in Sudan
4.39 Comparison of opinions about the benefits of the adoption of IFRS in Sudan 162
Tables of different financial reporting practices in the Sudanese companies
4.40 The frequencies and percentages of the types of companies 171
4.41 The types of financial statements in the Sudanese companies 173
4.42 Ranking of the users of financial reports according to their importance 174
4.43 Basis of the inventory evaluation 175
4.44 Inventory cost methods 176
4.45 Methods of classification of fixed asset and accumulated depreciation 177
4.46 Methods of depreciation of fixed assets 178
Tables of proposal for improvement
5.1 Comparison of opinions regarding the challenges facing accounting practices in Sudan 182
5.2 Comparison of opinions about the proposals to improve the regulatory framework and 185
accounting practices in Sudan
5.3 Comparison of opinions about the proposals to improve the state of the accounting 190
profession
5.4 Comparison of opinions about the roles of academic institutions in improving the 192
accounting profession in Sudan

ix
 LIST OF FIGURES
Figure Page
Title
NO NO
Figures of questionnaire A (Accountants)
1 Distribution of the respondents by academic qualification 108
2 Distribution of the respondents by Specialization 109
3 Distribution of the respondents by country of formal education 110
4 Distribution of the respondents by the years of experience 111
Figures of questionnaire B (Academics)
5 Distribution of the respondents by academic qualifications 129
6 Distribution of the respondents by country of formal education 130
7 Distribution of the respondents by the scientific category in the academic job 131
8 Distribution of the respondents by the years of experience 132
Figures for comparison between the two perspectives (A&B)
9 Factors affecting the financial reporting in Sudan 151
10 The activities of accounting profession in Sudan 154
11 The reasons of unsuitability of accounting information to the local users 156
12 The reasons for the inadequate preparation of accounting graduates of the 158
Sudanese Universities and Institutions
13 The difficulties that prevent the adoption of IFRS currently in Sudan 160
14 The potential benefits from the adoption of IFRS in Sudan 163
Figures of different financial reporting practices in the Sudanese
companies
15 The types of companies 172
16 Basis of the inventory evaluation 175
17 Inventory cost methods 176
18 Methods of depreciation of fixed assets 178

x
 INTRODUCTION
In developing countries, accounting and specifically, financial reporting is a
fundamental element in socio- economic development, because it could provide a strong
foundation for economic planning, control and better allocation of scarce resources.
Therefore, financial reporting has an effective contribution in the rationality of the
economic decisions, either for individuals, companies or countries.
The accounting practice of a country is a reflection of its local environment, which is
affected by a lot of internal and external factors. This leads to the fact that there are
divergent accounting practices among different countries resulting in disadvantages to
both international preparers and users of financial statements. Mostly, when the
accounting practices of a country follow the practices of another country, it brings
irrelevant accounting practices and information to the local users. On the other hand, in
multinational companies, when the accounts of a subsidiary are prepared in accordance
with local standards or procedures, the multinational company doesn’t ensure that the
results of each of its subsidiaries will be reported in accordance with the same standards
and procedures that are used by that subsidiary. To solve this problem, the International
Accounting Standards Board (IASB) issued International Financial Reporting Standards
(IFRS) in order to minimize the differences in accounting practices among countries.
The suitability of IFRS has been a debatable issue in accounting literature, since it was
issued in accordance with the environment of developed countries. As a result, the
adoption of these standards (IFRS) varies from country to country, so while some
countries succeed in adopting IFRS others are still facing problems in this process.
Arab countries have social and cultural similarities. Therefore, it represents one social
environment which is a combination of similar society’s beliefs, practices, customs, and
behaviors. The social and cultural environment of the Arab countries affects
international business operations and financial reporting in all of them. However, there
are considerable differences in economic characteristics, such as: gross domestic
product (GDP), income per capita, inflation and natural resources. These differences are
mostly referring to the discovery and export of oil in the Gulf countries. This research
provide some perspectives about the state of financial reporting in Arab countries,
through reviewing the available literature about the environmental factors affecting the
financial reporting in those countries and focusing mainly on the state of accounting

1
education, accounting profession, the regulatory framework and the extent to which
IFRSs are adopted. In addition to that, the research provides a comparative outlook on
the state of accounting practices among some Arab countries.
Moreover, the research consists of an empirical study conducted on the state of financial
reporting in Sudan, which is a part of the Arab region. The objective of the empirical
study is to examine the elements which relate to the state of financial reporting in
Sudan. Therefore, it focusses on: the environmental factors affecting the accounting
practices in Sudan, the state of accounting education, accounting profession, the
regulatory framework, challenges facing accounting practices in Sudan, benefits and
determinants of the adoption of IFRS in Sudan, in addition to many proposals for
improvement. Hence, the following questions should be answered at the end of the
empirical study:

1. What are the environmental factors affecting the accounting practices in Sudan?
2. What is the current state of the accounting education and accounting profession
in Sudan?
3. What is the current state of the regulatory framework of accounting in Sudan?
4. What are the potential benefits of the adoption of IFRS in Sudan?
5. What are the difficulties preventing the adoption of IFRS in Sudan?
6. What are the challenges facing the accounting practices in Sudan?
7. What are the suitable proposals for improvements?
In addition to the examination and describing the above elements, the research aimed to
test the following hypotheses:

H1: Numerous historical, cultural and economic factors have resulted in unsatisfactory
condition of financial reporting in Sudan and other Arab countries.
H2: The government domination over the accounting professional bodies in Sudan
makes accounting profession lags behind the modern development in the world.
H3: The lack of systematic accounting education hampers the development of
accounting practices in Sudan.
H4: Accounting system in Sudan is providing inappropriate information for specific
local users, because it’s created in the model of advanced accounting practices of former
colonial power - United Kingdom.

2
H5: The weakness of regulatory system and accounting education, as well as the nature
of business ownership, limits the adoption of IFRS in Sudan.
H6: Limited or full scope adoption of IFRS in Sudan might improve the quality of
information provided by local financial reporting system.
The methodology of this research dealt with how to investigate the research questions
and achieve its objectives. Due to the fact that there is a lack of literature in the area of
this research and our main objective of describing the state of financial reporting, the
research adopted the descriptive methodology to provide more meaningful results. As
Kumar (1999) point out "descriptive research attempts to describe systematically a
situation, problem, phenomenon, service or program, or provides information about,
say, the living conditions of a community or describes attitudes towards an issue". The
populations of this research consist of accountants in the Sudanese industrial companies
and the academics in the Sudanese universities and institutions. The data of the
empirical study were collected through questionnaire and unstructured interview
questions.
Since the empirical study is based only on Sudan, this can be justified on the following
grounds:

1. Sudan is the home country of the researcher; therefore he has extensive

familiarly with the language and culture. He also has background in the state of
accounting education and practices in Sudan, which is as a result of his work as
a lecturer in the department of accounting and finance at university of Gadarif in
Sudan. This resulted in relatively easy data collection.
2. There is a small amount of literature available in English in the area of the state
of financial reporting in Sudan. Therefore this research can provide information
to multinational companies and all international investors.
The research is divided into five chapters: Chapter one covered accounting systems in
Arab countries, chapter two is about the basic characteristics of financial reporting in
Sudan, chapter three dealt with comparative outlook on the accounting practices in Arab
countries. Chapter four provided an empirical study on the current accounting practices
in Sudan. While the final chapter (five) presented perspectives for improving the
financial reporting system in Sudan. At the end of the research a conclusion is
presented.

3
 CHAPTER ONE
ACCOUNTING SYSTEM IN ARAB COUNTRIES
1. 1 Accounting system in developing countries
Before examining the accounting system in developing countries it is important to
explain the meaning given to the term 'developing countries'. According to Todaro
(1994), a developing country in a broader sense can be defined as a country seeking to
advance to a higher state of economic well-being. This term would therefore include a
wide range of countries, mostly found in Africa, Asia and Latin America. Most of these
countries received their independence from the colonial powers from the late 1950s
onwards and share the common characteristic of the existence of poverty, while
experiencing wide disparities in their levels of development. Similarly, Wallace (1990)
argues that developing countries refer to distinct and heterogeneous groups of countries
mostly found in Africa, Asia, Latin America, The Middle East and Oceania. Each
country is different in terms of: GDP, population growth, culture, literacy and education
system, political systems and level of economic development.
In general, characteristics of these countries can be pointed out in the following:
- Poverty
- Rapid population growth.
- High levels of unemployment.
- Unequal income and wealth distribution.
- Regional imbalances.
- Insufficient domestic savings.
- Large foreign debt.
- Low levels of technology.
- Need to improve education.
Similarly, accounting system has been defined by Nobes (1998) as 'a set of
practices used in a published annual report'. He asserted that a country could have more
than one system, for example, large public companies may adopt very different
practices from that which is normally adopted by the large companies within the
country. In other words, there can be one system for companies with publicly traded
securities and another for unlisted (private or state owned) companies. Therefore, it may

4
be useful for the country to adopt the most dominant accounting practices which are
used by the majority of enterprises.
Accounting system in developing countries differs from accounting system in
developed countries because of a difference in the need for information in each one. For
example, in developed countries there is more attention placed on financial accounting
and auditing to provide information about profitability of an entity. This serves the
investors more than other users of accounting information. On the other hand, in
developing countries, a significant emphasis is placed on economic planning at the
macro level.
In the same context, Perera (1989) declares that an examination of the accounting
development patterns of most developing countries reveals that they had little chance to
involve the accounting systems which truly reflect the local needs and circumstances.
Their existing systems are largely extensions of those developed in others countries,
particularly western capitalist countries such as the UK and US. These systems were
either imposed through colonial influence or by powerful investors like Multinational
Corporations.
1.1.1 Factors affecting the accounting systems in developing countries
It is argued by some researchers (e.g.: Nobes 1998, Nobes and Parker 2008, and Abbas
2012) that accounting is a product of its environment its shape is affected and reinforced
by characteristics unique to its prevailing environment. The environmental factors
causing differences in accounting systems and practices include a long list. Examples
are: stage of economic development, size and complexity of business, nature of business
ownership, sources of finance, stage of development of capital markets, taxation,
inflation, and type of financial information, political and legal systems, colonial
inheritance, culture, education, profession, religion, and international factors. This
variety in environmental factors implies that accounting systems and practices in
different countries are more likely to be affected differently by different factors. What
may be considered as an influential determinant of the accounting system in one country
may just be a secondary factor for another. It means that accounting system of each
country is affected by different influential factors. As there is a very small possibility
that influential factors of two countries will be equal, they can also be considered as
generators of national specificities. As a result, there is no consensus in the degree of

5
importance accounted for by each of the environmental factors in shaping the
accounting structure in a country. Some researchers emphasize the economic factors,
others consider culture as the most influential environmental factors, while some also
accentuates the political factors.
Based on the above debate on the factors that can affect the accounting system in
developing countries, several factors have been singled out and explained in detail in the
following section, by focusing more on some factors and less on others, due to the fact
that the literature reviewed does not deal equally with all factors:
Type of economic system: The economic environment has a great impact on
accounting development in any country. It has been common practice to classify
economic systems according to political ideology and ownership of the factors of
production. The scale ranges from almost complete reliance on free market forces (e.g.
Switzerland) to almost complete central planning (e.g. Russia). Between these extremes,
governments are involved to varying degrees in the control of their economies, thus
different accounting systems are needed to reflect these variations (Kayed 1990).
Along the same context, Abbas (2012) argues that the financial reporting system seems
to more beneficial where there is a high degree of economic freedom, large private
sector and relatively little intervention by the state, as success of private enterprises
depends mainly on flow of adequate information between market participants. The stage
of economic development and growth identifies the type and number of business
transactions conducted in a country which in turn shapes the accounting system in use.
In small underdeveloped economics the need for financial information is minimal.
However, as the economy grows in size and complexity, the demand for accounting
information for decision making increase and this impact favorably the financial
system. Fundamentally, the complexity of the economy is reflected in the accounting. In
an agricultural based economy it requires only a primary accounting system, but in
industrial economy, there is urgent need for more advanced accounting system.
For example, in countries whose businesses obtain funds through the issuance of
securities, investors depend on financial reports as a very important source of
information that used in performance evaluation of these businesses because there is
limit access to alternative sources of information. For that reason reporting in these
countries is focused on the investors’ needs of information, and the countries with this

6
type of system have developed proprietary securities markets as well as debt securities
markets. As a result of the large number of shareholders and the impossibility of
contacting each one individually, financial reports should be transparent and contain a
sufficient amount of information to indicate how a business is performing. Hence
countries with developed active capital markets tend to have strong financial reporting
system and vice versa for those countries with less developed capital markets.
According to Belkaoui (1985), level of exports affects accounting practices because
exports necessitate free trade policies, cooperation with other countries, enhances flow
of financing and, consequently, increases the need for adequate and reliable
information. Thus, it is maintained that the higher level of exports, the better the
reporting and disclosure practices. Size and complexity of business firms is an
important factor that determines the standards of reporting practices in a country.
Business firms of different size and complexity require different methods and
procedures for reporting their financial results. The larger the size and the more diverse
activities and markets of business firms, the greater need for more sophisticated
financial reporting techniques and consequently, more developed accounting system.
The nature of business ownership is another factor that has its impact on accounting
system. When business firms are either family owned and managed, or incorporated as
private limited companies, the disclosure of information about business activities will
be restricted to those who are closely involved, namely its owners and management.
This will negatively affect in the financial reporting system by limiting the information
available. In contrast, when the dominance is for publicly held companies, financial
reporting and disclosure systems benefit, as those companies are publicly accountable
and obligated to be transparent and publish financial reports regularly.
Cultural effects: Hofstede (1980) defined culture as" the collective programming of the
mind which distinguishes the members of one human group or category of people from
another". He also emphasizes that, culture is a collection of social norms consisting of
values that is a board tendency to prefer certain state of affairs over others, which is
shared by major groups within a nation. He identified four items underlying societal
values which were recognized as common elements of culture: Individualism, Power
Distance, Uncertainty Avoidance and Masculinity. Therefore, different values within

7
national boundaries have the potential to promote and sustain significant differences in
social behavior and in social artifacts such as accounting system.
According to Askary (2006), culture in different societies strongly affects national
accounting systems, likely causal factor of different national accounting practices in
accordance with differing national cultures. The cultural environment is generally
acknowledged to be a national or original system comprising language, religion, morals,
values, attitudes, law, education, politics, social organization, technology and material
culture. The interactions of these cultural elements on accounting system are expected
to be exceedingly complex. As Perera (1989) stated, accounting practices evolve to suit
the circumstances of a particular society at a particular time.
In addition to knowing a country's type of economic system, it is also necessary to
explain its culture in order to better understand the country's accounting system and
accounting practice. Therefore culture should be considered as a powerful
environmental factor that affects the development of accounting system.
Legal and political factors: Some countries have a legal system that relies upon a
limited amount of statute law, which is then interpreted by courts, which build up large
number of law cases to supplement the statutes. Such a ‘common law’ system was
formed in England. A common law rule seeks to provide an answer to a specific case
rather than to formulate a general rule for the future. Although this common law system
emanates from England, it may be found in similar forms in many countries influenced
by England, same with countries which influenced by the USA. This (nature of common
law) influences commercial law which traditionally does not prescribe rules to cover the
behavior of companies and how they should prepare their financial reporting. To a large
extent accounting within such a context is not specified in detail in law. Instead,
accountants themselves establish rules for accounting practice, which may come to be
written down as recommendations or standards. (Nobes, and Parker, 2008)
In the above situation, a company puts in general terms what information should be
disclosed and how financial statement should be presented. This leads to the discussion
on the nature of the company's financials, because it is an important factor that affects
the determining of how financial statement should be presented. Companies in a country
can be formed by two models: equity outsiders or credit insiders. In the credit insiders
countries there is no big market demand for audited and published financial reports, and

8
the demand for accounting reports is strongly linked with the government's need for
taxation purpose, because companies are dominantly financed by banks or the
government, so their management have insider information about business. Therefore,
tax requirements will dominate accounting rules. On the other side, in equity outsiders
countries there is a great demand for audited and published financial reports for many
users and the government is one of those users, because companies are publicly
accountable and obligated to be transparent and publish financial reports regularly,
because companies are financed from thousands of shareholders which are inferior
compared to management, therefore they need to be good in information.
Also the political factor is a key factor that influences the accounting system through
the effect of the level of freedom in a country and the colonial inheritance. Abbas
(2012) pointed out that political suppression which deprives people of their right to
select members of their government and participate in setting laws and policies is more
likely to hinder the development of a strong accounting profession. This is because loss
of the freedom implies hindrance to the tradition of a full and fair disclosure. Therefore
the relation between legal and political factors, to accounting system is claimed to be
positive.
Professional and Educational factors: The impact of accounting profession on
accounting system has been stressed by many researchers; (e.g. Perera.1989, Nobes
1998, and Taufu'i 1996). It is claimed that the strength, weakness, independence and
competence of accounting profession play an essential role in determining the quality of
a country's accounting system.
According to Taufu'i (1996), in most developing countries the government has direct
impact on accounting structure and process and it influences accounting through
legislating or dictating what accounting procedures that must be followed. In most
developing countries, these practices take place because the national accounting bodies
are either unorganized or not exist to perform such role. If national accounting body is
well organized and technically capable of undertaking such a role to meet the needs of
the users, the government may not be involved very much. Along the same line Perera
(1989) argued, if the accounting profession is not effective in its sphere of operation,
government interference to safeguard the public interest is the most natural outcome that
can be expected in any country. As he asserted, there is ample evidence to suggest that

9
in many developing countries the profession is not effectively regulating accounting and
financial reporting, whereas there are other countries without any recognized
professional organization. Under such circumstance, it may not be sensible to depend on
professional self-regulation.
Therefore, the strength or weakness of profession has an essential role in shaping the
accounting system in a country because through its weakness or strength the door can
be opened or closed in front of the government involvement.
In general, developing countries are characterized by a relatively low degree of
professionalism in the accounting subculture. As a result, there will be little regard for
adequacy and accuracy of the published accounting information. Therefore governments
may be forced to provide legal authority in order to attest credibility and provide a
higher reliability of published financial information.
Also education and particularly, accounting education is considered as an important
factor that determines the accounting system and practice in a country. Accounting
educational system of a country is a part of large educational system; it affected and
affects the economy, and indeed the whole country's culture environment. Therefore, an
effective educational system of one country is practically unsuitable to serve the
educational needs of another country because of differences in economic, social and
cultural settings. Unfortunately, in most developing countries, the accounting
educational systems were imported from colonial powers. These educational systems
are unsuitable to serve the needs of developing countries.
In addition to the above, there are others factors that can affect accounting system such
as: taxation, inflation, history, and so on, but it is possible to find or to assume
interdependence with factors that were already described. These arguments suggest that
accounting is a greatly influenced by the environment within which it operates, but not
all environmental factors have the same degree of influence, some factors are very
powerful, such as a strong professional body that have a significant effect in shaping
and developing accounting systems, while other factors may adversely influence
accounting system.

10
1.1.2 Ways of transferring accounting systems from western countries to
developing countries
Developing countries have adopted the accounting practices of the developed countries
without modifying them to meet the needs of their countries, because of the belief that
which is useful for developed countries is surely useful for developing countries.
Opposite of this belief, Baydoun, and Willett (1995) argue, accounting systems used in
developing countries may be irrelevant to their needs because they originate in western
countries with different culture values. The following are several ways by which
accounting systems transferred from western countries to developing countries.
Colonial powers: The effect of colonization has been cited by many researchers. Kamla
(2007), in his research (critically appreciating social accounting and reporting in Arab
Middle East), explains the effects of colonization by saying that as a result of the British
colonial influences from 1882 to 1956, the training of accountants, the organization of
the accounting profession, disclosure standards, the law regulating companies and
financial reporting in Egypt were based on those of the UK. Also Ashraf and Ghani
(2005) describe how the colonial past and later the international financial institutions
such as the International Monetary Fund (IMF) played a key role in shaping accounting
and reporting practices in Pakistan. They argue that British trained accountants are a
major source of influence on accounting practices in former British colonies. They
consider the colonial background of a country as a key explanatory factor that affected
the accounting system in any country. Therefore, the colonial powers administration is a
very important way through which accounting systems of the developed countries were
imported to the developing countries.
International financial institutions: The international institutions are under
considerable dominance of the developed countries. Therefore the developing countries
receive the financial loans and support from these institutions under a lot of rules that
have essential effect on their accounting systems. As it mentioned above, by Ashraf and
Ghani (2005) IMF has played an essential role in imposing western style of accounting
systems on developing countries. The aid was for teaching or training staff, the supply
of English or French text books, grants to students or loans to implement projects, all
these have the potential to further a developing country's sense of indebtedness to
developed countries, (Baydoun and Willett, 1995). Therefore these international

11
financial institutions and their loans and supports can be characterized as one of the
essential factors that played significant role in transferred the accounting system of the
developed countries to the developing countries.
Multinational companies: Generally the home countries of the most multinational
companies are the Western countries, which do big effort on Third world countries to
make them cooperate with their multinational firms. Khasharmeh (1995) argues the
multinational companies from Western countries often impose on their associates in
developing countries the use of an accounting practice that conforms in many respects
with the accounting of developed industrialized nation. As a result of rising demand for
Western accounting and accountants who are familiar with western accounting
practices, a lot of international accounting firms set up offices in developing countries.
In addition to the above ways by which accounting systems transferred from western
countries to developing countries, Wallace and Briston (1993) point out that the
international ways to transfer accounting technology during many years in a non-
formalized manner through the following methods:
a. Previous colonial legacies.
b. The importation of accounting qualifications from developed countries.
c. The activities of transnational enterprises in the developing countries.
d. The role of international organizations like the World Bank and regional
Development agencies like the African Development Bank (AFB)
e. Efforts by the developed countries' aid institutions;
f. The role of the International Federation of Accountants (IFA), the International
Accounting Standards Committee (IASC) and regional groups such as, the
African Accounting Council (AAC) and the Association of Accounting Bodies
of West Africa.
g. The fact that English is the first or second language in many of these countries
has led to the use of British, American or Australian textbooks for accountancy
training, and the local text books are rarely available.
The ways in which accounting researchers stressed their importance in transfer of
accounting system from the developed countries to the developing countries include:
colonial powers, international financial institutions, loans and supports, multinational

12
companies, educations and training, the role of international accounting bodies and the
use of English or French as the first or second language in most of developing countries.
1.2. Specificity of accounting system in Arab countries
As mentioned before, there is a strong relationship between the accounting system and
many environmental factors, such as: economic factors (which include inflation,
business environment …etc.), cultural factors, legal system, education and so on. This
part tries to cover the specificity of Arab countries which have a considerable effect on
their accounting system. Therefore, here it is worth to provide sufficient description of
Arab countries through identifying these countries and their history, religion, language,
business environment, economy, politics, customs and norms.
1.2.1. Identity of the Arab countries
The Arab World consists of 22 countries: Algeria, Bahrain, Comoros, Djibouti, Egypt,
Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar,
Saudi Arabia, Somalia, Sudan, Syria, Tunisia, United Arab Emirates, and Yemen. The
Arab World often referred to as MENA (Middle East and North Africa) combining
countries from the Middle East as well as from the north of the African continent.
The Arab countries are stretching in an area of more than fourteen Million square
kilometers. These countries have a population of more than three hundred million
people. Hence, it is fateful to explain here that these Arab countries undoubtedly have a
lot of common. For example, they share the same language (Arabic), culture including
religion (Islam). But they have also some differences in economic wealth standards and
historical, political level. (Dik 2011, Zakari 2013)
According to their various economic, political, and social aspects Arab countries can be
divided into four groups. The Asian part of Arab World consists of two groups. The first
is called Mashreq and includes: Saudi Arabia, Oman, Qatar etc. These countries have
closer cultural and economic associations, and also can be called Gulf countries. Second
group is called Levant countries and includes: Syria, Jordan and Lebanon. The African
part of Arab world also consists of two groups. The first is called Arab Maghreb and
includes: Morocco, Algeria and Tunisia. The second group is called Arab of North
Africa and includes: Sudan, Egypt, and Libya.
Politically and historically, Arab countries have another distinction: Sudan, Egypt, Iraq,
and Jordan, were at various time under British mandate, and the United Kingdom also

13
controlled most of the Gulf countries in the eighteen century. Syria, Lebanon, and
Maghreb group were under French mandate, (Barakat, 1993). After the Gulf War, the
Gulf countries became more influenced, firstly by the Americans and secondly by
British and Canadians. Therefore, the Anglo-American countries have an important
position in the Arab countries and great influences on Arab Companies, economies
investments and as a result accounting systems.
The Arab world is rich in natural resources especially agricultural products in Sudan
and Egypt and raw material such as gas and oil in the Gulf region which are important
sources for energy in the world. The revenues from these resources have become a basic
source of income for most of Arab countries, in addition to other sources such as
tourism in some countries such as Emirates and Egypt. In the same line OECD (2011)
pointed out, most Gulf economic benefit from vast natural resources and rising energy
prices and has used the resulting revenues for improvement in their competitiveness in
the recent year. While North Africa and Levantine economies face numerous
impediments.
It is important to clarify that, Arab nations are different from Islamic nations, simply,
because Arabic is the official spoken language for all Arabic nations but not for all
Islamic nations, such as, Iran, Indonesia, Turkey, Malaysia. In other words, all Arab
countries share language and religion while the Islamic countries share only the religion
with different languages.
1.2.2. The business environment in Arab countries
Business environment is a combination of internal and external factors that affect the
companies. The internal factors are usually under the control of companies, while the
external environmental factors are uncontrollable, because the companies have no
control over it. These factors include all factors which influence business and exist
outside the companies, such as: social, economic, political, legal and technological
factors, etc.
There are some factors that make the business environment in Arab countries more
attractive, especially the economic and social factors. In the same context Dik (2011)
said" Several factors make the business environment of the Arab World more appealing.
Many Arab countries improved their business and economic conditions by improving
their infrastructure and transportation system, eliminating many trade barriers,

14
implanting modern technology and strengthening many efficient industries". On other
side there are some factors have negative effects on the business environment in Arab
countries. OECD (2011) ranked the most problematic factors for doing business in the
Arab world as follows:
1. Access financing
2. Restrictive labor regulation
3. Inefficient government bureaucracy
4. Inadequately educated workforce
5. Corruption
6. Poor work ethic in national labor force
7. Inadequate supply of infrastructure
8. Policy instability
9. Government instability/ coups
10. Inflation
11. Tax rates
12. Tax regulations
13. Foreign currency regulations
14. Poor public health
15. Crime and theft

No need to explain that these problems do not exist in all Arab countries at the same
level because as it was mentioned above, Arab countries are divided into four groups,
which are characterized by considerable differences especially in the political and
economic situations, despite their common factors. As OECD (2011) explained Arab
countries are highly diverse in terms of national competitiveness. While most Gulf
economies benefit from vast natural resources and rising energy prices, and have used
the ensuing revenues in recent years for improving their competitiveness, the challenges
are more profound in North Africa and the Levant. Economies in these two sub-regions
demonstrate numerous competitive weaknesses that will have to be dealt with in the
future, especially in the light of the employment challenges in these countries.

15
1.2.3 Economic and social environment in Arab countries
Although the Arab countries are socially and culturally similar, to large extent, there are
some variations among them particularly in economic characteristics such as, high per
capita income, low density population, heavy dependence on expatriate labor and
superior infrastructure. For example there are differences between Gulf countries as one
part from Arab World and others parts, in terms of possession of wealth, as a result of
the fast economic changes in the Gulf countries after the discovery and export of oil.
As it was noted by Yapa and Wijewardena (1995), the dramatic hike in oil prices in
1974 started to reveal the main cause of the economic differentiation among Third
World Countries (TWCs). On one hand it becomes clear that many TWCs simply did
not and would never have the resources to pay for their increased oil import bill, as well
as the increased food import bill. On the other hand the oil price hikes radically changed
the economic fortunes of the oil exporting countries. Some of these countries received
incomes far in excess of the development needs of their relatively small population. The
heavy increases of oil prices and the high demand for oil in the international market
rapidly changed the economic performance of these countries. Being the main exporters
of oil these countries accumulated huge liquid assets. This extraordinarily high inflow
of foreign income changed the whole economic scene of these countries by pushing
their per capita income to the highest in the world with enormous cash reserves built up
unknown in recent history.
The following Table (1.1) shows the economic growth varies between some Arab
countries through GDP per capita- US dollar and the population:

16
 Table (1.1)
GDP per capita and population of some Arab countries for the year 2014
Country Population GDP per capita
Thousands US dollars
Algeria 39.500 5,405.528
Bahrain 1.268 26,701.320
Djibouti 0.939 1,691.717
Egypt 86.700 3,303.752
Iraq 34.278 6,520.384
Jordan 6.675 5,374.677
Kuwait 3.999 43,167.920
Lebanon 4.510 11,091.941
Libya 6.168 6,670.837
Mauritania 3.621 1,402.965
Morocco 33.179 3,314.608
Oman 3.717 20,927.003
Qatar 2.235 93,990.405
Saudi Arabia 30.770 24,252.173
Sudan 37.389 2,005.010
Syria n/a n/a
Tunisia 10.998 4,422.067
United Arab Emirates 9.302 42,043.777
Yemen 27.460 1,574.246
Source: IMF: World Economic Outlook Database, October (2015)
The above table (1.1) clarifies, that there is significant difference in the GDP per capita
between Gulf countries such as: Qatar (93,990.405), Kuwait (43,167.920) and Bahrain
(26,701.320). While other countries such as: Mauritania (1,402.965), Yemen
(1,574.246), Djibouti (1,691.717) and Sudan (2,005.010). We also note that the
population of Gulf countries is highly low compared with other countries.
The rapid economic growth of the Gulf region can be attributed to radical changes in the
economic and business environment in several areas. (Dik, 2011) summarized that in
five fields as follows:

17
Firstly, changes in law and commercial regulations accelerated the establishment of
foreign investments and brought foreign expatriate workers into these countries.
Secondly, considerable adjustments have been made to the finance and banking systems
which allow specifically flexible commercial transactions between companies.
Thirdly, complete transformation has been also undertaken in the educational system
and vocational training for the labor force, particularly the national. By facilitating the
presence of international universities and professional agencies, the quality of the higher
education has been improved and that enables great benefits for the business sector.
Fourthly, serious changes have been made in adopting modern technology in the several
economic and industrial sectors.
Fifthly, substantial development to the infrastructure systems in all Gulf States has been
accomplished recently.
In the other part of the Arab World, Maghreb countries show also considerable changes
in their business environment for substantial improvements. These measures contain
stabilizing macroeconomic conditions, integrating their ongoing trade with the
European market as well as the global market and improving economic reforms. All
these significant changes caused a good economic growth and notable rise in the income
per capita in recent years. In addition to that, in the last two decades, many Arab
countries have been shifting their economic environment from socialist economy
towards a mixed economy or social market economy. Furthermore, some Arab countries
have recently made considerable economic reforms to achieve a liberal or open
economy such as, the countries in the Gulf region (World Bank, 2006).
Consequently, the economic environment in Arab countries seems to be attractive for
foreign investment, but there are differences in the amount of foreign investments
flowing to these countries, as a result of diversity in the economic standards which have
a considerable effect upon the average of foreign direct investment among Arab
countries. Therefore, the Gulf countries have the largest share from the foreign
investment compared to other Arab countries. Dik (2011) indicated that a lot of Arab
countries are implementing important changes to ensure better business environment for
investments. Although the foreign investment in the Arab World increased especially in
Gulf region over the last decade, most Arab countries still have to develop and improve
their financial sector. Moreover, foreign investment is facing other obstacles in several

18
Arab countries: underdeveloped capital markets and unstable political situation in the
region are considerable barriers in the Middle East, in addition, the high rate of poverty
and unemployment.
Development of financial sectors in the Middle East and North Africa (MENA) region
made significant strides from the 1970s through the mid-1980s. As in many of the other
factors underlying growth, the performance on financial development is differentiated
across countries in the region. Some countries have well-developed financial, mainly
banking, sectors. These include the Gulf countries, Lebanon, and Jordan. Other
countries in the region, such as Egypt, Morocco, and Tunisia have made important
advance over the past 30 years, although further steps remain to be taken. Recent
banking sector and monetary policy reforms include strengthening of banking
regulation and supervision (such as, in Bahrain, Jordan, Lebanon, Morocco, Sudan and
Tunisia), introduction of greater flexibility in exchange rates and a move toward the use
of indirect monetary policy instruments. (Abed and Davoodi, 2003)
Arab countries are socially and culturally similar. Therefore, it represents one social
environment because their social environment is a combination of a society's beliefs,
practices, customs, and behaviors. The social and cultural environment of the Arab
World affects international business operating in any of the twenty-two countries.
Overcoming cultural differences in global business entails dealing with social and
behavioral factors. Many factors may play a role in shaping the social and cultural
environment surrounding companies that are conducting business in Arab countries.
First of all are the human factors such as, issues in social stratification, religion,
relationship preferences, collectivism versus individualism, risk taking behavior, work
motivation and communication.
In Arab countries there is increasing social demand on education but at the same time
there is a high level of unemployment which reflects the weakness of education
outcomes. In the same line Wikens (2011) said ''The challenge facing the higher
education sector in the Arab world is that, even as it has expanded in recent years to try
to accommodate a historically large youth contingent, it has not kept pace with the
shifting demand for human capital. Governments have “educated” a growing cohort of
students without ensuring that they have the skills needed to succeed and without laying
the economic groundwork to employ them. As a result, many countries in the region are

19
suffering from a chronic oversupply of workers with the skills sought by employers in
the marketplace. University graduates, while experiencing a shortage of workers with
the skills sought by employers in the marketplace".
1.2.4 Accounting system in Arab countries
After clarifying the identity of Arab countries and its business, economic and social
environment, the following part tries to explain the accounting system in these countries
in the light of the above environment. Therefore, this section presents a literature review
of accounting system in Arab countries through discussing the final results of the
previous studies about:
- Financial reports in Arab countries
- Management accounting system in Arab countries
- Public accounting system in Arab countries
- The state of accounting profession in Arab countries
Financial reports in Arab countries: In most Arab countries data availability and data
accessibility are limited. Additionally there is a long period of delay between the year-
end data and the financial statements and the date of their release to the public. Also the
differences in accounting methods used to prepare financial statements may represent a
major problem in comparing the financial statements of different companies in different
Arab countries. Differences in treatment for some of the items that are reported in the
financial statements may have a negative impact on profit and certain ratios and thus
impair the ability of a local company to compete for capital. Different accounting rules
produce incomparable results. Comparable financial statements would bring benefits to
local and foreign companies also enable stack market participants to understand the
strengths and weaknesses of relative profitability, liquidity and financial power of one's
company face to face with its foreign competitors. (Zoubi and Al-Kazali, 2004)
In their study about: Adopting US – GAAP or IASB accounting standards by the Arab
countries, Zoubi and Al-Kazali (2004), present the following results for each Arab
country:
- Algeria: The country does not set out the accounting treatment for many important
transactions. Observance of existing standards is not effectively enforced.
- Bahrain: Companies in Bahrain are required to prepare financial statements in
accordance with the IAS.

20
- Comoros: No specific financial accounting and reporting standards have been adopted.
- Djibouti: No specific financial accounting and reporting standards have been adopted.
- Egypt: Egyptian requirements are based on the Companies Law and the Capital
Market Law, on Egyptian Accounting Standards of the Ministry of Finance, and on
regulations of the Central Bank. There is also a formal reference in the law to the use of
IAS when there are no Egyptian requirements. Egyptian Accounting Standards (EAS)
have been prepared to comply with the IAS.
- Iraq: No specific financial accounting and reporting standards have been adopted. - -
Jordan: Banks must adopt the accounting standards issued by the International
Accounting Standards Board.
- Kuwait: All accounting and reporting for corporate entities are subject to IAS. The
IAS also governs the disclosure rules.
- Lebanon: Lebanon has established accounting and financial obligations by means of
decrees. Annual financial reports must be realized in accordance with the current
standard. The annual financial reports must include: a balance sheet, a profit and loss
account, a cash flow statement.
- Libya: No specific financial accounting and reporting standards have been adopted. -
Mauritania: The Mauritania Accounting and Auditing Standards Committee (MAASC)
develop accounting standards and guidelines locally. IASs are used as a guide.
- Morocco: Moroccan requirements are based on Law No. 9-88 and on the standards
and regulations of the Ministry of Finance and the National Accounting Standards
Board. IASs are used as a guide.
- Oman: IASs are mandatory in Oman. All companies are required to prepare financial
statements in accordance with IAS.
- Palestine: Banks in Palestine follow the IAS. Companies are encouraged to adopt the
International accounting standards.
- Qatar: Financial statements and disclosures of corporate entities in Qatar should
follow the International Accounting Standards Board.
- Saudi Arabia: Saudi requirements are based on governmental Regulations for
Companies and on accounting standards issued by the Saudi Organization of Certified
Public Accountants (SOCPA). A limited number of accounting standards were issued

21
by SOCPA. SOCPA stipulates that US- GAAP should be adopted for those issues not
covered by the SOCPA Standards.
- Somalia: No specific financial accounting and reporting standards have been adopted.
Companies should ensure that their accounts are produced in accordance with IAS.
- Sudan: No specific financial accounting and reporting standards have been adopted.
Each bank must develop its system for keeping records and files related to domestic or
foreign operations in such a manner as to facilitate presenting them to the concerned
authorities when asked to do so.
- Syria: Syria has established its own accounting rules and regulations, which may not
be in compliance with the IAS.
- Tunisia: Tunisian requirements are based on the Law of 30 December 1996 and on
Standards issued by the National Accounting Council. Tunisian accounting may differ
from that required by IAS because of the absence of specific Tunisian rules on
recognition and measurement in many areas such as accounting for employee benefit
obligations, deferred tax, and accounting for an issuer's financial instruments.
- United Arab Emirates: All banks, financial and investment companies have to prepare
their financial results in accordance with the IAS
- Yemen: Yemen's banks have to present their financial statements according to IAS,
thereby considerably improving the transparency of the sector.
The results of this study show that companies in the Arab world use different
accounting rules and regulations for measurement, recognition, and disclosures of
financial position and results of operation. Consequently, comparability of the financial
results of different companies in different countries in the Arab world is impaired. This
will have negative impact on foreign investments, foreign listing, and security markets.
To resolve the issue of comparability and provide more reliable, accurate, and valid
financial accounting information, Arab countries collectively should adopt the
international accounting standard IAS.
Management accounting system in Arab countries: As a subset of management control
systems, management accounting systems specifically include a package of planning
systems, cybernetic controls, administrative controls, and rewards and compensation.
Such a system should incorporate vision and mission, key success factors, strategy and
plans, organizational structure, key performance measures, performance targets,

22
performance evaluation at individual, group, and organizational levels, financial and
non-financial rewards and penalties for missed performance targets (Lee, et.al, 2013).
Dik (2011) in his research, Arab management accounting systems, under the influence
of their culture examined management accounting practices in Arab countries through
the investigations of many Arab companies, the empirical results collected from this
research are:
- In almost all of the studied Arab companies there was no separate department
for management accounting. Management accounting in Arab companies is
integrated with financial accounting. Hence, the finance department performs
financial accounting tasks in addition to those in management accounting such
as budgeting, reporting, variance analyses, and performance measurement in
order to help the management.
- The collected data vary among the Arab companies, depending on countries,
type, size. Although the Arab countries are considered as one unit with Arab
culture and language, these countries are heterogeneous in their level of
development and market conditions. This means the role and function of
management accounting and the use of instruments and performance
measurement differ from country to country.
- Arab companies rely more on monthly and annual reports. The finance
departments in Arab companies are responsible for financial accounting and in
terms of management accounting, for producing required information for
decision making and management control.
- Arab companies follow short-term budgeting and planning, except large
manufacturing companies or banks, which follow long-term budgeting and
planning.
- The Arab companies uses more traditional instruments in management
accounting, including performance evaluation, and some of those companies use
more modern techniques such as, Activities Based Costing (ABC) or Balanced
Score Card (BSC).
Public accounting system in Arab countries: Governments in the Arab world are
still using the traditional government accounting system (which is cash-based
system) and traditional budgeting system (line item budget – input-based budget

23
system). Those systems are no longer able to provide the information which is
required by an efficient and effective government. Most of the countries do not use
the new management tools, and the more informative accounting systems. The
reason is that they are convinced that the new tools and the more informative
accounting systems are appropriate for business organization, which aims at making
profit. And this is not the aim of the public sector, which aims at serving the public
interest. (Ouda, 2003)
Abushamsieh et.al (2013) in their study: The development of public accounting
transparency in selected Arab countries. They examined the situation of public
accounting system and analyzed the level of public financial information disclosed
by certain Arab countries in the Middle East. They examined the financial reports
published online and contrasting them with the financial statement and contents
proposed in the International Public Sector Accounting Standards (IPSAS) issued by
the International Federation of Accountants. They provide the following points:
- Most Arab countries do not use the new management tools and more
informative accounting system, because they are convinced that the new tools
and the more informative accounting system are appropriate for business
organization, which aims at making profit and this is not the aim of the public
sector, which aims at serving the public interest.
- In spite of administrative reforms made regarding in financial laws that have
been made in recent decades, there is still a low level of development in the
financial information presented for all countries studied.
- Arab countries present similar degrees of transparency and compliance with
IPSAS. Therefore no significant differences were observed, because aid-
receiving countries are implementing the policies stipulated in the international
recommendations in response to the demands of donors and international
agencies. While the countries with oil revenues experience less pressure to
implement the IPSAS.
- In all Arab countries there is a need to progress further in the presentation of
financial information as current level are far below international standards,
possibly due the very different social, cultural and political context.

24
Accounting profession in Arab countries: According to Gray (1988) professionalism is
a preference by accountants to exercise individual professional judgment in undertaking
accounting tasks. It entails the maintenance of professional self-regulation. This stands
in contrast with statutory control - the imposition of force on accountants to comply
with prescriptive legal requirements with the backing of legal sanctions for non-
compliance.
Almost all developing countries which have British colonies for considerable length of
time have inherited the accounting education from the British system. During the early
years of the colonial period, most of sizable businesses in these countries had been set
up by British investors and the managerial personnel, including accountants for these
enterprises were brought from UK. Since a person at that time could obtain the status of
professional accountant only by admission to one of the British professional accounting
bodies, a small number of local people who could bear the costs of education and
training abroad proceeded to England to obtain such professional status. Subsequently
some of the British accounting bodies setup their examination center in a few major
cities of some developing countries to allow local people to obtain British professional
accounting qualifications. Unfortunately in most developing economies (Arab countries
are not exception) accounting is still not viewed as a tool for such management purpose
as realistic comparison evaluation, and decision making. Its primary objective is still the
accumulation of (historical) data for financial statement and auditing purposes.
Although this is necessary and valuable function, it is not wholly satisfactory for the
essential development programming in these economies. (Wijewardena and Yaba,
1998)
Kayed (1990) in his thesis Accounting regulation in Egypt in relation to western
influence, cited Kohler's definition of accounting profession (1983) , in his evaluation
to accounting profession in Egypt. The definition describes a profession as a vocation:
a. generally recognized by universities and colleges as requiring special training
leading to a degree distinct from the usual degrees in arts and sciences.
b. requiring principally mental rather than manual or artistic labor and skill for its
successful prosecution.
c. recognizing the obligations of public service and the public interest.
d. having a code of ethics generally accepted as binding upon its members.

25
 Kayed stated, According to definition of profession there has to be:
1. Recognition by universities and colleges: the fact that accounting education in
Egypt is much too narrow for a qualified accountant and is based upon the
instruction materials of the US/UK systems, suggests that accounting as a
profession may receive little support from education, for accounting education in
the UK/US is only one part of professional education.
2. Mental rather than manual or artistic labor: it is very nature of accounting skills
that the chartered accountants in Egypt use mental ability rather than manual
skills in their work. However, evidence suggests that they undertake their
professional work in a static and routine manner rather than a dynamic and
creative manner, though a few endeavor to follow new developments and
contribute to such developments; write, articles, read new publications, and
provide scholarly leadership to their staff.
3. Recognition of the obligation of public service and public interest: The Egyptian
accounting profession does not yet have a complete code of professional ethics,
except for the Charter of 1958,
4. A code of ethics: chartered accountants in Egypt have no defined or formal
principles to work on; different auditors apply different accounting practices and
auditing guidelines and there is no theoretical foundation for the accounting
profession in Egypt.
5. A theoretical basis in some department of scientific learning: to be a profession
there has to be an organization to protect the rights of the members. Egypt has
had an Accounting Board since 1986.
Not far from the above, Helles (1992) characterizes the accounting profession in
Jordan by the following points:
a. The fact that accounting education in Jordan is highly American and British
orientated suggests that accounting as a profession may receive little support
from education, for accounting education in the USA and UK is only part of
the professional education. Also professional institutions do not exist in
Jordan and hence the support by universities and colleges for the accounting
profession is at best incomplete.

26
 b. The accounting profession in Jordan is still in its infancy and is not
sufficiently developed to be able to undertake the setting of national
accounting standards. The government, too, is unlikely or unwilling to take
the responsibility for setting accounting standards.
c. The 1989 companies Act has had an adverse effect on the profession because
it has limited it and narrowed its scope, placing too many duties and
responsibilities on the auditor's shoulder. Moreover, neither law provided a
protection for auditor.
d. In Jordan there is no formal code of ethics except what is mentioned in the
auditing profession law 1985, or in company's law 1989.
In Sudan the status of profession is not better than the above. Lodu (1997) demonstrated
that “Accounting as a recognized discipline is relatively young and the profession has
yet to secure its role in the regulation accounting practice. The Accounting profession in
Sudan has very limited control on current accounting practice. The professional
standards of the native body are yet to be issued, and there is shortage of qualified
accountants to do the job. Sudan Council for Certified Accountants (SCCA) members
are not active in research and also do not devote full time efforts to the council’s affairs
i.e. the council does not have full time members to run its affairs”. Along the same line,
Abdalla (2014) states the profession in the Sudan is still very much in its infancy. The
Sudan has established the institute for accounting studies relatively so late in 1989, as
well as its own accounting, unfortunately they are not yet able to adequately meet the
country's demand. The profession could not cope with the universal challenges under
the shadow of globalization.
Depending on the above we can conclude that the accounting profession in Arab
countries is still in its infancy because the professional organizations and the authority
are in the hands of the governments and as a result the society has no authority to play a
supervisory role in the profession. As Askary (2006) said" the developing countries
have a tendency toward statutory control" and he rates Arab countries in high level of
authority control and low level of professionalism.
1.3. Impact of international harmonization of accounting
As it was clarified in the previous section (1.2), there are a lot of factors causing the
differences in accounting systems and practices around the world, because accounting is

27
a product that reflects characteristics of its environment. In other words, different
country groups practicing different accounting systems have distinctive and unique
patterns, depending on a lot of factors such as, history and culture. These differences in
accounting systems lead to significant complications for those who prepare, audit,
publish and even the user of financial reporting. Therefore many organizations
throughout the world resist these differences, more over they are involved in the attempt
to harmonize or standardize accounting. In this context Beke (2010) argued that the
purpose of the use of international accounting systems is that similar accounting
transactions should be treated the same by companies around the world, which resulting
in globally comparable financial statements. However, using the unified accounting
information system consistently by firms we will find that they are changeable, because
they depend on the varying economic, political, and cultural conditions in one state.
Accountants, auditors and information scientists around the globe are planning to
harmonize accounting information systems with the goal of creating one set of high-
quality accounting rules to be applied around the world.
Different authors have defined accounting harmonization in different ways, according to
Nobes and Parker (2008), harmonization is a process of increasing the compatibility of
accounting practices by setting bounds to their degree of variation. 'Harmony' is the
state where compatibility has been achieved. 'Standardization' appears to imply working
towards a more rigid and narrow set of rules. However, within accounting, the words
have almost become technical terms, and one cannot rely upon the normal differences in
their meanings. ‘Harmonization’ is a word that tends to be associated with the
transnational legislation emanating from the European Union; ‘standardization’ is often
associated with the International Accounting Standards Board. Similar view of
harmonization is proposed by Lakmal (2014) Harmonization is a process of increasing
the compatibility of accounting practices by setting limits on how much they can vary.
Harmonized standards are free of logical conflict, and should improve the comparability
of financial information from different countries. Therefore, the term harmonization
have been used to describe efforts to reduce differences in accounting practices in order
to achieve a common set of it, to move towards a global accounting practices.
Not far from that Herbert (1981) argued that there are basically two different types of
international organizations working to harmonize accounting standards. First, there are

28
the bodies organized by governments such as, the United Nation (UN), the Organization
for Economic Cooperation and development (OECD), and the European Economic
Community (EEC). Second there are the International organizations set up by
independent professional bodies, such as, the International federation of accountants
(IFA), and the International Accounting Standards Committee (IASC) which has
undertaken an even bigger task in the harmonization of accounting standards on a
worldwide basis. The IASC was formed in 1973 by the leading accounting bodies of ten
countries, Australia, Canada, France, Germany, Japan, Mexico, the Netherlands, the
UK, Ireland, and the US.
In 2001 the International Accounting Standards Board (IASB) was formed to replace
the (IASC). The (IASB) is an independent private sector body that develops and
approves International Financial Reporting Standards (IFRS), meaning the (IASB) has
complete responsibility of all technical matters of the IFRS. Therefore, since 2001 all
new standards have been called IFRS.
1.4. Reasons and obstacles for harmonization
Around the world there are a lot of options of accounting practices existed and practiced
at the same time. These options are working against the harmonization of accounting
practices. The reducing of these options through achieving harmonization can
facilitates the process of analysis and comparison of the financial statements for
different companies in different countries around the world. Therefore the accounting
information will become more reliable and useful for the allocating scarce resources in
economics in optimal method, and also for increasing the rationality of all economic
decision for all the users of accounting information.
According to Shil et.al (2009) the adoption of different accounting standards causes
difficulties in making relative evaluation of performance of companies. This
phenomenon hinders the valuation and consequently the decision making process. Also
they state that harmonization of accounting standards will help the world economy
through the following ways:
- Facilitating international transactions and minimizing exchange costs by
providing increasingly perfect information;
- Standardizing information to worldwide economic policy makers;

29
 - Improving financial markets information; and improving government
accountability.
Meaning the harmonization of accounting practices would assist in the provision equal
opportunities in the world because the regulators and auditors will receive the same
information. Also harmonization can assist in facilitating the accounting transaction and
comparing process, as a result, investors and managers will be able to make more
valuable decisions.
A similar view is proposed by Nobes and Parker (2008) they discussed the reasons of
harmonization of accounting practices through clarifying the needs of different groups,
as in following:
- Investors and financial analysts need to be able to understand the financial
statement of foreign companies and they would like to be sure that the
statements from different companies are reliable and comparable, they also need
confidence in the soundness of the auditing. All these possible under the
harmonization of accounting practices.
- The companies that wish to issue new shares more widely than on their domestic
markets will see the advantages of harmonization practices in the promotion of
their issues. The advantages of harmonization of accounting practices for the
multinational companies are more important, because the great effort of
financial accountants to proper financial statements would be much simplified if
the statements from all around the world were prepared on the same basis. Also
it is easier to transfer accounting staff from one country to another.
We can conclude that the harmonization of accounting practice is an urgent need for all
those residents in the business society such as, regulators, preparers and users of
accounting information. They have great need to a common language that should be
spoken by all of them around the world.
It is commonly believed, that many factors have influenced the accounting practices in
each country. If these factors play an important role in accounting practices, this could
cause harmonization to be considerably difficult. The difficulty of harmonization in
accounting practices can be in several aspects such as, the difficulty of integration of the
objectives from accounting reports in all different countries, the tendency to the local
standards in the receiving countries or in other words the nationalism and the lack of

30
efficiency of accountants to deal with one practice accounting for all the world. (Nobes
and Parker, 2008)
Along the same line, Shil et al (2009) stated accounting standards have been developed
in different countries under different legal, economic, social, cultural environments and
different objectives, so it is necessary to arrive to an agreement to central objectives of
financial reporting because a different philosophy of financial reporting will lead to
difficulty to harmonize with international financial reporting standards (IFRS). Also
there are challenges for countries adopting IFRS such as, the shortage of manpower and
more particularly and the IFRS trained manpower.
Nobes and Parker (2008) also suggested that the companies should follow two sets of
rules, one for domestic, and another for international consumption, or one for parent
statement and another for consolidated. This suggestion comes from their view that
there are many obstacles to harmonization of accounting such as, the large size of the
present differences between the accounting practices of different countries, the lack of
an international regulatory agency such as European Union, and the nationalism which
may reveal itself in unwillingness to accept compromises that involve changing
accounting practices.
Also there are fundamental obstacles that cannot be overcome without major changes in
culture, attitude and law. Moreover, even if these obstacles have been overcome there is
no any guarantee that the implementation of the standards will be in the same amount of
seriousness in every specialization.

31
 CHAPTER TWO
BASIC CHARACTERISTICS OF THE FINANCIAL REPORTING
IN SUDAN
The previous chapter highlighted the literature concerning the accounting systems in
developing countries with high emphasis on accounting systems in Arab countries. This
chapter continues with the same general theme, while seeking to be more specific. The
chapter will present an overview of the basic characteristics of financial reporting in the
Sudan (as one of Arab developing countries), the structure of the chapter will be as
follows: the first part is an introduction and the second part provides a historical
background about the Sudan. The third part discusses the impact of historical and
environmental factors on the financial reporting in the Sudan and the fourth part
considers issue of the legal and regulatory framework of accounting practice in the
Sudan, focusing on the different Acts and their shortcomings. While the fifth part
investigates the accounting profession in the Sudan and in the sixth part the discussion
moves to accounting education in the Sudan. Finally the seventh part outlines some
features of the financial reports in Sudan.
2.1. Historical background about Sudan
The Sudan is in Northern Africa. It is third largest country in Africa. The river Nile
divides the country into eastern and western halves. Its predominant religion is Islam.
Its capital is Khartoum. The total area of Sudan is about 1,886.068 square kilometer,
and the population 37.289.000 (IMF2015). Arabic is the most widely spoken language
in the country. Agriculture is the main economic source. Its contribution was more than
49.8% in the GDP before the extraction of oil in 1999, then it became declining to be
30.6%, 30.8%, 31.2% and 28.4% for the years 2008, 2009, 2010 and 2011 respectively.
(www.cbos.gov.sd )
Historically the Sudan was on Ottoman force in 1821, this government was known as
TURKIYAH or Turkish regime, in 1881 there was a nationalist revolt which was known
as the MAHADIA. In 1898 the Anglo- Egyptian army led by Lord Kitchener defeated
the MAHDIST forces at Omdurman. This paved the way for the Anglo-Egyptian
Agreement of 1899 known as the Condominium Agreement which laid the foundations
of new political regime in the Sudan, this system was nominally Anglo-Egyptian but

32
effectively the Sudan came under British colonial administration. (Gwillian and El-
Nafabi, 2002)
From 1898 the United Kingdom administered all of Sudan as the Anglo- Egyptian
Sudan, but northern and southern were administered as separate provinces. The British
government recognized the independence of the Sudan on 1956 (the British colonial
administration continued for fifty-seven years). Since its independence the history of
Sudan has suffered from a lot of internal conflict; first Sudanese civil war (1955- 1972),
second Sudanese civil war (1983-2005) culminating in the secession of South Sudan on
July 2011. In addition to Darfur conflict in western Sudan (2003-2010). These
complicated periods of Sudan history surely have its impact on the economic
development and of course the accounting system and financial reporting practices in
the country.
The Sudan economy was dominated by oil revenues till the secession of South Sudan on
July 2011. Sudan's non-oil economic sectors are agriculture, mining, and livestock, the
latter being basic to the stability in the rural areas, services make up close to 43 percent
of GDP. (UN, 2012)
According to the report of the IMF (2014)" Sudan is a fragile state mired in a heavy
debt burden, international sanctions, and volatile domestic and regional political
environments. These problems, together with limited revenue mobilization, are
constraining Sudan’s growth prospects and poverty reduction efforts. The economic
situation worsened following the secession of South Sudan in 2011, resulting in the
buildup of large economic imbalances". The rate of growth in GDP during the years
2008, 2009, 2010 and 2011, is 6.4%, 5.9%, 5.2%, and 1.9%.
Regarding the historical evolution of accounting in the Sudan, it is difficult to write any
history that can explain how accounting was started and developed because very few
authors wrote about this issue. As Abu-Algasim (1992) stated" very few accounting
researches were undertaken in the Sudan in which only small space was devoted to the
historical evolution of accounting". He explained that in general by saying, there is
almost a consensus among all researchers who touched on the historical evolution issues
that accounting in the Sudan had emerged in the early years of the twentieth century,
during the Anglo-Egyptian colonization of the Sudan (1898- 1956) following the
establishment of some big economic projects (e.g. Port Sudan’s sea port, the Rail

33
Roads, and the Gezera’s scheme). Before that date, it is believed that there were no
economic activities of any type that could necessitate the need for Accounting. Along
the same line, Lodu (1997) stated that “Accounting in the Sudan started earlier before
even the Mahadist state but the practice of accounting that we have at present began
during the colonial administration (1898- 1955) as a result of organized economic and
trade activities in Sudan”
2.2. Impact of historical and environmental factors on financial reporting in Sudan
Accounting is not only methodologies, numbers, and financial statement that hold the
basic rules and standards to maintain the profession's purpose, but also shaped by a
variety of historical and environmental factors. Therefore accounting practices reflect
the history and culture in which it is performed. The importance of historical and
environmental factors in shaping the accounting system of a particular country has been
emphasized in the literature. The historical, environmental, cultural, political, legal and
economic conditions of a country should be the main determinants of its accounting
system and particularly financial reporting practice.
The financial reports in every country should provide information suitable to the needs
of economic development, but in most developing countries financial reports provide
information and few tend to reflect local needs and circumstances. Therefore accounting
in developing countries does not play the same role it plays in the advanced world
because it does not participate in the economic development process and its failure in
providing the information needed for economic decision making.
The Sudan is not exception from those developing countries and has the following
feature:
- large foreign debt
- rapid population growth
- high levels of unemployment
- high rates of consumption
- poverty and insufficient domestic savings
All these features and others have its impact on accounting and financial reporting in
Sudan. The following section clarifies the impact of the historical and environmental
factors on the financial reports in the Sudan:

34
2.2.1 The impact of colonization
The Sudan was one of the British colonies. The British influence on its accounting
profession is very long standing. The Sudanese accounting profession has substantially
retained the British's Statements of Standard Accounting Practice (BSSAPs),
regulations, format, wording, and items classification, without any concern as to
whether they meet the local users’ needs or level of understanding. (Abu-Agaism 1992)
The colonial power as one of the historical factors that influences accounting practices
in Sudan has had a long standing. The direct influence of the British rule and British
professional bodies, several other sub-factors have contributed to the use of U.K
accounting concepts in the Sudan through the multinational companies. As it was
explained in (1.1.2) this way of transferring accounting from developed to developing
countries have an essential impact in Sudanese financial reporting because most of
major multinational companies have been U.K based. The multinational companies
have adopted the accounting systems of the home country for their subsidiaries in the
Sudan and have trained local staff in those systems. Moreover, the scholarships for local
students and grants of text books were major contributory sub-factors.
The historical impact of colonial power does not stop only in accounting education, but
it was extended to affect the main legislation governing the financial reports in Sudan,
namely, the 1925 Act. This is the copy of the British companies' law, which results to
large extent in the lack of local accounting standards and the shortage of accounting
practices that are suitable to Sudanese economic and cultural environment.
2.2.2 The impact of cultural factors
In the Sudan the welfare of the clan (extended family) is perhaps the single most
important factor governing the actions of individuals. In Sudanese culture, neglect of
one's family calls for a high level of public condemnation and opprobrium. In contrast,
considerations of public accountability and of matters relating to wider aspects of
society and cultural and economic development are perceived as much less important
(Al-Terahfi, 1986). This view classifies Sudan as a collectivist society, with a large
power distance. Therefore, in terms of social orientation, there are a lot of differences
between Sudan and western societies, because Sudanese culture emphasizes
interdependence, relatedness, and connection, while western cultures tend to value
independence, individualism, autonomy, and self-achievement. And of course these

35
differences have the dynamic impact in the accounting system, as it was said by Askary
(2006)"culture in different societies can strongly impact national accounting systems".
Abbas (2012) argued cultural factors that have limited the usage of, and the demand for
accounting information including; high degree of secrecy in business, disbelief in public
companies and mistrust between business enterprises and tax authorities. High degree of
secrecy is due to the fact that many businesses are family owned and managed, which
restricted disclosure of information to those who are closely involved, namely, owners
and management.
Other socio-cultural factors that limit the growth of business in the Sudan are the high
rates of consumption, preference of owning the tangible wealth specially the precious
metal, such as, gold, and property. And risk avoidance, which leads to the tendency for
liquid and near liquid assets, and less risky nonproductive activities. These socio-
cultural factors have reduced the usage of accounting information and the investment in
financial assets, and as a result hampered the development of financial sectors. This was
confirmed also by Hamza (1997) "the socio-cultural influences are fundamental
constraints that determined the external usage of accounting information in Sudan"
Based on these findings the Sudanese society is characterized by:
- Low individualism because of collective force of the extended family.
- High secrecy level of financial information as a result of the family business.
- Large power distance and strong uncertainty avoidance.
Therefore, a fundamental shift in attitudes of Sudanese business people and
accountants is required to change from secrecy to transparency in order to enhance the
corporate performance and financial reporting practice.
2.2.3 The impact of political factors
After gaining independence Sudan has been ruled by six political regimes: three were
democratic and three military. The military regimes account for 49 years of 60 years by
January 2016. The common features shared by these six regimes have been the frequent
change of government personnel and in particular a high turnover of government
ministers. This situation has a harmful effect on investment environment and the
development of accounting practices in the country. Not far from that argued Gwilliam
and El-Nafabi (2002) “the difficulties posed by lack of continuity in personnel have
been exacerbated by the lack of clear definitions of the role and responsibilities of

36
individual ministries, ambiguity and uncertainty as to manifestos and policies, and the
difficulties of implementing agreed policies and procedures”.
Also the Sudan suffers from two civil wars between its Northern and southern parts for
50 years. First war started in 1955 (one year before independence) up to 1972 the Addis
Ababa agreement which put the country in peace for ten years. The second war from
1983 up to 2005, when a peace Accord was signed by conflicting parties, which leads to
the secession of southern part in 2011. Moreover there is Darfor's conflict in the western
part of the country. As a result of these wars the military expenditure forms the major
part of government spending and very limited resources are directed to the basic
infrastructure and productive activities.
Externally the wars have their consequences upon Sudan, in this side Abbas (2012)
clarified that the external financing environment faced by Sudan reflects the financial
isolation which the country suffers. The early years of the nineties witnessed the
deterioration of political relation with the west and a number of Arab and African
countries. This has a severe negative impact on official foreign flows which decreased
substantially till it stopped completely during the last fifteen years. And as a result, it
has limited government spending on infrastructure and development projects which are
essential prerequisites for sound investment environment. Thus the political conditions
in Sudan assume a major responsibility for causing investment environment to be
daunting and discouraging.
2.2.4 The impact of economic factors
The long years of military controlling the country have their strong impact on the
Sudanese economy, it seems clear in: unwise economic planning and the domination of
the public sector overall economic activities. This created a very weak private sector
and stopped the development of the concept of financial transparency. In the first years
of nineteen nineties the Sudanese government has started economic and financial
programs aiming to orient the economy to market-based mechanisms. Reforms come to
encourage foreign investments, and private ownership through privatizing state-owned
companies and setting stable rules and regulation to reduce the uncertainty in public
policies.
These reform programs should have positive impact in creating sound investment
environment through the stabilization of the exchange rates and lowering the inflation.

37
Unfortunately, all these programs do not achieved what is expected because of
misapplication of the privatization policy. In this context Abbas (2012) evaluated that
policy by saying “the privatization policy adopted as part of macroeconomic reform
programs does not seem to impact favorably on the investment environment. In addition
to its principle objective of improving enterprise performance, privatization was
expected to increase the supply of equity for domestic and foreign investors. This
however was not the case in Sudan; as the different methods adopted for privatizing
state owned companies in Sudan did not include share offerings”. As a result of that
Abbas clarified a lot of governmental units had been sold at low prices to private
companies and individuals. And surprisingly, while public sector corporations were
being sold to private sector, the government was establishing new ones. This clearly
defeats the objective of moving the public sector out of productive activities.
The other difficulty that the Sudan economy faced was the July 2011 secession of South
Sudan, this part of the country was responsible for three-quarters of total oil production.
The oil sector had driven much of Sudan's GDP growth since it began exporting oil in
1999.
Following the South secession, the Sudan has struggled to maintain economic stability,
because oil earnings now provide a far lower share of the country's need for hard
currency and for budget revenues. Sudan is attempting to generate new sources of
revenues such as gold mining, while carrying out an austerity program to reduce
expenditures.
Other factor that harmed the development of investment environment in Sudan is the
narrowness of structure of enterprise ownership. Most businesses in Sudan are family
owned and managed. This has limited the size and elaboration of business enterprises
and as a result the need for financial information. Although this factor was clarified as
socio-culture factor, it also has strong impact in the economic environment.
Generally the economic environment in Sudan is characterized by: high exchange rates,
inflation, high external debt and unstable relations with international financial
institutions. Unstable public policy and narrowness of the structure of enterprise
ownership has discouraged the private investment and negatively affected the financial
reporting system by limiting the information available.

38
2.2.5 The impact of financial sector
The features of financial sector have its impact in shaping the financial reporting system
and determining the quality of reported financial information in a country. According to
Abbas (2012) “the general prescription for an appropriate financial system includes:
well-capitalized, proper functioning strongly regulated and supervised financial
institutions and clear and enforceable financial policies”. Evaluating of the financial
system in the Sudan in terms of these features discovers its inadequacy and weakness.
Sudan has a relatively small financial sector relative to its regional peers: a total of 75
financial institutions. These include the central bank and 38 commercial and specialized
banks, around 15 insurance and reinsurance companies, 20 foreign exchange bureaus
and one stock exchange.
The banking sector is the corner stone of Sudan's financial system and it the primary
source of financing for domestic economy, almost financing for productive activities
comes from commercial banks, the financing through the stock exchange is humble.
However, the banking sector does not seem to succeed in providing neither the type of
funding needed nor the quantities required for growth and expansion of corporate
sector. Therefore, the weakness and inadequacy of financial sector in Sudan come from
this point, that the commercial banks tend to concentrate on short-term lending because
these banks are not able to meet the growing demand for medium and long-term credit
required for economic development. This is mainly due to the structure of commercial
banks deposits, which are of short-term nature, because high rates of inflation make the
majority of investment tend to favor short-term financing (the banks are not exception).
According to Ali (2010), Khartoum Stock Exchange (KSE), started its operations in
1995 with 34 companies which had satisfied the requirements of listing in KSE. In the
end of the year 2010, the number of listed companies was 52 companies out of not less
than 285 public companies registered in the Sudan. Most of the remaining public
companies are in a very unsatisfactory state, most of them not holding annual meetings
for years which also indicates that no proper financial reports were prepared and
audited. Judging the KSE basing on the above, in terms of growth it reveals limited
development. The evidence can be taken from the number of listed companies, from its
establishment till the end of year 2010, which became 52 companies, meaning in fifteen

39
years' time the market has attracted only 18 companies, this indicates clearly the slow
stock market development.
Abbas (2012) also evaluates the KSE when he stated, KSE is still a very limited and
underdeveloped capital market: in terms of all measures of stock market development,
KSE seems to lag far behind regional markets and least developed markets monitored
by the International Finance Corporation (IFC). The market capitalization ratio
averaged 4.6% over the period 1995- 2010 which is well below the average market
capitalization ratio for regional emerging markets which is 7.5% over the same period.
The KSE has a very low total value; traded ratio over that period is 0.7% which is
below the standards of IFC emerging markets 2.3%. This reflects the very limited
trading of equities when compared to the size of economy and informs about the
illiquidity of the market. The turnover ratio also indicates the limited volume of trading
in KSE when compared to the value shares listed: it average 5.3% which is just equal to
the regional averages 5.2%. This limited trading relative to the size of KSE is due to the
fact that out of the 52 listed companies shares of only 25 companies do actually trade
with the rest of companies never trading. Moreover, of the 25 companies only 12
companies trade frequently and the other 13 seldom trade. Thus the number of
companies never or seldom trade represents 77% of listed companies (41 companies out
of 52).
Measuring KSE in terms of degree of concentration also indicates its very limited
development and growth. The largest companies accounted for almost 93% of the
market over the period under study, indicating a narrow and shallow market. Judging
KSE in terms of its principal objective of savings accumulation and capital mobilization
reveals the fact that the market has not yet began to play its role as a means for capital
mobilization. Capital Mobilization Ratio which is the ratio of capital raised through the
stock exchange to total fixed capital formation is very low. This indicates that KSE
contribution to country's stock of capital goods is minor. The ratio of new to total
shareholders' equity averages 10% for the period under study. However, having in mind
that 85% of new issues came from only one company and the remainder came from 14
companies out of the 52 listed companies. It can be inferred that KSE primary market is
very limited and undeveloped.

40
Another feature that can affect the KSE is the inability of financial reporting in
satisfying the users' need which limits the KSE role in capital mobilization. Motwali
(2005) indicated that a lack of transparency has been one of the significant reasons
which led to the weakness of Khartoum Stock Exchange efficiency. That weakness
resulting from the financial reports and statements which has been prepared by each
company whose shares were actively traded in Khartoum stock exchange, these reports
and statements were annual and they have included only income statement and balance
sheet. Additionally, they have not been provided in the right time, this factor has
contributed to the delay of communicating the information to the investors in order to
enable them to make investment decision, and such information could not meet their
needs. Furthermore, these statements have suffered from a lack of relevance and
credibility of accounting information what leads to improve the investors' ability on
decision-making and their ability on predicting the potential result. Moreover, each
company in Khartoum Stock Exchange does not disclose the accounting information
which enables the investors to assess the degree of risk surrounds their decision-making.
These negative features of the financial sector in Sudan in addition to the instable,
vague, contradictory financial policies have restricted the need for and the usage of
financial information and hindered the development of financial reporting system in the
Sudan.
In addition to these factors that have a significant impact on financial reports in the
Sudan, there are other factors that have the impact such as legal system, accounting
education, and accounting profession, which will be dealt with in other parts of this
research.
2.3. The legal and regulatory framework of accounting practice in Sudan
The first step of regulation of accounting practices can be done through the setting of
accounting and auditing standards. The importance of this step stems from being the
main instrument to reduce the degree of freedom in accounting behavior, and it serves
as guideline for preparing and understanding financial statement, and it will resolve
accounting controversies.
In regards of, who regulates accounting practice in Sudan? Ahmed (1996) stated that
“there is no one or single group that is responsible for the regulation of accounting
practice in the country. Accounting practice is regulated and organized by the

41
contribution of different bodies' interferences. Each group has its own objective and
practice, the most effective groups are: Auditors, Certified Accountants, Taxation
Chamber, Central Bank, Academicians, Experts, and Financial Analysts”.
This way of regulation by a lot of supervisory bodies is not the ideal way, because these
bodies have their own interest and goals. Therefore, this situation may lead to conflicts
among each other. In the same context, Ahmed (1996) concluded “this way of
regulation and existence of many regulatory bodies is not a proper and efficient one.
Because these groups are contradicting one another, as they have their own interests,
objectives, policies and qualifications”.
In general, certain professional organizations, government's agencies, and legislative
acts have been regulated accounting practices in the Sudan. In the following section, the
various laws and other factors that regulate accounting practices in the Sudan are
discussed.
2.3.1 The companies Act of 1925
Accounting practices in the Sudan are regulated mainly by the companies Act 1925,
which was shaped in the light of companies Act 1908 of UK, in addition to other
legislations affecting financial reporting such as; the business profit tax Act (1986), the
investment promotion Act (1999), and the Khartoum stock exchange Act (1994).
Provisions relating to accounting in the 1925 Act- section 123(1) of the Act- require that
“every company shall keep proper book of accounts in which shall be interned full, true,
and complete accounts of the affairs and transactions of the company”. The company
Act (1925) the first version, fifth edition (1980).
The Act requires every company to prepare an annual report containing the following:
a. Balance sheet
Section 124(1) requires that every company, at least once a year and at
intervals not longer than fifteen months audit the balance sheet. Moreover,
section 124(2) requires that the balance sheet has to be audited by the auditor of
the company, and the auditor's report should be inserted at the bottom of the
balance sheet as a reference to the report. The auditor's report should be read out
at the general meeting and should be opened to inspection by any member of the
company. Qualifications and duties of the auditors are prescribed in sections

42
 (137) and (138) of the Act, which will be discussed when considering the
auditor’s report.
The contents of balance sheet are clarified in section 125(1) which requires that
the balance sheet shall contain summary of the property and assets, and of the
capital and liabilities of the company giving such particulars as will disclose the
general nature of those liabilities and assets and how the value of the fixed
assets.
b. Profit and loss account
The 1925 companies Act basically concerned with the balance sheet and gave a
very little attention to the income statement to be in a certain format. As Abdalla
(2014) stated “The 1925 companies Act mainly emphasized the balance sheet
and put little emphasis on the income statement to be in any specific format and
did not require it to be audited”. Also Brieley et al. (2002) asserted, there is no
requirement to prepare a profit and loss account, the only requirement is to
disclose the profit for financial year on the face of the balance sheet, therefore, if
the profit and loss account is prepared separately it does not have to follow any
specific format, which may lead to difficulties when making comparisons
between companies.
Section (106) requires that: “once at least in every year the directors shall lay
before the company in general meeting a profit and loss account for the period
since preceding account or (in the case of the first account) since the
incorporation of the company, made up to date not more than six months before
such meeting”
c. Director report
Section (108) requires that the balance sheet shall be accompanied by report of the
directors as to the state of the company’s affairs, and the amount which they
recommend to be paid by way of dividends, and the amount, if any, which they
propose to, carry to a reserve fund.
d. Auditor's report
The duties, powers, and qualifications of the auditors specify in sections (137)
and (138) of the Act.

43
 Section 137 of the Act specifies the requirements regarding the
qualifications and appointments of auditors. It states that:
1. No person shall be appointed as an auditor of any company unless he holds
certificate from the minister of finance and national economy entitling him to
Act as an auditors of companies. Provided that the president of the republic, by
order published in the Gazette, direct that the members of any institution or
association specified in such order shall be entitled to be appointed an act as
auditors of companies throughout the Sudan, unless such certificate restricts or
limits the exercise of the right.
It is important to explain here the arguments of Abu-Algasim (1992), regarding the
above section, he stated that "it may be seen clearly that in this section there is an
amendment to the original version of the 1925 Act, where the titles of the minister of
finance and the presidents of the Republic have replaced the title of the Governor-
general as a licensing authority. Before independence, when the power of licensing was
in the hands of the Governor-General, a notice was published in pursuance of that
section declaring the numbers of six British institutions and association as eligible to
acts as auditors of companies registered under the said Act.
2. The president may, by order published in the Gazette, make rules providing for
the grant of certificates entitling the holders thereof to act as auditor of
companies, and may be such rules provide the conditions and restrictions on the
subject to which such certificate restricts or limits the exercise of the audit.
3. Every company shall, at each annual general meeting, appoint an auditor or
auditors to hold office until the next annual general meeting.
In order to preserve auditor independence section 137(5) does prevent certain
persons from acting as auditors. These include:
a. A director or officer of the company.
b. A partner of such a director or officer.
c. Any person in the employment of such director or officer; shall not be appointed
as auditor of the company.
It seems from the above that the Act is not set as to the efficiency degrees of the
individuals that can be licensed as auditors of the companies. Moreover the Act omitted
to clarify the bodies or institutions that could be responsible for licensing auditing

44
practice. In the same context asserted, Abdalla (2014) “It is clear that the act is not
specific as to the integrity and competence levels of those individuals that can be
licensed as auditors of companies. Neither did the Act specify the association and
institution whose members can be licensed to practice auditing. This could be
understood as an implicit indication to British Associations and institutions since the
Act was written by British. Furthermore, they vaguely defined what might be
considered as the auditor’s independence”. Also Brierley et al, (2002) commented “the
Act does not specify the necessary qualifications of persons who are eligible to act as
company auditors”.
Section 138 of the Act is concerned with the powers and duties of an auditor. It
states that:
1. Every auditor of the a company shall have a right of access at all time to the
Books and accounts and vouchers of the company, and shall be entitled to
require from the directors and officers of the company such information and
explanation as may be necessary for the performance of the duties of the
auditors.
2. The auditors shall make a report to the members of the company on the accounts
examined by them, and on every balance sheet laid before the company in
general meeting during their tenure of office, and the report shall state:
a. Whether or not they have obtained all the information and explanation they
have required.
b. Whether, in their opinion, the balance sheet referred to in the report is drawn
up in conformity with the law.
c. Whether such a balance sheet exhibits a true and correct view of the state of
the company’s affairs according to the best of their information and the
explanation given to them, and shown by the books of the company.

Regarding this Act, Mirghani (1979) stated that it is apparent that the Act did not
require auditors to conduct the Audit according to a set of generally accepted auditing
standards nor did it require the auditor to indicate whether or not the company has
prepared its balance sheet according to a set of generally accepted accounting principles
that were consistently followed. Furthermore, the Act required the auditor to attest to

45
whether or not the balance sheet portrays a true and correct view of the state of affairs
of the company. This is very ambitious since the state of affairs of a company is very
much more than what is presented in a balance sheet.
The insufficiencies and imperfections in the 1925 Act
It is clear that the 1925 Act is characterizes by a lot of imperfections and deficits.
Mirghani (1979), looked to the Balance sheet and income statement under the light of
this Act, and he comes to many imperfections including the following:
1. Concerning the Balance sheet format he stated, although the Act required that
every company to keep proper books of accounts, it failed to specify what
constitutes proper books of accounts. Moreover the Act did not specify the basis
of accounting to be followed by companies. In studying the Act's prescribed
balance sheet format, certain shortcomings become apparent:
a. When a net loss is incurred in any one year, the amount of the loss is to be listed
as the last item on the assets side of the balance sheet. This is potentially
misleading since such a listing will overstate total assets and will over state total
stockholders’ equity by the amount of the loss.
b. Contingent liabilities are included in the main body of the balance sheet as
appropriations in the profit and loss section. This gives the impression that a
contingent liability is equivalent to an “actual” liability and ignores the
possibility that a contingent liability may never materialize.
c. The amount of allowance for doubtful accounts is included in the capital and
liabilities side of the balance sheet. Such a presentation will not show accounts
receivable at their net realizable value.
d. By not relating the profit and loss section to the total paid-up capital, the
prescribed balance sheet fails to show total stockholder’s equity.
e. The prescribed balance sheet format dose not classifies the items relating to
asset, liabilities, and stockholders equity in any logical and orderly manner. This
impairs the readability of the balance sheet to a great extent and, therefore,
makes very difficult any financial analysis that could be based on the balance
sheet.

46
 f. Although the prescribed balance sheet indicated that plant and equipment assets
are to be valued at original cost, it failed to identify what should be included in
the determination of the original cost of a plant asset.
g. Although the prescribed balance sheet format indicated that depreciable plant
assets are to be shown at original cost less accumulated depreciation, it failed to
specify what depreciation methods could be used in computing depreciation
expense.
h. Although the prescribed balance sheet format indicated that for current assets
such as inventories and short-term investments the basis of valuation is the
lower of cost or market value, it failed to specify the various cost flow
assumption that could be followed to determine cost. It also failed to, point out
what “Market value” represents.
The imperfections related to the measurement and determine the income can be
pointed out from {Mirghani (1979), Abu-Algasim (1992), and Lodu (1997)}
a. No yardstick was given for measuring each year’s gross income (revenue)
b. The criterion of "fairly chargeable" for charging expenses against revenues is
very vague.
c. The criterion of “fairness” for allocation capital expenditures is very
ambiguous.
d. No distinction is made between operating, non-operating, and extraordinary
items in the process of determining net income (or loss).

Not far from the above, Brierley et al. (2002), concluded “the 1925 companies Act is
outdated and does not reflect the changes and the worldwide developments in the areas
of accounting and auditing practice. There is clearly a need for substantial revision of
the Act either in accordance with, for example current UK legislation or, perhaps more
appropriately in line with a framework more directly suited to the economic and legal
environment of the Sudan. At general level this should include the preparation of a
profit and loss account, specific formats for the profit and loss accounts and auditor's
report stating whether or not the accounts give a true and fair view of the state of a
company's affairs.

47
There are very important arguments said by Abu Al-gasim (1992) relating to the notes
of Mirghani (1979), in this regards Abu Al-gasim stated “although the notes are
perfectly right, it is evident that they are almost confined to the shortcoming of
presentation”. For example Mirghani considered the vagueness and the ambiguity of
some terms (e.g. fair, fairly chargeable, etc.) as defects of the profit and loss account
prescribed by 1925 Act. While in Abu Al-gasim opinion it would be more inclusive to
say that the Act in its entirely lacks specific guidance of definitions or interpretation,
and then, cite terms like fair, and fairly chargeable as illustrating examples. Also
Mirghani considered the non-distinction between operating and non-operating profit as
one of the defects of the profit and loss account prescribed by the 1925 Act. While Abu
Al-gasim believes that this kind of short-coming attributed to the historical cost basis of
valuation and it is a common defect in all profit and loss accounts prepared in
conformance with the historical cost basis concept.
At the end Abu Al-gasim (1992), tries to identify the imperfections as follows:
a. Lack of format for preparing profit and loss account, and the vagueness of
the terms used to guide its preparation (e.g. fair and fairly chargeable, etc.)
opens a large space for personal judgment, and hence, variations in practice.
b. No codification of accounting principles or fundamentals that should guide
accounting practice (e.g. valuation basis, depreciation methods, revenue
recognition, etc.).
c. Lack of interpretation or definition of terms.
d. The contents of the statutory annual reports to be prepared by companies i.e.
balance sheet, profit and loss account, directors’ report etc. do not use proper
classification that can help sophisticated analysis and better understanding.
e. No rules available for mergers, takeovers or group reconstruction.
f. The balance sheet prescribed by the act does not include comparative figures
for previous years.
g. No prescription of auditing or accounting standards to be followed.
h. The Act requires only the balance sheet to be audited.
i. The Act requires the statutory accounts to be prepared in the same manner
by all companies irrespective of their size i.e. a company qualifying as
“small” or “ medium- size” is required to prepare and file with the registrar

48
 of companies, the same forms of accounts that large companies are required
to prepare.
j. The Act contains an overriding requirement for account to show a true and
correct view, and auditors are required to include in their reports whether
this overriding requirement is taken in to account in keeping and preparing
the accounts. This rule “true and correct” seems to be too ambitious aim to
attain.
The researcher opinion in the above arguments is that it is not fair to evaluate the 1925
companies Act in the light of accounting needs, because the Act was set to organize the
establishment of public companies and control the personal behavior in general.
Therefore, it is fairer to say that there is an urgent need to local accounting standard, and
also need to radical changes in the 1925 Act.
The attempts to amendment the 1925 Companies Act
Despite the Sudan gaining independence from UK in 1956, there are diffident attempts
to amend the 1925 Act. This deficiency caused of the Sudanese civil war which started
in 1955, and also the instable political situation after independence. In this context
Brierley et al (2002), stated one of the reasons for not amended the Act 1925 of
Sudanese companies, has been the distraction of the Sudanese civil war which broke out
in 1955, this has been exacerbated by different political regimes (three civilian, and
three military) which have governed the country since independence, the common
features shared by these regimes have been frequent changes of government, continuous
cabinet reshuffles, and high ministerial turnover. This government instability affects the
environment in which accounting and auditing operate and has contributed to the fact
that no amendments have been made to the companies Act of 1925.
As stated by Abu- Algasim (1992) “Looking at the short-comings together, there is only
one possible conclusion, that is: the 1925 Act is outdated by the actual business
situation it is supposed to regulate. This conclusion must have been reached by those
who called for drafting of a new companies Act. There is a consensus among all of them
that a new companies Act is needed, and that a mere revision or amendment is not
sufficient to bring life into the old one. Therefore, the government supported by the
(SCCA) established a committee in 1988 to draft a new companies Act. The bill was
ready by 1989, but following the military coup in June 1989, the bill lost the official

49
enthusiasm which it had enjoyed during the ex-government. Consequently, the steps of
its transformation into law have slackened. This of course, does not mean that the new
regime does not feel the urgent need for a new Act, but may be because the regime is
not convinced that the bill reflects its political philosophy. He point out the main
features of the bill in the following:
a. Modeled on the British 1985 consolidated companies Act, if not a copy of it.
b. Specifies formats for all financial statements and gives details about the contents
of other reports e.g. director’s report, auditor’s report, etc.
c. Contains sections on consolidated accounts, mergers, takeovers, etc., which
were not provided for in the1925 Act.
d. The overriding disclosure rule was changes from “true and correct” to “true and
fair” view.
e. More disclosure requirements are imposed.
f. Shows details about what constitutes proper books of accounts
g. Distinguishes between large, medium, and small size companies with respect to
disclosure requirements
Many of the people with interest in the area talk with caution about the bill, because it
was not exposed for comment. In addition, the bill as was stated in (a) above is modeled
on the British 1985 companies Act, thus the legitimate question that occurs to one’s
mind is: Does the Act which was designed to satisfy the informational needs of users of
financial statements in Britain suit the needs of their counterparts in the Sudan? The
answer, in the opinion of Abu-Algasim, must be “No” because of the environmental,
cultural, and educational factors.
Abdalla (2014) concluded that “in the absence of accounting standards, one should not
be so optimistic to expect that the new Act, or any other Act, will solve the whole
problem. Because, no Act, irrespective of the efforts put in its drafting, would be so
complete and detailed to substitute accounting and/or auditing standards”. This asserts
what the researcher said that the problem is not in the 1925 Act only, but to large extent
in the absence of the standards for accounting and auditing in Sudan, which is result of
the weakness of (SCCA) in doing the job of setting national accounting standards,
taking into account; the local environmental factors and users' need, in order to be the
first step to development of the present Act.

50
2.3.2 The taxation Act
According to Mirghani (1979), the business profit tax was introduced in the Sudan in
1913 tax law. In addition to the tax Act 1930, this was legislated to facilitate the
redistribution of resources in the country. As Lodu (1997), this Act has been replaced
by many Acts which include (1967,1975, 1976 … 1986), in this regards Abbas (2012),
stated, these legislations have been amended and replaced several times in an attempt to
updated them, but still they suffer some limitations and pitfalls.
The 1930 income Act (section7, subsection 2) states that taxes are levied on net profits
of the business for a full year.
Lodu (1997), pointed out some shortcomings of the 1930 Act. These including:
a. The Act does not show the figure of net profit could be arrived at.
b. The Act does not enforce audited accounts for the purpose of assessing business
profit tax.
c. The Act permits those businesses who feel that their assessed income is too high
to make an appeal for the reduction of their tax liability.
d. The Act authorized enterprises which keep accounts on the double-entry system
and submit annual audited statements, to carry forward any losses revealed by
the accounts against the profits of succeeding years (section19, sub.1). No other
enterprises are so privileged.
With regard to 1975 Taxation Act, Mirghani (1979) looked critically and summarized
that the director of the Department of taxation is entitled to demand a taxpayer (e.g. a
business) to produce its accounting records and the documents supporting business
transactions if tax evasion is suspected. However, the Act is passive about what
comprises proper books of accounting. The Act neither specifies the business
documents to be kept in support of accounting records for tax purposes, nor does it
specify explicitly the basis of accounting to be followed in determining the business'
taxable income. The 1975 Act does not require that financial statements submitted for
tax purpose to be audited. However, the Act indicated if the financial statements
submitted for tax purposes were prepared or inspected by another person in his
professional capacity, that person should sign the financial statements and should
indicate the nature of the accounts and documents from which they were prepared.
Furthermore, the person rendering an opinion about the financial statements submitted

51
for tax purposes is required by the Act to dictate the fairness and justness of the
financial statements in presenting the profits or losses for the taxable year and should
indicate the extent of his inspection of the accounts. However, the Act does not specify
any standards to be followed so that a person inspecting the accounts in his professional
capacity can express an opinion as to the fairness and justness of the profits and losses
for the taxable year.
Although the 1975 Act specified the types of expenses that are allowed to be charged
against the revenue for the taxable year, the Act does not specify how ending
inventories of manufacturing and merchandising businesses is to be valued. One of the
common practices in auditing financial statements for tax purposes is the acceptance by
the auditor of a certificate from management indicating what they consider the value of
the business' ending inventory, (Abu- Algasim, 1992).
Abdalla (2014) stated, the fact that Sudan's accounting profession is unorganized and
unable to improve and standardize its client's accounting practices for tax purposes. In
the absence of the clearly laid-out accounting and auditing procedures for tax purposes,
a major roadblock exists in the way of efficiently administering the tax system so as to
contribute effectively to the country's development finance.
The researcher is supporting the opinion of Abdalla (2014), because, as it mentioned
above, the weakness of accounting profession in the Sudan has a significant effect in all
accounting practice problems and the business income taxes is no exception.
With regard to the effect of the subsequent amendments e.g. the 1986 Act, Lodu (1997)
stated that the Income Tax (1986) relates to accounting only in purpose of calculating
taxable income. The Act spelled out some expenses which are deductible for the
purpose of calculating taxable income. This implies the preparation of the income tax
return by making adjustments in the profit and loss account figures. As far as the
publication of financial statements is concerned accounting records are not required to
be kept in conformity with tax laws.
2.3.3 Establishment and evolution of the auditor general's chamber
Gwilliam and El-Nafabi (2002), summarized the manuscript of Auditor general's
chamber (1991) to clarify the establishment and evaluate the auditor general' chamber.
They said, under the colonial regime the Auditor General's Chamber (AGC) was first
established in 1920 as an office under the direct supervision of the financial secretary (a

52
British official equivalent to a minister of finance) who was responsible to the governor
general (the supreme authority of the condominium rule of the Sudan). The position of
the AGC as a semiautonomous body headed by the auditor general, and under the
supervision of the council of the governor general of the Sudan, was formalized by
legislation in 1933.
The primary responsibility of the AGC before independence was to verify and examine
the accounts of central government organizations and local authorities, these local
authorities mainly consisting of native administrations through the agency of the tribal.
NUZZAR, UMAD and MASHAYKH, who were responsible for collecting different taxes.
After the achievement of full independence in 1956, a transitional constitution was
promulgated including a provision for the AGC to operate as an autonomous body
answerable only to the council of the supreme head of state and the parliament.
Following the military coup d'état of 1969, comprehensive and detailed legislation was
enacted in 1970 specifying that the AGC was to be made answerable only to the
revolutionary command council. After the change of the military in 1985, a new
transitional constitution was enacted in which the AGC was placed under the
supervision of the transitional military council. In 1986, a separate AGC Act was passed
with the objective of putting the operation of the AGC embodied in the constitution.
The 1986 AGC Act forms the basis of the operation of the AGC, some amendments
were made to the Act in 1990 following the change of government in 1989.
The efficiency of the auditing in a country depends mainly in the independence of the
supreme audit institution. Gwilliam and El-Nafabi (2002), asserted this through
reviewing some article of AGC Act 1986. They said the principle of independence is
clearly recognized in the Sudan where the AGC is independent of the executive. This
independence is guaranteed by the constitution, this constitutional guarantee is
operationalized by the legislation in several ways, for example; the 1986 Act, article 18,
states that “the appointment and dismissal of the Auditor General and his deputies
require the agreement of the majority of the members of the national assembly”, the
1986 Act, article 8, “The AGC is guaranteed complete access to any records,
information, accounts or documents that it deems necessary to perform its duties”, the
1986 Act, article 36, “All the auditors of the AGC have a constitutional immunity not to
be removed from office, put in jail, or questioned in any way regarding their duties,

53
except with permission from the Attorney General and the agreement of the Auditor
General”, the 1986 Act, article 8, “the AGC has the right and full authority to decide
independently all matters related to its activities, management and planning without any
interference from any government authority”.
The researcher opinion that the legislation and articles of laws cannot give us the real
state of auditors' independence in the Sudan, therefore, to evaluate the efficiency of
auditors it is important to have an idea about the actuality practice in the country.
Currently, The Auditor General Chamber is headquartered in Khartoum. At the top of
the organizational structure are the auditor general and two deputies. The chamber is
organized into four main departments: Department of finance and administrative affairs;
department of central government; department of states; and department of public
enterprise. The department of finance and administrative affairs is further divided into
six specialized sections. These sections are concerned with the day-to-day financial and
administrative activities carried out within the chamber. The other three departments are
concerned with auditing the different public sector organizations throughout the Sudan.
The department of central government at the AGC is responsible for auditing only the
accounts of central government organizations and their related departments in Khartoum
area. Auditing central government organizations located in the states is the
responsibility of the department of states. The central government comprises 92 main
units (27 central ministries and 65 semi-autonomous national agencies). The department
of states at the AGC administers and supervises 15 regional branches of the chamber in
15 states. These branches were established in 1994 immediately after the division of the
Sudan into 26 states in February 1994.
The AGC's annual reports highlighted a distinction between the theoretical system of
public sector audit in the Sudan and the actuality of practice; the following are examples
and evidence of this dichotomy (AGC 1995/6):
1. The most striking feature of the actuality of audit in almost all of the public sector is
the lack of timeliness in the exercise of audit. This backlog, which results in delays of
up to seven years in the audit of many such organizations, is clearly documented in the
AGC annual audit reports (1995/6) “the majority of public sector organizations do not
prepare their final accounts and submit them to the AGC by the prescribed date”, while
the article 11 of the AGC Act of 1986, states “All public sector organizations should

54
close their accountants and forward the final accounts and financial statements to the
AGC within six months of the end of the fiscal year, and the AGC should not audit any
organization which has not closed and forwarded its final accounts to the chamber by
the due date”. Many public sector organizations suffer an acute shortage of accounting
staff, and in these circumstances implementation of the above articles would be a futile
gesture. Other reason is the existence of fraud, corruption and irregularities in the
accounts of many public sector organizations which makes auditing both problematic
and time consuming.
2. Although each regional branch of the AGC is responsible for auditing, on yearly
basis for all the public sector organizations in its state, the reality is that many
organizations have not been audited for more than 7 years, in some cases up to 10 years.
It is clear to the researcher that, in Sudan there is a large gap between the theoretical
legislation and articles of laws that given to promote the independence of auditors, and
its real application, which means; those legislations do not applied fairly for all
companies in the country because of the dominance of the government on the
accounting bodies, and the prejudice for governments companies.
2.4. Accounting education and profession in Sudan
2.4.1. Accounting education in Sudan
Despite of more than a decade of dramatic expansion in enrollment, female
participation, numbers of institutions, and programs, high education in the Arab world
continues to fall far short of the needs of students, employers, and society at large. In
most countries, the majority of students are enrolled in institutions that lack key human
and physical resources for success and suffer from overcrowding and poor quality.
Efforts to address these chronic problems have had only marginal success. High
unemployment among university graduates is only one measure of the reality of an
educational system that is not producing graduates with the skills needed to succeed in
the modern global economy and economies that are not producing opportunities for
massive numbers of new entrants. Higher education has critical role to play in the
national and regional restructuring of Arab economic and political institutions that is
currently underway (Wilkens, 2011).
Based in these findings and the fact that accounting education is an element of the large
education system in a country, this indicates that the accounting education in Arab

55
countries (Sudan is not exception) cannot perform its role in providing these countries
by accountants with skills which make them able to meet the countries' demands of
development, and cope with the universal challenges under the shadow of globalization.
Therefore, it is very important for these countries to improve their accounting
infrastructure. The number, type, and quality of accounting education offered are
included in the accounting infrastructure as well as the access of the student to
accounting education. Improving accounting infrastructure in Sudan and other Arab
countries is important to economic growth and to assure quality of the services provided
by accountants and auditors. Since the accounting education system consists of students,
faculty, curriculum, and resources (library, computers, facilities, financial resources,
innovations and technology) all these items should be improved to obtain the ideally
combined harmoniously and efficiently to meet the educational needs of the Sudan and
other Arab countries.
Khashormeh (1995) displays the three approaches of Wallance and Briston (1993) for
improving the national accounting structure in developing countries (Sudan included),
as in the following:
a. The Dependency Approach: This approach can be perceived in the relationship
between a developed country and a developing country which was a colony of
the developed country. As colonies became independent, many emergent nations
suddenly faced the problem of creating and maintaining a professional
accountancy workforce. In more recent times, the dependency approach has
been characterized by economic assistance such as that between the US and the
Philippines. This approach involves the transfer of money, personnel,
technology and administrative and accounting systems from the developed to the
developing country.
b. The Self-Reliance (without foreign assistance) Approach: This approach is
based on the argument that each country's accounting capability reflects its own
environment. This approach suggests that a country has the ability to conduct its
affairs in a way that suits its needs, but it is essential that a country should meet
three essential requirements: appropriate knowledge, skills and attitude.
Accountants must know the interrelationships between the elements of their
environment, as well as the relationship between themselves and their

56
 environment. Skill is the ability to perform. The greater the skill, the stronger a
person's or group's ability to be skillful at problem solving. There should also be
the desire to do things.
c. The Self- Reliance (with foreign assistance) Approach: Assistance toward the
improvement of accounting education, training and professional organization
and the assimilation of modern relevant technology depend on the extent of
accounting knowledge and skill in accounting currently available in a country.
The researcher's view, approach (a) could cause a serious problem because when
training is provided or any other kind of supports, it will surely consist of a direct
transfer of accounting practices of the developed country regardless of its suitability to
the recipient country, while approach (b), seems to be more difficult to implement in
developing countries because it has a significant need for the foreign assistance, but
approach (c) is more reasonable and it is possible to be implemented in developing
countries (Sudan included).
The Sudan Accounting education has started only recently following the need for book-
keepers which emerged as a consequence of establishing the aforementioned economic
projects in the early decades of 20th century. Egyptian book- keepers were brought to
teach bookkeeping in the few schools opened for the purpose. Accounting courses were
introduced in Gordon's college in the year 1922, (Abu-Algasim, 1992)
At present, tuition for accountancy examination in the Sudan is offered by the institute
of accounting studies (IAS), which offers courses for the United Kingdom Association
of accounting technicians and the chartered Association of certified accountant. Courses
are offered on block- release basis, and the majority of the students are government
employees. Courses are not available in the evening, so students have to rely on the
cooperation of their employers to give them time off, which prevents most private-
sector employees to attend classes. Accounting is also taught at most of the Sudanese
universities. {United Nations Centre, on transnational corporations (1990)}
The government which came in 1989 in the Sudan decided to make significant changes
in the higher education in the country which it called in the language of the government
revolution in higher education. The result of this revolution can be seen in a lot of
changes in the higher education such as increasing the number of universities in the
country from 5 universities to more than 25 universities. Accordingly increasing in the

57
number of students by 200%, and also one of the important changes is the
ARBIZATION which means changes the language of study in universities from English
language to Arabic language. Despite of a lot of shortcomings of this revolution, one
can say this revolution has a positive impact on accounting education that it had become
accessible to the students at a lot of universities in the country, but unfortunately it’s of
poor quality and its suitability to the needs of the country.
According to Abbas (2012), in Sudan the accounting education and training have
expanded greatly since the early nineteen nineties, but the expansion was in terms of
quantity and not quality. The emigration of large number of academicians and
professional with higher degrees in accounting during the late nineteen eighties and
nineteen nineties has adversely affected the quality of graduates of the most reputable
universities. Furthermore, difficulties of acquiring update education materials and
periodicals published abroad due to financing problems, has a negative impact on the
accounting education in the country. Lack of concern of educational institutions and
training centers about offering continuing training programs for accountants is another
factor contributing to low standard and quality of accounting practitioners.
Along the same lines Elias (2004) argues that the Sudanese government which came
into power in 1989 implemented what was known as “Higher Education Revolution”.
This incorporated the establishment of new universities in different states of the
country. As a result of this policy, the number of higher education students increased.
The aim of this policy was to try to bring together the humanistic approach of providing
higher education for a wide sector of eligible Sudanese students, and the pragmatic
approach of satisfying the need for qualified profession also and technicians.
The problems of accounting education in the Sudan is not different from the problems
of other developing countries, because these countries share the same characteristics
such as, poverty, large foreign debits, low level of technology, and need to improve
education system. The report of AAA (1975) committee on accounting in developing
countries (Sudan included) identified the most serious problems of accounting
education in these countries. Khashormeh (1995) summarized these problems as in the
following:
a. Inadequate locally authored accounting textbooks.
b. Inadequate teaching of accounting subjects at the college level.

58
 c. Lack of qualified accounting instructors at the college level.
d. Lack of professional development opportunities for accounting educators and
practitioners.
e. Inadequate accounting education for managers and prospective managers.
In his evaluating the accounting faculties in developing countries, Khashormeh (1995)
stated, most developing countries lack a qualified accounting faculty due largely to the
low salaries paid to professors. In addition, most professors in developing countries
supplement their income by consulting or by having their own practice, which makes
them less available to advise students, to participate in developing and updating the
curriculum, to conduct research, or attend professional meetings and continued
education workshops and seminars. Therefore he adds to the above problems the
scarcity of textbooks that meet the educational needs of the students.
The researcher is strongly supporting the opinion of Khashormeh (1995) regarding the
accounting faculties in developing countries, and can adds, this situation brings others
related problems such as, the lower desire for the academic to write accounting
textbooks that focus on the accounting needs of developing countries, and the
opportunity for students to participate in class discussions is very limited because of the
large number of students in each class.
All these problems and others came as a result of the fact that many developing
countries (Sudan included) have taken the easy path to the creation of accounting
education systems by copying system of developed countries. The significant problem
is not in copying, but these developing countries do not seek to adapt these accounting
education systems to their specific economic, social and cultural environment, the
normally expected result is the imported accounting education systems have often failed
to provide graduates who can meet the challenges of their societies because they were
educated to operate an accounting system for different society. This situation and all the
other problems of accounting education in developing countries can be fit perfectly into
the case of Sudan.
According to Abdalla (2014), the quality of accounting education in the Sudan was
structured along the U.K and the U.S.A lines. Consequently, educational qualification
together with personal social and economic factors of the professional accountants
tended to influence accounting practice in the Sudan to reflect those of U.K and the

59
U.S.A. Additionally, almost all of the large international firms of accountants in the
Sudan were British, and these have also trained local accountants to service the audits of
multinational companies according to British concepts. Provision of scholarships for
local students and grants of text – books were major contributory sub-factor". In the
same line Lodu (1997) stated that “most of the major multinational companies have
been U.K based, and these have adopted the accounting systems of the home country
for their subsidiaries in the Sudan and have a trained local staff in those systems.
Developing countries (Sudan included) do not usually have the resources for home
training. Many of these countries rely on professional bodies of developed countries to
train, tutor and examine their accountants. Even those countries which attempted to
have their home training, still use the English language and read U.K or American text
book or have the text books translated in to their home languages with little or no
modifications of terminologies and concepts.
2.4.2. Accounting profession in Sudan
The accountancy profession in Sudan did stand out and pass through a lot of
challenging stages in its development due various repressing factors such as the civil
wars in the country as mentioned before. The conflicts delay the country in many
aspects including the development of the accountancy profession .
Lodu (1997) enumerates some reasons that led to the delay in the formation of
professional bodies in the Sudan, including:
a. The small number of professional qualified accountants and the limited influence they
could exert.
b. Lack of political stability and government support.
c. Lack of encouragement by the national governments and endeavors by governments
to control the constitution of the professional body.
d. Lack of cooperation among accountants.
The attempts to develop the accounting profession in Sudan began somewhere in 1964.
Further attempts were made by the state in 1975 and then 1979, but all those endeavors
had been unsuccessful due to a number of factors such as the scarcity of qualified
professional accountants; lack of adherence to professional control and commitment to
ethical standards; as well as lack of uniform standards governing the profession.
However, with the assistance from some international financial agencies such as the

60
IMF, International Development Association IDA, the state of Sudan, through its
Parliament adopted some legislation called certified accountants Act 1988 to set up the
Sudanese Council of Certified Accountants (SCCA) in 1988, (Nigrimwa, 2016).
Following the establishment of the SCCA in the 1988 which was modeled on the
British’s Association of Chartered Certified Accountants ACCA, the condition of the
accounting and auditing began to improve in the Sudan, Article 4 of the certified
accountants Act 1988, sets out the function of the council of SCCA which includes the
enhancement of the role of accountants in commercial environment. While Article (5)
defines the powers of the Council and contains the following matters:
a. Preparation of studies and research in the field of accounting and auditing profession
and identifying the scientific alternatives to it.
b. Develop equivalent curricula and examinations for accountants and determine the
qualifications required for registration and register.
c. Granting registration Certificates in accordance with the provision of the law.
d. A guidance to deregister a Chartered Accountant from the register for any
misconduct.
e. Discipline any chartered accountant who violates professional ethics in a manner
determined by the regulations.
f. Determine the fees to be determined by an order issued from time to time.
g. Formation of any technical Committees to assist in the implementation of the terms
of reference.
The objectives of the Sudan Council for Certified Accountants (SCCA), included,
(Lodu, 1997):
a. Defining membership, identifying and registering members.
b. Promoting professional education through training and research in accounting and
other allied subjects.
c. Participating in the drafting of a new Companies Act.
d. Developing local GAAPs, auditing guidelines and professional code of ethics.
According to Ngrimwa (2016) the achievements made by the SCCA from its inception
include the publication of educational circulars; forging a professional relationship with
the British Association of Chartered Certified Accountants (ACCA) in form of a Joint
Examination Council. Other accomplishments are the link with the Intergovernmental

61
Working Group of Experts on International Standards of Accounting and Reporting
(ISAR); the adoption of International Education Standard so as to enhance the
accounting profession in Sudan; the adoption of Auditing and Assurance Standards and
the implementation of financial Reporting Standard.
Unfortunately the efforts of ACCA towards the development of accounting and
auditing profession did not take place mainly due to various factors including the
internal civil war conditions as mentioned before. In 2004 the government of Sudan has
established the Sudan Accounting and Auditing Profession Organization Council
(SAAPOC). One of the main objectives of this Council was to formalize the
accountancy profession in Sudan with the emerging requirements of accountancy and
auditing requirements expected by global economy and international agencies. The
Council Regulating Accounting Profession in Sudan was created under the following
Law :
Session VII, No. 35, Law of the council regulating the accounting and auditing profession
reads as follows: “Pursuant to the provisions of Article 90 (1) of the Constitution of the
Republic of Sudan for the year 1998, the President of the Republic and the National
Assembly approved the following Law: http://ecnomics26.yoo7.com/t29-topic.
The Council exercises its powers under the law to regulate the accounting and auditing
profession in Sudan by enhancing the profession to consolidate its principles, develop
control mechanisms to ensure the maintenance ethical values, while coordinating with
local and international institutions on curricula development, and linking with local,
regional and international accounting professional associations. In terms of its
administration, the Council holds six meetings in a year, and is composed of a twenty-
two member-council, headed by a President, a Vice President and a Secretary General.
The Council is appointed by the president of the Republic and its supervision falls under
the state’s Council of Ministers. The Council represents some of the government
Ministries and agencies that include the country’s Federation of Accountants and
Auditors as well as professional associations and members of the public with
experiences and competences in the field of accounting. . The duties of the Council are
positioned within the framework of the general state policies relating to economic,
financial and administrative spheres, but the Council maintains independence from
direct state control. It is important to further remember that the Council exercises its
powers through specialized Committees created by the Council Regulating Accounting

62
Profession in the Sudan. This evidence provides the heavy involvement in the
accounting and auditing profession in the Sudan with the establishment of SAAPOC,
(Ngrimwa, 2016).
Abbas (2012) states, the SCCA were entrusted to regulate and organize the accounting
profession in the country. However the achievements of the council compared to its age,
which was over sixteen years by the end 2004, seem to be less than satisfactory. It
issued only four standards and graduated 13 chartered accountants. This is caused by
the over-lasting problem of political instability and government intervention. Failure of
efforts to issue a comprehensive body of accounting standards and principles can
mainly be attributed to lack of enthusiastic support by authorities and policy makers.
Therefore the nature of the professional body as self-governing body has positive
impact on accounting practice in a country, but the mere existence of a professional
body only is not enough. Therefore in the Sudan there is a lot of work that must be done
to assist the professional body in grabbing its right in self-governing and organizing the
accounting practices in the Sudan, this may need understanding and supports from
government, in addition to urgent need to cooperation among accountants in the
country. As Abdalla argued (2014), “that much of the work still remains to be carried
out by the council to put the accounting profession in the Sudan to its strength in
shaping accounting practice like in other countries such as the United Kingdom, the
United States of America, Kenya, and Nigeria etc.”
Furthermore, to create professional accountants who are able to fulfill the needs of
development in Sudan, there is the urgent need for systematic and strong accountancy
education approach. This approach must be developed at all levels: the basic level of
education, high school, secondary school, higher education, and till continuing
profession. The development of accounting education and profession must be
implemented on long run planning basis, regardless of the economic and political
condition. Unfortunately, this is very difficult to happen in the Sudan because the
unstable political and economic condition in the country often affects all the strategic
planning.
Also when talking about the accounting profession in Sudan, one must not ignore the
effect of the former colonial, that Sudan being one of the British colonies, and the fact
that the British influence on its accounting profession is very deep. Therefore, the

63
Sudanese accounting profession has significantly kept the British statements of standard
accounting practice; regulation, formats, wording, and its items classification, with
ignoring whether they suit to the local environment or not.
2.5. The weaknesses in the current financial reporting system in Sudan
Financial reporting requirement differ around the world. The difference has been caused
by the variety of social, economic, and legal circumstances, and by different countries
having in mind the need of different users of financial reports, when setting national
accounting requirements (Almahi, 2004)
Regarding the users of financial reports in the Sudan, Siddig (1994) argues that the
classifications of users in the Sudan were different from those reported in the literature
particularly in their sub-groups. The fact that users in the Sudan originated in an Islamic
environment, introduces new users of accounting information such as the Zakat
authorities. “Zakat is an obligatory payment by Muslims according to their financial
abilities”. The most important user in the Sudan is the tax authority, this similar to most
developing countries. Tax authority in developing countries claim to formulate rules
and regulating standardizing accounting practice in the absence of strong and
recognized accounting profession.
It is important to note that, accounting in the developing countries does not play the role
it plays in the advanced countries, that it does not participate in the economic
development process because of its failure in providing the information needed for
economic decision making. Accounting practice in the Sudan is not exception of those
developing countries; therefore the features of financial reports in the country came not
far from the line of developing countries. Abu-Algasim (1992) numerates the features of
financial reports in the Sudan as follows:
1. Accounting languages used in the financial statements include technical terms
which can only be understood by technical users, although most of the users in
the Sudan are non-technical and unsophisticated in financial accounting matters.
2. Accounting language not includes technical terms only, but also includes
common words which have been given technical terms, meaning that can be
understood only by those with specialized knowledge.
3. Financial statements with their figures and technical terms have less implication
or meanings to shareholders. They concentrate mainly on directors’ report.

64
 4. There is a need for consistency in accounting methods and format used.
5. There is a time lag between the end of the financial year and the release of final
accounts. The 1925 companies Act requires companies to hold their annual
general meetings in a period not exceeding three months from the end of the
financial year. Although the three months period seems to be adequate,
companies do not conform to that regulation. The time lag of the annual reports
of companies extended from nine months to a year.
6. It is obvious that under an increasing rate of inflation such as the one in the
Sudan, all efforts to improve relevance of figures report to economic decision
within the framework or concept of historical basis of valuation are useless.
7. The impact of socio-cultural milieu of enterprises’ ownership on external usage
of accounting information.
Hamza (1997), adds to the above, the insignificant usage of financial statement in
shareholder’s decision-making in the Sudan. On an average only 10% of shareholders
are found to be demanding, using and depending on financial statements in their
decision-making. The remaining (90%) either demand financial statements for
procedural formalities and legal obligations (particularly institutional shareholders)
without depending on them or do not demand these statements at all. This insignificant
utilization is substantially determined by two constraints; deficiency in accounting
information and the socio-cultural milieu of companies’ ownerships. There is a narrow
structure of companies’ ownerships in the Sudan. Such structure is apparent from the
high concentration of shares ownerships, narrow distribution and low diversification of
shareholding in the country. This narrow structure has been formed, to a considerable
extent, as a result of socio-cultural influences. About one third of shareholders buying,
holding and selling shares is of non-economic nature. Hence shares may be bought, held
and /or sold not as a matter of trading, but instead as a response to influence, such as the
manipulation of family or political conflicts, the support of issuing companies for
political, social or religious solidarity etc.
Structure has inordinately deterred the external utilization of accounting information in
the country. It has crucially led to low share-dealing (only 19% of shareholders deal in
buying and selling shares). Naturally, low share-dealings imply low needs and usage of
accounting information. Also the influence of socio- cultural factors on share- dealing

65
decisions implies that shareholders who are motivated by such influence are likely to
make decisions with little or no regard to a company’s economic results. As a result,
their use and dependence on financial statements is minimal, (Hamza, 1997).
From the preceding discussion, one can conclude the following points:
1. It is clear that financial reporting system in the Sudan does not play its role in the
economic development of the country, this deficiency maybe for two reasons; firstly,
the less understandability of the financial reports because of using high technical
language, secondly, the limited use of financial reports in shareholder's decision-
making. It seems that each of the above reasons causes the other because maybe the
limited use of financial reports came as a result of less understandability. And also the
high technical language came from less desire to change the technical language because
of feeling that the reports will not be used, but in fact the limited use of financial
reporting in decision making came directly from the influences of socio- cultural
factors, that people in Sudan are characterized by risk avoider meaning they have less
desire to deal in buying and selling shares and even when they buy or hold or sell shares
it will be for social reasons more than trade reasons.
2. Despite of strong theoretical legislation of the auditor general's chamber regarding the
closing of final accounts of companies, many companies in the Sudan especially the
public companies do not close and forward its final accounts to the auditor chamber by
the due date, because it suffered an acute shortage of accountants, as a result, the most
striking feature of the auditing equality practice is the lack of timeliness in the exercise
of audit. Therefore, the auditor may be absent in some companies in Sudan for long
periods, which negatively affects the quality and integrity of financial reports in the
country.

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 CHAPTER THREE
COMPARATIVE OUTLOOK ON THE ACCOUNTING
PRACTICES IN ARAB COUNTRIES
This chapter aims to compare the accounting practices of Sudan with those of its
neighboring Arab countries, namely Egypt, Libya and Saudi Arabia. Sudan and Egypt
shared the same history because they were both under British colonies for a
considerable period of time. Also they have a similar level of economic situation. Libya
was under the Italian and British colonies while Saudi Arabia was never under any
colonial power. There is a difference in the level of economic situation among those
countries. Even though Sudan and Egypt are similar they are both different from Libya
and Saudi Arabia due to the production of oil. On the other hand Egypt and Sudan
cannot be described as oil countries. The assortment of these countries can help in
providing a useful comparative study.
3.1. Accounting practices in Egypt
Egypt is a very important Arabic country, which garners importance from many
respects, including large business and accounting education systems. It has the largest
population among the Arabic countries. Consequently, it provides a large percentage of
the practicing accountants in the Arab World and even a higher percentage of the
accounting faculties in the region.
Since the growth of Islamic influence, Arabic became the official language in Egypt.
As such, all legal documents in the country must be written in Arabic. However, the
colonization of Egypt by the British undermined this, so the English language has been
the second language in Egypt since 1882. Hence, many accounting letters, documents,
rules, laws, and procedures have been derived from those used in Great Britain.
Colonization also caused Egyptian accounting to be greatly influenced by British books,
periodicals and practitioners. Another social change that influenced accounting in Egypt
is Islam, which has its effect on the question of interest, while Zakat (wealth tax) and
the distribution of inheritance must be carried out in accordance with Islamic rules.
Also, family inter-relationships play a fundamental role in the culture of the people and
have had a significant impact on behavior of Egyptians. Therefore, the relative wealth,
power and prominence of the family play a dominant role in obtaining jobs, education
and many privileges. Other social effect factors are the traditional ties with European

67
countries which had given Egyptians the chance to study accounting abroad and there
has also been a spread of accounting education and training in Egypt. Moreover, the
adoption of socialism after 1952 released new forces like the willingness of Egyptians
to become mobile and the entry of women into the labor market have created new
sources of accounting manpower (Kayed 1990).
Furthermore, according to Briston and Ashker (1985), economic, political and legal
factors have significantly affected accounting development in Egypt. During the 1940s
and 1950s Egypt experienced a drastic growth in its private sector activities and a
corresponding development in its capital market transactions. This increased the need
for the services of chartered accountants and accordingly, accounting laws became vital
in regulating accounting practices as well as the accounting profession. In turn this led
to an increase in the number of local and international accounting firms in the country.
However, the expansive changes after 1952 (date of independence), such as: The land
reform, the nationalization of the economy, the adoption of comprehensive planning and
the application of Arab socialism resulted in the growth of the public sector which has
gained a stronghold over the economy. These changes have had important implications
on accounting and the accounting profession in Egypt. It has been recognized that the
principle benefits of accounting are:
i. To perform the attestation function which offers protection to society and lends
credibility and confidence in its enterprises, state institutions and national and local
government authorities.
ii. To play an important role in resource allocation in the planning of economic
development, formulating and monitoring development plans, financing development
projects and supervising management.
iii. To enhance the role of accountants in the evaluation of social programs: These
changes in accounting functions led to the issue of law No- 129 of 1964 which
established the central accounting organization (CAO) to control and audit the financial
transactions of public sector enterprises and to secure consistency in accounting policies
within the framework of a uniform accounting system. The CAO does not confine itself
to traditional financial auditing but also engages in performance evaluation, including
programs auditing, efficiency auditing, and effectiveness auditing.

68
According to Amer & Khairy (1981), in 1951 decree No 133 was issued concerning the
regulation of accounting profession practice. The decree restricted practice to those
accountants who had graduated from colleges, universities and business institutions.
Until 1956, public accounting in business and in government was provided by two
sources: chartered accounting and the state audit department.
The chartered accountants: They were members of Egyptian Society of Chartered
Accountants and Auditors (ESCAA), which was established in 1946. Before the
government established the public sector, all corporations, partnerships and individual
enterprises whose capital exceeded a certain limit had to engage a chartered accountant
to conduct an independent audit annually. Duties and responsibilities of chartered
accountants in performing audits in Egypt during the period were similar to those of
chartered accountants in England. It is needless to say that because of the long existence
of British rules in Egypt, the ESCAA was much influenced by the British accounting
profession.
The state Audit Department: According to law any public funds invested in any form
of activities had to be audited by the Audit department which is a public agency. The
purpose of this audit was to determine how effectively a governmental institution
discharged its financial responsibilities and complied with the laws regulating the
operations of public funds.
In this context Briston and El.Ashker (1985) stated that at the time when the prevailing
Egyptian accounting system was primarily based on the British system. The enterprises
above a certain size had been required to appoint a qualified accountant to act as
auditor. At the same time, the financial transactions of governmental institutions were
audited by the state audit department, which was broadly comparable with the
exchequer and audit department in the UK, particularly in its emphasis on financial
regularity rather than efficiency. Along similar line, Samuels and Oliga (1982) argued
from 1882, to 1956, the central political and business influence in the country (Egypt)
came from the United Kingdom.
According to Wahdan et al, (2005), the legal framework surrounding the accounting and
auditing profession in Egypt includes the basic Company Act, the Accounting Practice
Act (1951) and the Banking Act (1957). Also the Central Accounting Organization Act
(1988) and Capital Market Act (1992) have had considerable impact and influence on

69
the practice of accounting and auditing in Egypt. The combined set of laws represents
the legal framework for the accounting and auditing profession in Egypt. The audit
profession in Egypt faces challenges in complying with professional standards of
accounting and auditing. Some of the factors that contribute to the lack of compliance
are: The lack of experience and expertise, the gap between accounting and auditing
education and latest practices and the lack of competitiveness of the profession in terms
of salaries and incentives.
The issue of law No. 133 of 1951 signified the importance of the accounting profession,
so from then onward auditors examining and legally certifying tax declarations. Law
No. 253 of 1953 (amending law No. 14 of 1939) legislated the certification of tax-
payers' declarations by a licensed accountant. The auditors' responsibilities were further
regulated under article 85 of the foresaid law, whereby comprehensive penalties were
constituted to be imposed on dishonest auditors. The executive regulation to tax law 157
of 1981 also contributed in establishing accounting rules applied to the realization of net
profit for tax purposes. Furthermore, minister of finance decree No.168 of 1982 further
regulated the accounting procedures related to the maintenance of accounting
documents and the taxation card associated with each taxable account. The foundation
of a tax committee within the accounting body (ESCAA) and the promulgation of tax
accounting guidelines were further features of such regulation (Hells, 1992).
The latest Income Tax Act No. 91/ 2005 requires that net profits for tax purpose be
based on the accounting profit in the audited financial statements which are prepared
according to EAS, after adjustments by tax inspectors, with some tax rules also being
used for financial reporting purposes (UN, 2008).
Therefore one can conclude that the British's political influence until 1956 makes the
organization of the accounting profession and the financial reporting practices in Egypt
closely followed those of the UK. Therefore, the training of accountants, the law
regulating companies, and the disclosure standards were all based on those of the UK.
Since 1961, the national planning has become a way of life in Egypt. The ability to
formulate plans realistically and to implement them is dependent, to a large degree,
upon the availability of reliable accounting information at both the micro and macro
levels of the economy. It was essential to obtain the information about projected plans
and, for control purposes, to evaluate how effectively plans are being executed. This

70
evaluation was also an important aid to future planning. It was felt by the government
that a uniform accounting system, compulsory for all economic units in the public
sector, would be very valuable. Accordingly, in 1966 Presidential decree No. 2125
provided for the formation of a consultative committee to study the uniform system. In
1968 the uniform accounting system was introduced by the Central Accounting
Organization (the CAO) and was made compulsory for all public sector enterprises,
except banks and insurance companies (Kayed, 1990). Also Kayed (1990) summarized
the general objectives of the UAS, which was started by the CAO, as follows:
a. Provision of a chart of accounts embracing a wide range of comparable basic
information, as well as several accounting statements which are required for
planning, coordination and control at all levels of the organizational structure.
b. Provision of links between the accounts at the enterprise level and the macro-
level (social accounting). Such linkage would be achieved if the terminology,
accounting concepts, standards, etc. were unified in such a manner as to meet the
needs of macro-accounting.
c. To facilitate the objectives of collecting tabulating and storing accounting
information.
d. To enable the government to measure explicitly the performance of public sector
enterprises and make comparisons with regard to financial or other similar
targets.
e. To provide information on the efficiency of public sector entities in terms of
optimum allocation of resources and in comparison with other public sector
entities.
f. To provide the government with prompt information, thus overcoming some of
the deficiencies inherent in the work of committees or bodies dealing with
public sector accounts, in terms of their delay in reporting their findings to the
government and their inability to examine regularly the financial and economic
affairs of public enterprises.

Kilani (1988) looked at the main features of the Egyptian uniform accounting system as
it is reported in the Central Accounting Administration CAA (1966), and he
summarized these features as the following:

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 a. The system is compulsory for all Egyptian public enterprises and private
enterprises could be required to apply the system by the relevant minister.
b. The system is a uniform system which includes:
1. Chart of accounts.
2. Bases, rules, terminology and definitions of accounting.
3. Accountants and financial statements.
4. Planning budgets.
Regarding the planning, Briston and El-Ashkar (1985) state that the main reasons
behind the establishment of a full uniform accounting system in Egypt were: to provide
the government with a source of information for the process of planning, control of
economic activities, measuring the effectiveness of management in utilizing the
resources entrusted to it and measuring the contribution of each enterprise to national
income and national production.
c. The system is flexible. The presidential decree No 4733 of 1966 stated that a
permanent technical committee should be formed by the chairman of the CAA.
This committee would recommend any changes or adjustments which became
necessary because of changing circumstances, meanwhile the system adopted
flexibility as one of its standards. It allowed companies to keep special records
for more detailed information which is needed.
In summary, the main characteristics of the Egyptian uniform accounting system are: it
is clear, simple, meet the need of the national requirements and adopts existing
accounting rules and principles.
The main driver of uniform accounting system was to plan and control economic
activity. Since that time, the accounting profession was powerless in improving the
Egyptian financial regulation. In 1997, the Egyptian Society of Accountant and
Auditors (ESAA) supported several proposals that created the first set of 19 Egyptian
Accounting Standards (EAS). These standards were primarily based on the International
Accounting Standards (IAS). By the end of 2002, there was 22 Egyptian accounting
standard implemented by the listed companies. In 2006, an entire set of EAS was
released to replace those of 1997 and 2002. The complete set of new EAS is comprised
of 35 standards which are based on the IAS (currently referred to as the IFRS) (Hassan,
2008).

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In reviewing of the practical implementation issues relating to international financial
reporting standards, the report of United Nation (2008), illustrates the practical
implementation in Egypt, it states that, as the need to improve the financial reporting
and disclosure system had been recognized, a new set of EAS were issued, as a part of
many other reforms, pursuant to the Decree No. 243/2006 of the Minister of Investment
and consequently replace the old standards issued under the two ministerial decrees
Nos. 503/1997 and 345/2002. These standards are applicable to all listed joint stock
companies. The new EAS have been issued to comply with economic changes and
scientific and technological development either on the business performance level of the
companies, or on the level of the accounting systems that apply. The issuance of these
standards is an important step in improving the application of principles of good
corporate governance by listed companies. The new EAS were prepared on the basis of
IFRS (version 2005), except for some departures and adaptations, because the
preparation of financial reports refer to IFRS in cases where EAS does not address
specific issues. This according to Decree No. 243/2006 which requires companies to
look at IFRS standards, if there is no comparable EAS (IFRS, 2016).
The main departures and adaptations from IAS/IFRS, as it stated by UN (2008), are:
(a) EAS 1”presentation of financial statements” which is corresponding to IAS 1:
i. Profit distribution to employees and members of the board of directors (employee
benefits) are not recorded as expenses in the income statement, rather they are recoded
as dividends distribution in accordance with the requirements of local law.
ii. This departure also affects other two standards, namely EAS 22 “Earning per share”
and EAS 38 “Employee benefits”
(b) EAS 10 “Fixed assets and their depreciation” which is corresponding to IAS 16:
Paragraphs 31-42 of this standard on the revaluation model have been modified, as this
model cannot be used except in certain cases, and when it does not contradict the laws
and bylaws. Otherwise, the entity should use the cost model as provided in paragraph 30
of IAS 16.
(c) EAS 19 “Disclosure in financial statements of banks and similar financial
institutions” which is corresponding to IAS 30 that has been superseded by IFRS 7.
Paragraphs 44, 51 and 52 of this standard have been omitted, as they prohibit forming a
general provision for loans and borrowings as a deduction from profits and losses

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(expense item), instead stipulating that this provision be formed as a deduction from the
owners’ equity (reserve). According to the regulations of the central bank of Egypt and
generally accepted Egyptian banking practices, however, this provision may be treated
as an expense and therefore is deducted from revenue before calculating profits and
losses.
(d) EAS 20 “Accounting rules and standards for financial leasing operations” which is
corresponding to IAS 17.
This standard is different from IAS 17 for leasing, as the Egyptian financial leasing Act
No. 95/1995 issued by the Minster for Economic and Foreign Trade stipulates a
completely different accounting treatment to that widely used internationally (arts. 24
and 25), under which the lessor records the leased asset in his books and depreciates it,
while the lessee records the value of the payments of the leasing contracts in the profits
and losses as expenses in the period in which they are paid.
The United Nation’s report (2008) summarized the steps that have been already taken to
build on the accounting reform in Egypt. These are:
a. A new set of Egyptian accounting standards based on IAS/IFRS issued in 2006.
b. A new set of auditing standards based on ISAs issued in 2008.
c. New articles in the Capital Market Act (CMA) that require establishing a
register for public company accountant’ oversight board.
d. A new unit in CMA for monitoring financial reporting.

Despite these steps, the financial reporting system in Egypt requires further
improvements, especially in expediting the process of issuing new EAS after the release
of any new IFRS and reducing the gap between accounting education and practices in
relation to international requirements. In this regards, Wahdan et al. (2005) stated that
despite the fact that EAS are based on IFRS, there is also delay in the issuance of
implementation guidance for standards. This is due to a lengthy issuance process for
local standards. In addition, Abdelsalam and Weetman (2003) explained the first
difficulty facing the adoption of IASs in Egypt, stating that the language was the major
difficulty when first adopting the IAS. This was due to the fact that IASs are officially
issued in English language, while the main language in Egypt is Arabic. In addition,
during the time of introducing and implementing the IAS, there was no official Arabic

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translation available in the public records in Egypt. It was therefore difficult for
companies to understand the English language version of IAS. The problem remained
until the end of 2002, when the IAS board’s website reported a translation that was
produced by the International Arab Society of Certified Accountants (IASCA), based in
Jordan.
In this context, Baskerville and Evans (2011) stated that the textbooks play an important
role in accounting education. Accounting educators face problems in communicating
unfamiliar concepts to students when these concepts are based on texts or standards
written in language other than their native language. Also, Baskerville and Evans (2011)
explore many problems in the communication of accounting concepts which related to
the different languages and cultures. These problems are:
- The exact equivalence cannot be achieved in translation. This is because
accounting concepts in any language are part of that language community’s
accounting culture. Where a concept does not form part of a culture, its
translation is not meaningful, no matter what words are chosen.
- There are differences in languages’ syntax, grammar, style and lexicon. For
example, English has many more words than most other languages, but some
other languages have more complex or flexible grammatical structures than
English. This means that subtleties may be expressed in different ways and that
literal translation is usually not possible.
- Where the languages are closely and share terminology with common roots, the
words are similar, but do not mean the same thing. On the other hand, where
languages are less related, they are likely to differ not only in terminology, but
also in syntax and grammatical features. Therefore, significant change to the
original sentence structures often occurs in translation.
- Sentences may also become more complex in translation because additional
explanations, paraphrasing or circumlocution are adopted by translators to deal
with a lack of equivalent terminology.
- The translators always have to interpret the original meaning. The risk that they
do not capture the meaning intended by the standard setter.

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3.2. Accounting practices in the kingdom of Saudi Arabia
The Kingdom of Saudi Arabia covers a very large area. Its total area is about 2.240.000
square kilometers. The Kingdom is bounded to the north by Jordan, Iraq and Kuwait, to
the east by the Arabian Gulf, Qatar and United Arab Emirates, to the south by Oman
and Yemen and to the west by the Red sea. The geographical location of the Kingdom
gives it strategic importance since it is considered as a bridge between the west and
Asia. Islam is the only religion practiced in the country and Arabic is the official
language.
Political system in the Kingdom of Saudi Arabia is differing from the other Arab
country, for example, there are no political parties or unions. The country does not have
a history of exploitation or subjection by any western colonial power. It has become the
most influential Arab country and the leader of Islamic world. Therefore, the Kingdom
has maintained a respected and influential position in the international community.
Prior to the discovery of oil, Saudi Arabian's economy was poor and depended mainly
upon the income received from pilgrims to the holy cities (Makkah and Medina) and
various traditional business activities. These activities were normally dominated by one
person or family, who owned all the resources, which used and was completely
involved in the day-to-day operations of the business. Little attention was given to
accounting records, even where these were kept. It was on a primitive and single entry
basis. In addition there was no notable industry, with a lack of capital accumulation and
few skilled workers or experienced entrepreneurs. At that time the resources of the
country were directed towards the establishment of administrative organizations and the
development of communications, educations, security and medical facilities. The
discovery of oil in abundant quantities has made Saudi Arabia a wealthy country with
all modern amenities. Therefore, the need for accounting information in Saudi Arabia
emerged with the changes in economic and commercial conditions, with the growth of
corporations and separation between management and ownership. Management needs
accounting information for rational decision- making, while investors, creditors (mainly
commercial banks) and government (Zakat and income tax department) are interested in
the financial position and results of operations of corporations in the Kingdom
(Al.Rehaily, 1992).

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According to Hells (1992), the authority to issue professional accountants' licenses in
Saudi Arabia is exercised by the Royal government. The first public accountants'
licenses were issued in 1955 by the Ministry of Finance. In 1959, the authority to
license professional accountants was transferred to the Ministry of Commerce.
Similarly, Al.Rehaily (1992) argued that the first accounting firm that has established in
1955 was a foreign firm. At that time, the authority to issue accountants' licenses was
exercised by the Ministry of Finance and National Economy. In 1957, that authority was
transferred to the Ministry of Commerce and Industry. The first Saudi Arabian
accounting firm was established in 1959. By the end of 1950s there were only seven
accounting firms in Saudi Arabia.
Also, Hells (1992) states that the companies Act of 1965 prescribed regulation for
professional accounting and auditing in Saudi Arabia. The legal basis for accountants
prior to this law was established only in the articles of combination, which contained
rules on the appointment of auditors. Although the origin of the Act could be traced to
the British companies Act of 1948, it omitted two significant elements of the auditors'
report that are required by the British Act. These elements are:
a. Whether the financial statements are in agreement with the accounting rules.
b. Whether the financial statements present fairly the financial position and results
of operations.
The companies Act did not discuss matters such as: accounting principles, professional
ethics, auditing standards and the creation of professional body of accountants in Saudi
Arabia. Moreover, this country has been influenced by the Egyptian companies' law and
other earlier Egyptian laws, due to the adoption of those laws which did not require any
modification to make them suitable to the need of Saudi Arabia. Considering the fact
that, the accounting profession in Egypt was influenced a lot by the British accounting
profession. One can state that the accounting profession in Saudi Arabia has been
indirectly influenced by the British accounting profession even though the country was
not under the British rule.
Hells (1992) explained the reasons for this influence stating that in 1968, 35% of the
licensed accountants in Saudi Arabia were Egyptians. Also 45% of these licensed
accountants had received their college education in part or entirely from Egyptian
universities. During that time Saudi Arabia sent most of its students to Egypt for such

77
training before the establishment of its first school of business in 1957. Egyptian legal
advisers and accountants helped to formulate the Saudi companies accounting
profession. Thus, it is natural that many of the accounting provisions and accounting
practices of Egypt were transferred to and incorporated in the laws and regulations of
Saudi Arabia.
According to Al-Rehaily (1992), the development of accounting in Saudi Arabia, as in
many developing countries, has been affected by a number of factors, of which the
following are perhaps the most important.
Type of business ownership: Individual proprietorships and small family groups are the
dominant features of ownership in many developing countries and Saudi Arabia is no
exception. The disclosure of financial information in such small individually owned
businesses is minimal, because usually these individuals tend to resort to secrecy and
protection of information from competitors, government and the public.
Foreign influence: The foreign influence on accounting practices in Saudi Arabia
operates through three different channels: foreign accounting firms, foreign companies
and foreign accounting education.
Foreign accounting firms: As it was stated earlier by Al.Rehaily (1992) that the first
accounting firm licensed to practice of public accounting in Saudi Arabia was a foreign
firm. The foreign accounting firms have some negative impact upon the local
accounting system. As Enthoven (1991) has observed “many countries in which foreign
accounting firms operate tend to follow foreign accounting auditing pronouncements,
which may not help develop useful local standards. In general, accounting firms are not
involved adequately in social and economic programs. Neither do they assist
sufficiently in fulfilling the accounting needs of smaller firms directly or through
development institutions”. On the other hand, there are positive as well as negative
effects of these foreign companies upon the local accounting system. The positive effect
stems from the fact that the Saudi staffs are introduced to modern accounting practices,
such as the use of computer technology in day-to-day business operations.
Indeed, the foreign firms constitute a significant proportion of the total firms operating
in Saudi Arabia. In addition, there are a lot of big firms in the country, either in form of
branches of UK or USA offices. Also the existence of the foreign firms can be realized

78
through establishing an association or relationship with an operating firm in Saudi
Arabia.
Foreign companies: As a result of rapid economic development during the past two
decades, many foreign companies particularly from United States, United Kingdom and
other countries, have played a significant part in constructing the main infrastructure,
such as roads, dams and schools. As far as the negative effect is concerned, most of
these foreign firms use the accounting principles applied in their mother countries,
which might not be relevant to the local needs, due to the differences between the two
environments.
Foreign accounting education: As in the case of most of the developing countries, the
Saudi Arabia government has sent many students abroad, particularly to the United
States and United Kingdom, to gain knowledge and experience in various educational
fields including accounting and business. The influence of foreign education on
accounting in Saudi Arabia stems from the fact that, the diversity in the background of
accounting faculties contributes to the teaching of a variety of courses in accounting
principles, as well as auditing standards and procedures. The accounting systems,
methods and techniques exercised are oriented toward the accounting environment of
the country in which the degree is obtained.
According to Hells (1992), prior to the emergence of the oil sector the relatively
insignificant trade and commercial activities were dominated by small, privately- owned
firms. To the extent that accounting records were maintained at all, they were
rudimentary and on a single- entry basis. The growth of large companies and the
separation of management and ownership necessitated a change toward the more
informative Western-style accounting practices. This rapid change in accounting
emphasis in the Saudi Arabia was met first through the use of expatriate labor and
subsequently by attempting to educate Saudis, both at home and abroad. The shortage of
qualified accounting faculties is exhibited in the nationalities of the teaching staff of the
universities, so more than half of the faculties’ members are non-Saudis. The dominant
teaching groups are Egyptians and Americans and the principal source of both the
doctoral and master's degree for faculties' members has been North American, UK and
Egyptians’ universities. Thus, the accounting systems methods and techniques exercised

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are diversified and oriented toward the accounting needs and the environment of those
various countries.
The rapid growth of the Saudi Arabian economy has had a great influence upon the
accounting profession. Consumption has increased rapidly due to the rise in per capita
income from oil revenues. Exports and imports have increased, comprehensive
development plans covering all economic sectors have been undertaken and huge
amounts of money had been allocated. As a result of this huge investment, there has
been a remarkable development in the forms of business enterprises over the last twenty
years. This trend has been in the direction of establishing partnerships and corporations
instead of individual or family-owned firms. The significant growth in the number of
corporations since the early 1970s has demanded a wide range of accounting services.
Thus, the number of accounting firms which provide such services has increased
rapidly.
Government laws and regulations: The government of Saudi Arabia has enacted a
number of laws and regulations in response to the changing needs of society. Examples
of such laws related to accounting are: income tax and Zakat law, companies’ law, the
law of certified accountants and foreign investment law. An effect of these laws on
accounting development is that they have provided some basic guidelines for auditors
and together with other regulations, have improved the reliability of accounting
information. For example, the income tax and Zakat regulations required all companies
to submit their final financial statements to the Zakat income tax department after being
attested by a statutory accountant.
Saudi Accounting Association: The Saudi Accounting Association (SAA) was
established in 1982, started operation in 1983 and operates under the supervision of
King Saud University. The association engaged in work by a board of nine directors
who are elected by the association's general assembly to serve a term of three years. The
general assembly consists of all active members. It convenes in an ordinary meeting
once a year. The board of directors sets the agenda for the general assembly's meeting,
which is called by the chairman of the board. The general assembly may hold an
extraordinary meeting at the request of the chairman of the board, or may hold at the
request of one fifth of the general assembly's members. The rules of procedure for the
board's extraordinary meeting also apply to the general assembly's extraordinary

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meetings. The presence of the majority of members constitutes a quorum at a general
assembly meeting.
The objectives of the association can be summarized in the following points:
a. Development of scientific thought in the field of special assembly and
improvement.
b. Provide an opportunity for those working in the areas of concerns of the
association to contribute to the movement of scientific progress in this field.
c. Facilitate the exchange of scientific production and scientific ideas in the field of
concerns of assembly between the relevant bodies and organizations inside and
outside the Kingdom.
d. Provide advice and do all the necessary to raise the professional level of
performance of the assembly’s attention in the various institutions.
(www.Saa.org.as).
Currently, there is the Saudi Certified Public Accountants’ Regulations which was
issued under Royal Decree No. M/12 year 1992 entrusted the Saudi Organization for
Certified Public Accountants (SOCPA) to promote the accounting and auditing
profession and all matters that might lead to the development of the profession and
improve its status, through realization of the following objectives:
1. Review, develop and approve accounting standards.
2. Review, develop and approve auditing standards.
3. Establish the necessary rules for fellowship certificate examination (CPA exam.)
including professional, practical and scientific aspects of audit profession and
applicable regulations.
4. Organize continuous education programs.
5. Establish an appropriate quality review program in order to ensure that Certified
Public Accountants implement professional standards and comply with the
provisions of Certified Public Accountants Regulations and relevant by-laws.
6. Conduct special research work and studies covering accounting, auditing and
other related subjects.
7. Publish periodicals, books and bulletins covering accountancy and audit related
subjects.

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 8. Participate in local and international committees and symposiums relating to the
profession of accounting and auditing (www.socpa.org.sa).
According to Manduca (2016), all companies in Saudi Arabia, other than banks and
insurance companies, must follow accounting standards generally accepted in the
Kingdom of Saudi Arabia, which issued by the (SOCPA). Banks and insurance
companies are regulated by the Saudi Arabian Monetary Authority (SAMA) and already
required to comply with IFRS. In this regards, Fontes et al (2005) state, that since Saudi
Arabia joined the group of twenty ministers and central bank governors (G20) in 2009,
the adoption of IFRS has been viewed as an important milestone in the country’s future
economic development and has been working towards this end ever since.
As a part of the implementation of the strategic plan of the G20 to improve the quality
of financial reports, the SOCPA has approved transition plan in 2012, by which listed
entities would be required to report under IFRSs in 2017. The technical committees of
the SOCPA, worked on the possibility of transitioning to international standards,
reached decision to reconcile Saudi standards with the international standards in
accordance with a methodology that ensures taking into account the Saudi environment,
both in term of the legitimation provision or regulations adopted or the level of
technical and technical readiness of the affected parties. Moreover, to facilitate the
transition, the SOCPA has published a series of booklets in the Arabic language that
indicate the most important requirements for the preparation of financial statements
when applying international standards for the first time and explain the most important
differences between IFRS and the standards currently applied in the country
(www.socpa.org.sa).
Manduca (2016) outlines some challenges of the adoption of IFRS in Saudi Arabia,
stating that the seriousness of the shortage of qualified accountants is glaring and one
which will need to be addressed if the adoption of IFRS and the regulation by SOCPA
is to achieve the desired results. The shortage of skilled accountants in the Saudi Arabia
is partially bridged by the numerous expatriates that have moved to the Kingdom. The
Arabic language poses yet another challenge. All statutory financial statements prepared
in accordance with Saudi GAAP are required to or filed with relevant authority in
Arabic. It is expected that this requirement will continue with the transition to IFRS.
Consequently, there will be additional pressure on Arabic speaking qualified

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accountants to ensure that compliance with IFRS is, literally, not lost in translation.
Further challenges are the unique national practices of the country. Compliance with
strict local laws and Sharia law may not always be in accordance with IFRS, (e.g.
Interest rate in banks). Therefore, SOCPA may decide from time to time to amend any
IFRS requirement if it contradicts with Sharia law or local law, also SOCPA must take
into consideration the level of technical and professional preparedness in the Kingdom.
In order to see the results in the near future, extensive education is needed in schools
and universities through the targeted allocation of resources.
It seems that the adoption of IFRS currently in Saudi Arabia is started by a plan, which
facing a lot of challenges relating to the local environment factors such as: legal
framework for accounting profession, organized financial market, qualified accounting
profession, Arabic language, Sharia law, variation in the technical readiness among
different sectors and the factors related to the accounting education. Accordingly, the
absence of all or any of these factors impedes effective adoption.
Albader (2015) tested the implications of the transition to IFRS on the accounting
education in Saudi Arabia. His study reached a number of results, such as:
- There is a low level of preparedness among higher education institutions in
Saudi Arabia to transition to IFRS in the accounting curriculum.
- Generally, there is a lack of awareness of the implications of the transition to
IFRS in an Islamic environment and its implications for accounting education in
Saudi Arabia. However, there was an awareness of the need for specific
standards that address financial transactions and requirements specific to the
Islamic context (e.g. Zakat).
- There are difficulties identified related to the shortage of qualified accounting
educators with knowledge of IFRS and in the use of students-centered
pedagogical approach. Therefore, there is a need to train academics in Saudi
Arabia to prepare them for the introduction of the curriculum.
- The paucity of teaching resources that support the teaching of IFRS in Arabic
was identified.
- Language-related factors, particularly in the translation of IFRS and English-
languages abilities of academics and students, were signaled as hurdles to be
addressed in the teaching IFRS in Saudi Arabia.

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Albader (2015) concluded that there is an important role for the professional and
academic accounting bodies in the Saudi Arabia for supporting accounting academics
during the period of transition to IFRS. There is also a need to support academics in
Islamic environment to ensure that they are sufficiently prepared to incorporate IFRS
into the accounting curriculum.
3.3. Accounting practices in Libya
Libya is one of the third world countries with a small population and a vast area which
is mostly desert. Libya is bounded on the north by the Mediterranean Sea, on the east by
Egypt and Sudan, on the south and south west by Chad and Niger, on the west by
Algeria and on the North West by Tunisia. The country has been subjected to a number
of foreign powers: Turkish, Italian, British and French. During the first half of the
seventh century Libya turned to the culture and influence of Islam and the Arab east.
These two dominant elements in Libyan culture originated in this period and spread
throughout the area. Muslim religion and the Arabic language also have laid the
foundation for social homogeneity of the Libyans. Turkish domination over Libya
lasted 360 years until the Italians wrested Libya from Turkey in 1911.
According to Kilani (1988), since the growth of Islamic influence, Arabic has become
the official language in Libya and all legal documents have to be written in Arabic. This
has made a lot of difficulties for non-Arabic accountants, who wish to practice
accounting in Libya. However, the colonization of Libya by the Italians undermined this
and the Italian language superseded the Arabic language during the period from 1911
till 1945. Hence, many accounting documents, rules and procedures have derived from
those originally in Italy. Similarly Abu Zaid (2005) stated accounting profession in Italy
was transferred to Libya, mainly through Italian accountants’ who were also brought
into work in the Italian companies and in the government departments where they
applied in Libya typical accounting practices of Italy. Therefore, there is no evidence of
the existence of Libyan practices for professional auditing or any other activities during
the period of the Italian colonization. At that time the Italians fully controlled the
economic system and the Libyans were considered as citizens of the second class. As a
result, after more than three decades of occupation, when United Nation began its work
in Libya, in all over the country there were no more than sixteen university graduates in

84
1949. This enhances the view that the modern accounting practices adopted by the
Libyans during the Italian occupation were very limited.
Since independence of Libya, Arabic language has become dominant in the accounting
records, rules and procedures. This has given the opportunity for the Egyptians’ books,
teachers and accountants to influence accounting in Libya in a great deal. Another social
change which has influenced accounting in Libya is Islam and Zakat (wealth tax) and
the distribution of inheritance must be carried out in accordance with Islamic teaching.
Thus, accountants have had to incorporate such rules in their accounting practices. Also,
the chance which has been given to the Libyans to study accounting abroad (mainly in
UK and USA) influences accounting improvement, whereby British and American
accounting techniques have been adopted in Libya. Furthermore, the discovery of oil
has released new forces which did not previously exist: the willingness of Libyans to
become mobile and the entry of women into the labor market which have created a new
source of accounting manpower. Meanwhile, there has been an introduction by oil
companies and other foreign companies of new technological innovations.
The process of economic environmental changes has certainly left its mark on the
evaluation of accounting in Libya. Under Italian colonization, the Libyan economy was
primitive, mainly dependent on primitive agriculture and animal husbandry. Thus,
accounting was confined to simple bookkeeping in order to compute Zakat or income
tax. Accordingly, accounting was very weak and based on enterprise accounting rather
than government or national accounting. Masoud (2013) states that the economic
sectors during the 1950s went through a period of economic development, the
agricultural sector was poor, resulting from poor quality land, lack of water and weather
conditions. In the industrial sector, the manufacturing process was limited due to non-
availability of raw materials, lack of a skilled labor force, local market narrowness and
inability to process the product. The economy was not able to provide the necessary
investments to change the backwardness into progression.
The rapid growth of oil industry has made important demands upon accounting in
Libya. Therefore, consumption, investment, savings, income, import, export,
development planning, expansion of industry, agriculture and other services, have all
increased as a result of income generated by oil exports and all of these activities need
better accounting. However, Libyans have not been able to provide an important level

85
of accounting and have had to rely on foreign help to provide accounting services and to
train Libyans to provide these services themselves. Therefore, foreign accountants,
accounting firms and teachers have been needed to fill the gap. Companies and
individual traders were required to keep proper accounting records and to prepare
financial statements. The government has a need to prepare administrative, as well as
development budgets, also national income accounts and balance of payments have
been required. Accordingly, firms have started auditing business companies and the
auditor general's office was established to audit government departments and
enterprises. Also accounting education has started and students are being sent abroad to
learn accounting. All in all, the economic environmental change has led to the
development of the accounting discipline in Libya (Kilani, 1988).
Libyan Commercial Code (LCC): According to Kilani (1988), one of the main dogmas
of the people's authority is that the wealth of the country should be under the control of
the people. This principle was translated operationally into the takeover of all private
sector businesses that were superseded by 60 large establishments owned and fully
controlled by the state. Additionally, there were large multinational corporations doing
business in Libya. The law 65 of 1970 for commercial companies has specified which
foreign companies may be permitted to setup branches or operates in Libya for a
renewable period of five years. These companies must be engaged in the following
activities:
a. Consulting engineering.
b. Technical activities supporting oil and gas producing companies.
c. Other sectors that may be determined by the decisions of general people's
committee (formerly the council of ministers).
Kilani (1988) looked at the Libyan commercial code (LCC) and income tax laws and
summarized their influence upon accounting. Articles from 58 to 64 of the LCC concern
required merchants accounting records, which are prescribed by law as follows:
1. The journal, which should include all transactions related in any way to the
merchant's day to day business activities and should also include a monthly total
of amounts spent on personal or family expenses.

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 2. The inventory and balance sheet book, which must include a copy of the
inventory statement, balance sheet and profit and loss account at least once a
year.
Article 59 states that every merchant must maintain in special files, copies of letters
received or sent in relation to his business activities, in addition to records mentioned in
paragraphs 1 and 2.
All of these books and files must be kept free from blank spaces, marginal notes
erasures and insertions between the lines. The law also requires that the records must be
bound, have numbered pages and before being used must be presented to be signed by
an official from the court. This involves stamping all pages of the books regarding its
content and all books must be kept for five years (Article 60). The law has given these
records to be used as evidence in court as long as they have been kept according to the
conditions stated by law (Article 62).
In addition to maintaining these books and files, corporations must keep the following
records according to the LCC:
1. Register of shareholders, which should contain the name and family name of
shareholders, the number of shares for each shareholder and all changes to
which the shares may be subject.
2. Register of bonds, which should contain issued bonds, liquidation bonds, the
name and the family name of holders and all changes to which the bonds may be
subject.
3. Register of the minutes of general meetings, which should contain the details of
shareholders general meetings and their resolutions.
4. Register of the minutes of the board of directors meetings and their resolutions.
5. Register of the minutes of the committee of controllers and their resolutions.
6. Register of the minutes of executive committee meetings.
7. Register of the minutes of loan bonds board meetings and its resolutions, if the
company has issued loan bonds.
According to law, all of these registers must have serial numbers and should be
approved annually. Neither the LCC nor the tax laws define the methods of recording in
these registers or books.

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When income tax was first introduced in 1923, accounting was at its starting point in
Libya, which put a heavier burden on tax laws and provisions in terms of devising
forms and designing guidelines, to help tax payers (especially small ones who have
represented the vast majority of tax payers in Libya) in book keeping and preparation of
tax returns. Later in 1960, when Libya economic conditions improved rapidly by the
discovery of oil and by the introduction of big foreign companies into the country, the
accounting profession grew and more reliance was placed on available accounting skills
to design and maintain proper accounting records, which catered for taxpayers
individual needs, as necessary step towards compliance with the tax laws. However, the
maintenance of accounting records is only prevalent in big corporations in Libya.
The various income tax laws were an attempt to encourage taxpayers to keep proper
accounting records and at the same time, to promote the tax services offered by
accountants. It is a common rule in Libya that tax returns are considered correct when a
chartered accountant certifies the correctness of the accounting records, from which
returns are prepared. It is common in Libya that some companies prepare two different
sets of financial statements: one for the purpose of tax and another for the company’s
own purposes.
Therefore, income tax laws have played a vital role in the evolution of accounting in
Libya and have been one of the most influential factors in shaping accounting
profession during the early stages. As Abu Zaid (2005) stated, the significant effect of
tax laws on accounting in Libya seems clear from the encouragement of Libyan tax
payers to keep accurate accounting records, monitored through the following
procedures:
1. If the company does not keep correct accounting records, the taxable income can
be over appreciated by the official of taxes.
2. The complaints from any company concerning the estimated taxes are not
accepted unless they are backed up by correct and accurate accounting books
and records.
3. Each person responsible for the management of the company that fails in
keeping the required accounting records must pay financial penalty up to a
thousand Libyan Dinar.

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 4. Anyone who is preparing incorrect accounting books, records, reports or budget,
may face penalty of one year in prison, or financial penalty beginning from 500
Libyan Dinar, or the two penalties, in addition to pay financial compensation.
However, it was difficult for merchants and some companies to understand the
requirement of the LCC, in order to respond to it. On the other side, the state was
focused and depended mainly on the taxes as a basic resource. Therefore, those
merchants and companies tried to avoid the over appreciated taxes and penalties, by
inviting the public accountants to help them in keeping accurate and correct accounting
books and records. This attitude has a significant effect on the development of
accounting in Libya, because the financial statement which has been audited by public
accountant surely will be accepted by the board of taxation without any changes. Abu
Zaid (2005) concludes that the response to the laws was one of the basic reasons to
prepare accounting records in many companies and in the situation of absence of
generally accepted accounting standards and principles, the tax laws and LCC had
become important references and evidences in Libya.
Accounting profession in Libya
As already mentioned, since the early 1960s Libya has become an oil exporting country,
the economic development plans have begun. Also, the businesses in both private and
public sectors have developed. Accordingly, investors, creditors and managers, as well
as government agencies, need more reliable information in order to make vital decisions
relating to their economic activities. Parallel with this rapid growth more and more
accounting services were needed and, as a result, more international accounting firms
(American, British, Egyptian and Italian), as well as Libyan firms, have started
businesses in Libya. By virtue of this fact, the role of the accounting profession has had
to be recognized. So since the early 1960s, it had become necessary to get a license
from the Ministry of Finance to practice as an accountant in Libya. Any individual with
university degree in commerce and two years' experience in accounting had the right to
become a public accountant. Because of these easy requirements for granting a license
(no control, no standards and no code of ethics), most of the licensed accountants
practiced the profession on a commercial basis rather than on an ethical professional
basis. Due to this disorganized state of accounting profession, every auditor general
annual reports in Libya since early 1970s, emphasized the need to organize the

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accounting profession in the country. As a result, law No 116 of 1973 was enacted to
organize the Libyan accounting profession and established the Libyan Accountants and
Auditors Association (LAAA) (Kilani, 1988).
Abu Zaid (2005) looked at article 3 of law No 116 and numerated the association's
objectives in the following:
1. To organize and improve the conditions of the accounting profession and to
raise the efficiency of accountants and auditors professionally, academically,
culturally and socially.
2. To organize conferences and seminars and to participate in such conferences and
seminars internally and externally and to follow up the improvement of
accounting science.
3. To establish assistance and pension funds for its members.
4. To increase cooperation among the members and to protect their rights.
5. To penalize those who violate the traditions and ethics of the profession.

With the object of maintaining the auditor's independence, law No 116 article 25
prohibited the auditor for combining his status as a public accountant with certain
activities, such as:
1. A ministerial position
2. Any public post, permanent or temporary, with salary or compensation ( unless
he was permitted to do so according to the provision of this law)
3. Any commercial activities.
4. All other activities which are not compatible with the profession.
Furthermore, it is illegal for the members of the organization to advertise the accounting
profession and all members of the organization are required to meet all obligations that
may be imposed on them by law and by the ethics of the profession (article 49).
In his attempt to measure the professional competence of the public Accountant in
Libya, Kilani (1988) stated that for any public accountant to be competent and real
professional, he has to strive to improve the quality of his services and to observe the
profession's accounting principles, auditing standards and rules of conduct. However,
such principles, standards and rules do not exist in any formal way in Libya. Hence, the
competence of the Libyan public accountant is measured by his education,

90
qualifications, his experience and his regulation in the business community. In order to
enhance any of the above mentioned factors, a public accountant has to keep in touch
with new accounting periodicals and attend seminars and discussion groups. These are
particularly important in the case of Libya because there is no formal continuing
education. Since there is no mandatory requirement for continuing education in Libya,
one may ask whether Libyan public accountants are participating in any other activities
such as research, seminars, conferences or following recent developments in the
profession through accounting publications to improve the status of the profession and
that of the members themselves? The answer is 'No'. This may be explained by the fact
that most of the public accountants in Libya know little English language and that there
are very few accounting periodicals written in Arabic.
In the same line, Abu Zaid (2005) asserted that, although the basic objective of the
LAAA is development of accounting profession in line with the needs of Libyan
environment, the reality shows that the association keeps the external effects through
the limited role in developing the local standards as an alternative to the western
regulations. Hence, the development of accounting was affected by a lot of factors that
facilitate the following of the same steps which were use in UK and USA. Moreover,
most of the international companies in the country were from UK and USA.
Additionally, the accounting education and universities’ professors in Libya were
mostly affected by the British and American accounting. As a result, there is an absence
of any scientific activities to develop accounting and accounting education in line with
the local environment. Also, there is no journal issued by the association to develop the
accounting practices or to develop local principles and standards or even consensus on
foreign or regional standards.
Regarding usefulness of the adoption of IAS/IFRSs in Libya, Masoud (2014) suggests
that increasing the level of comparability and providing more reliable, accurate,
transparency and valid quality of financial accounting information will improve the
quality of financial reporting and the level of disclosures. Hence, the change from local
accounting standards to IAS/FRS adoption is not an easy task as some might think,
since if we are to succeed. In many countries the gap between local accounting and
IFRS standards is very big in short run. Therefore, this change comes at a time when the
IFRS themselves are going through major changes to address issues identified by users

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of the standards and to cover certain weakness of its accounting infrastructure, that were
previously not passably addressed by standards. However, the practice of implementing
IAS/IFRSs in Libya will face several obstacles including lack of technical skills,
training and inadequate knowledge of Libyan professional accounting, on the other
hand there is a difficulty to develop it existing accounting systems, disclosure reports
and the regulatory framework to cope with economic and social development and
reducing the gap between the local environment and IFRS. The following were
identified as the most significant of these limitations and obstacles:
- Taxation: The adoption of IAS/IFRS will create problem. According to Hung and
Subramanyam (2007), IFRSs are independent of tax reporting considerations. As such
presents an obstacle for implementing of IFRS in Libya.
- The weakness of financial reports and appropriate auditing standards within deficiency
of national accounting system.
- The weakness of public awareness frameworks of the role of investment and the role
of the stock market in the whole economy.
- Libyan privatized companies were valued by unfair evaluation techniques due to the
loss of basic trading information.
- Lack of efficiency and development of technical skills and inadequate knowledge of
the Libyan professional accountants to be understandable in order to adopt a key
feature of the new applicable IFRS models.
According to Zakari (2014), the emerging economics face challenges if they want to
implement IFRS. Libya, as one of many emerging countries, didn’t adopt IFRS yet and
faces challenges of culture, regulation, transparency and fraud, all of which threaten to
damage the process of the implementation of IFRS. Similarly and with wide
demonstration, Laga (2012) identified many obstacles prevent Libya from the adoption
of IFRS and also suggested some steps should be taken by Libya to overcome such
obstacles. The obstacles include:
- Lake technical skills and inadequate knowledge of Libyan professional
accountants: As admittance requirement to full membership of the LAAA does
not require any study beyond a bachelor’s degree, but only practical experience,
after becoming a member of the LAAA no continuation of professional training

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 is required. As a result, firms normally do not conduct any training programs for
their accounting staff.
- Some impediments related to accounting education: In the Libyan context, the
most impeding factors being the outdated curriculum and lack of appropriate
learning materials, these make the students’ background in applicable modern
accounting and auditing standards is very weak. Also, accounting lectures lack
the experience and adequate comprehension to teach either theoretical or
practical aspects of IFRS.
- Inconsistency of existing laws and regulatory frameworks of accounting in
Libya with recent development of accounting profession: In Libya, as in its
several counterparts in the rest of the world, there are number of laws issued and
promulgated to regulate the accounting practices. Despite some of these laws
provide detailed guidelines on how to prepare accounting records and financial
statements, however, they don’t specify what accounting principles should be
followed. As consequence, the process of implementing IFRS maybe
inconsistency with existing laws and regulations (e.g. taxation laws).
- Weakness of professional accounting body: While the LAAA have existed to
manage, organize and improve every aspect of accounting and auditing
profession, in practices the LAAA has inadequate ability to monitor and enforce
accounting and auditing requirements’. As consequence, accounting practices
have been left to accounting and auditing firms, based on different rules and
standards. Due to this, many accounting issues were not been considered, which
created a wide gap between practices and regulation. Furthermore, there is also
inability to improve the knowledge gap through following recent developments
in accounting and auditing profession.
The steps that should be taken by Libya to overcome these obstacles, according to Laga
(2012), are:
- Adequate professional education and training: The prescribed curriculum for
education and training of professional accountants should be revised to enable
students to gain exposure to international developments in the profession,
including IFRS applications.

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 - Strengthen professional accountancy body (LAAA): Take necessary steps to
strengthen the ability of LAAA to monitor and enforce accounting and auditing
requirements’, improve the main entry requirement to LAAA and to be in the
line with international requirements. Therefore, LAAA should be empowered to
improve the status of the profession, through following recent developments in
the profession. Also, raising public awareness of professionals, including
regulators, prepares auditors and investors, in order to ensure that professionals
comply with provisions provided by the existing laws and to be kept with
abreast of the international developments in the profession.
- Review consistency of existing laws and regulations’ framework of accounting
in order to bridge the gap between accounting information needs within the
country and the accounting information provided by the existing accounting
system. Therefore, the existing laws and regulations framework should be
amended to reflect economic and social reality and to avoid contradiction with
recent development in accounting profession.
3.4. Comparative outlook
Before making such comparison, it should be noted that the origin of each country's
accounting system has had a great influence on the accounting policies of these selected
countries, in addition to other factors which are mostly common in the region.
All the selected countries (except Saudi Arabia) were former British colonies. Egypt
and Libya were dominated by France and Italy respectively, but this influence was
followed by British influences. Therefore, accounting in these countries is more affected
by English accounting structure. Saudi Arabia has never been under colonial power, but
it was strongly affected by foreign companies from USA and UK and also affected by
Egyptian accounting education, which is a copy of the British accounting education and
practices. The Sudanese accounting practices had the same origin as Egyptian
accounting because they were both under British rules. Additionally, Sudan is also
affected by Egyptian education. Therefore, there aren’t a lot of differences in the origin
of accounting which can be clearly reflected in accounting practices in the region. All
the differences that are seen now are a result of the level of development in the
accounting profession and accounting education in the country. Also, the accounting
practices in the region can be affected by a lot of factors, particularly by the tax

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authorities and commercial laws, in addition to the domination of government on these
laws.
Tax computation: According to Hells (1992), tax computation procedures are almost
similar in all compared legislations. The tax department in each country has established
its own rules in checking declared tax liabilities and giving some importance to the
external auditor who checks these declarations. The accounting firms' views are not
recognized in tax conflicts. Although such role exists theoretically in all legislations,
practically tax authority in each country determines the accountant’s role in tax
enforcement.
In the selected countries, including Sudan, tax rules have a significant effect in
accounting practices, because some companies just prepare the records to be in
compliance with taxation laws. As it was previously said, in Libya income tax laws
have been the most influential factor in shaping the accounting practices. Similarly, in
Saudi Arabia income tax and Zakat regulations required all companies to submit their
financial statements to the Zakat income tax department after being attested by a
statutory accountant. In Egypt, the foundation of a tax committee within the accounting
body (ESCAA) and the promulgation of tax accounting guidelines were good features
of such regulation. Therefore, it is clear that Egypt is more developed than the other
Arab countries because the tax committee is in the accounting body. That means the
government domination in the tax rules is limited, in comparison with the other selected
countries, which increases the role of accounting profession in Egypt, more than in
other countries.
There are a lot of other factors that influence the accounting practices in the selected
countries. The influence of historical period of colonial and tax law are already
discussed above and the other factors of influence will be discussed as in the following
text.
Socio environment: All the selected countries including Sudan have similar social
behavior, region and language. The societies in these countries tend to be collective
more than individual, which has a negative effect on the profession, according to Gary
(1988) assumptions.
Government domination: It is clear that in all these countries, including Sudan, the
government dominates the accounting practices, because accounting works under the

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government laws. Therefore, the main purpose of issuing financial statements is to
comply with the requirement of laws. This domination has led to the weakness of
accounting profession bodies in these countries. Government dominating is either
because of the lack of qualified professional bodies or because the professional body
does not have the authority that would enable it to issue professional standards and code
of ethics. Only the Egyptian Society of Accountants and Auditors (ESAA) plays a
central role in the development of accounting and auditing professions within Egypt,
because this association of chartered accountants develops educational and professional
standards (Egyptian Auditing Standards (EAS)).
Accounting education: We have to take in account the effect of universities and their
curricula in accounting practices in these countries. The majority of universities in the
area, however, were created on the pattern of the Egyptian universities system, which in
turn is a version of British model. Graduates of these institutions are well versed in
accounting procedures practiced in the USA and UK. In all selected countries, the
accounting education ignores the teaching of curriculum related to IFRS application.
The adoption of IFRS: There is a variation among the selected countries, regarding the
adoption of IFRS. Although there is no full adoption of IFRS in all selected countries,
there are different steps toward it. There are great strides have been made toward the
adoption of IFRS in Egypt. The new EAS were prepared on the basis of IFRS, except
for some departures and adaptations, because the preparations of financial reports refer
to IFRS in cases where EAS does not address specific issues. This lead to the fact that
EAS differed from IFRS in four areas: financial statements presentation, fixed assets
and depreciation, disclosure in financial entities and rules and accounting standards
relating to finance lease transaction. Therefore, one can states, Egypt adopted the IFRS,
but according to its particular reality. Saudi Arabia is the second country from the
selected countries that made some steps toward the adoption of IFRS. The SOCPA
approved an IFRS plan, called the SOCPA project for transition to international
accounting and auditing standards. Under this convergence plan all listed companies are
required to adopt the IFRS for financial year 2017. In the evaluation of the SOCPA
plan, the evidence tell that there is less has been done in the preparedness to transition
toward IFRS in Saudi Arabia, because of many obstacles mentioned previously. Libya
does not adopt the IFRS yet, because of a lot of obstacles (mentioned previously).

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Sudan is far from the adoption of IFRS this is according to World Bank (2010), which
states that, in Sudan, “with the exception of banks and insurance companies, which are
required to follow Islamic accounting standards, there is no legal mandate for other
corporate entities to follow IFRS or any kind of standards in preparation of financial
statements. There is no legal requirement in Sudan to follow ISA or any other auditing
guidelines in conducting audits”
All the selected countries face many challenges in the adoption of IFRS, because IFRSs
have been developed by the International Accounting Standards Board IASB, without
any consideration to the differences in socio- economic and political environments
among different countries. Moreover, there is a need to strong regulatory bodies to
enforce and supervise the implementation of IFRS. In fact, the regulatory bodies in most
developing countries, including Arab countries are very weak to do this function.
Therefore, unless the regulatory bodies have enforcement and supervise mechanisms,
the adoption of the IFRS will be partial, imperfect and limited or even absent in some
countries.
The major findings of this chapter can be summarized as follow:
1. All Arab countries were affected by accounting practices of USA and UK, either
directly (as in the case of Egypt) or indirectly through depending on Egyptian
accounting education and profession.
2. The accounting profession in Egypt has significant impact upon the accounting
practices in the country, in comparison with the effect of accounting profession
in other countries.
3. Most private companies in the region follow accounting methods similar to these
used in UK or USA, because most of the accountants working in those
companies are either graduates from these countries or from Egypt, or gained
their experience by working in foreign companies.
4. Economic statuses are different among the concerned countries. Saudi Arabia
and Libya are oil countries, while Sudan and Egypt are not. This has an impact
on accounting practices in those oil countries because of the growth in the
economy, which opened the door to the foreign companies to enter and bring
their investment into those countries. The foreign companies brought their own

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 accounting practices and this is the reason why the selected countries are
affected by the British accounting practices more than by other colonial powers.
5. The economic status is not significant factor that can affect the adoption of IFRS
among the selected countries, because the two countries which have made
advance steps in the adoption of IFRS are: Egypt (Non-oil Country) and Saudi
Arabia (oil country). Also the two countries which have not adopt IFRS yet are
Libya (oil country) and Sudan (Non-oil country).
.

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 CHAPTER FOUR
AN EMPIRICAL STUDY ON THE CURRENT ACCOUNTING
PRACTICES IN THE SUDAN

This chapter aims at processing and analyzing the data collected through two
questionnaires by using the appropriate statistical methods. It also seeks to clarify the
attitudes and opinions of the respondents (accountants, professors and regulatory
bodies) regarding the state of financial reporting in Sudan, to compare the results and
test the hypotheses and analysis different financial reporting practices in Sudanese
companies. In order to achieve these aims, this chapter is divided as follows:

Theme one: The general framework of the study

Theme two: Attitude of accountants about financial reporting in Sudan

Theme three: Academic view about financial reporting in Sudan

Theme four: Attitude of regulatory bodies about financial reporting in Sudan

Theme five: Analysis of different financial reporting practices in Sudanese companies

4.1. The general framework of the study

This part aims to define the steps that were followed for the sake of carrying out the
empirical study. These steps were determined in the following:

I. Objectives of the study: The objectives of the empirical study are to examine the state
of financial reporting in the Sudanese industrial companies, as well as to provide
background information about accounting practices in Sudan. In addition to that, it
seeks to critically assess the effectiveness of accounting reporting and the factors that
affect accounting practices in the country. Moreover, this study aims to determine the
obstacles that hinder the development of accounting in Sudan and suggests proposals to
improve the financial reporting and accounting practices as a whole. Specifically, this
study aims to achieve the following objectives:

1. To study the state of financial reporting in Sudan and identify the major historical,
cultural and economic factors that affect the current accounting practices in the country.

99
2. To explain the problems that influences the financial reporting practices in Sudan
from different perspectives.

3. To ascertain whether financial reporting in Sudan providing information that is

capable to serve the needs of various stakeholders.

4. To propose ways to improve the current practices of financial reporting in Sudan in

order to be more effective in satisfying informational needs of different users.

II. Environment, population, and sample of the study

There are two environments of the study. The first environment is the Sudanese
industrial companies. This environment was chosen for the study because of the big size
of the industrial sector in Sudan in comparison with other sectors, except the agriculture
sector. Also, the industrial sector has a large number of employees and has an impact on
increasing the GDP, taxes, capital investment and value added.

The second environment is the Sudanese universities and institutions. This environment
was chosen for the study to clarify the view of academics in Sudan about financial
reporting and the effect of accounting education in the accounting practices in the
country. This study will be performed in order to be sufficiently knowledgeable because
their views cannot be ignored since they are the instructors of the future Sundanese
accountants.

The population of the study is represented from two distinct categories: the financial
managers and the auditing directors in the Sudanese industrial companies and the
professors in the Sudanese universities and institutions.

Because the population includes two distinct categories, the sampling frame has been
organized by these categories into separate sample. Each one has been then sampled as
an independent sub-population, out of which individual elements can be randomly
selected.

Since the number of members within the population was not known, the appropriate
sample size for the sake of this study has been calculated by the following formula:

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N = z 2 P (1-P)
M²
Where:
N: the required sample size
Z: value statistic for level of confidence (eg: 1.82 for 93% confidence level)
M2: margin of error at .07 ( + 7%)
The sample size according to the previous equation therefore equal:
N = ( 1.82)2 * 0.5 * 0.5 = 169
(0.07)2
The study has followed the approach of selecting different sample sizes for each one of
the sample in the studied population. Since there is no consideration has been given to
the size of the sample, the study determined the number of elements for each sample, to
be selected in accordance with Simple Random Sampling (SRS) technique. (Kumar,
1996)

For collecting the data 172 questionnaires were distributed from questionnaire (A) for
86 companies under study all over the country. After a period of time, a number of 142
valid forms were retrieved from distributed questionnaires. From Questionnaire (B), 56
forms were distributed and after a period of time, a number of 50 valid forms were
retrieved from the distributed questionnaires. Table (4.1) illustrates the number of
distributed, received and missing questionnaire forms for each model:

Table (4.1)
The distributed, received, valid and missing questionnaires

Questionnaires Distributed Received Valid Missing

Questionnaire (A) 172 150 142 30

Questionnaire (B) 56 50 50 6

Source: prepared by the researcher (2017)

By virtue of the table (4.1), the missing percentage is 17.4% of the total distributed
questionnaire from model (A) and 12% from model (B). This percentage consisted of
non-received and invalid questionnaires.

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III. Data collection. In order to collect data from far distances in Sudan, the decision
was made to collect data through designing two samples of questionnaires:

A. For financial managers and auditing directors in industrial companies.

B. For the academics taught accounting in the Sudanese universities and
institutions.
Also, data was collected through direct interview with regulatory bodies and some
academics and experts. The questionnaires have been designed to measure the attitudes
of respondents towards the state of financial reporting in Sudan, because the attitude is
an important concept that is often used to understand and predict people's reaction to an
object or change, and how behavior can be influenced.

According to Kothari (2004), the merits claimed on behalf of the questionnaire are as
follows:

a. There is low cost even when the universe is large and is widely spread
geographically.

b. It is free from the bias of the interviewer: answers are in respondents’ own words.

c. Respondents have adequate time to give well thought out answers.

d. Respondents, who are not easily approachable, can also be reached conveniently.

e. Large samples can be made use of and, thus, the results can be made more
dependable and reliable.

The questionnaire has also been chosen because it is considered to be the most flexible
of tools and possesses a unique advantage over others in collecting both qualitative and
quantitative information (Singh, 2006).

In this study, the questionnaires were first designed in English, then translated into
Arabic language, which is the language spoken and written in Sudan. Before the final
typing of the questionnaires, the early drafts were reviewed by several Professors in
Gezira University and Gadarif University in order to reduce bias as well as to correct
any possible mistranslation and to make sure that the Arabic versions were consistent

102
with the original English versions. All these efforts and other were done to minimize
nonresponse to the questionnaires.
Approximately three months were spent in the preparation of the questionnaires and
four months in distributing and collecting them. This task was extremely difficult in
Sudan, because the universities and industrial companies are located in different
locations throughout the country. In this study several steps were taken to minimize
nonresponse such as: every effort was made with the supervisor to keep the
questionnaires simple and understandable. The questionnaires included the following
questions:

Questionnaire (A) consists of three groups of questions:

First group includes 3 personal questions and involves: academic qualification, the
county from which the most recent degree was obtained and the years of experience.

Second group includes 18 questions about the accounting system in the company and
the methods and rules used for financial reporting.

Third group includes 18 questions about the accounting system and accounting practices
in the country as a whole, challenges of accounting and proposals for improvement.

Questionnaire (B) consists of three groups of questions:

First group includes 4 personal questions that involve: academic qualification, the
country from which the most recent degree was obtained, the current scientific category
in the academic job and the years of experience in teaching accounting and auditing.

Second group includes 3 questions about the accounting education in Sudan

Third group: includes 18 questions about the accounting system in the country as a
whole and challenges of accounting and proposals for improvement.

Logging and tracking data: For logging and tracking data collection and entry, “in this
age of computers” it might be considered inefficient and impractical not to take
advantage of one of the many available computer applications to facilitate the process
{Marczyk et al. (2005)}. Therefore, in this thesis the data collected through the

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questionnaires have been keyed into Microsoft Excel and SPSS software packages
which then have been used for data analysis.
These database programs have allowed the researcher to define the ranges, formats and
types of data that have been accepted into certain data fields. These databases have
made it impossible to enter information that does not meet the preset criteria. Defining
data entry criteria in this manner has prevented many errors and it has substantially
reduced the time spent on data cleaning”, {Marczyk et al. (2005)}.

IV. The statistical methods used in describing and analyzing the data

A. Descriptive statistics
The descriptive statistics have been used by the researcher to describe the data collected
in the research and accurately characterize the variables under observation within
specific sample, {Marczyk et al (2005)}. This thesis has calculated measures of central
tendency mean and measure of standard deviation. For the questions with a linear,
numeric scale (Likert scale), it is feasible to calculate the types of descriptive statistics,
such as the frequency distribution, the mean and standard deviation. For the questions
without linear and numeric scales (nominal data), the percentage frequency distribution
is an acceptable indicator.

B. Testing Cronbach Alpha (α) for reliability

The internal consistency concerns the reliability of the tested components. Internal
consistency measures within the instrument and questions about how well a set of items
measures a particular behavior or characteristics within the test. For a test to be
internally consistent, estimation of reliability are based on the average inter correlations
among all single items within a test. The most popular method of testing for internal
consistency in the behavioral sciences is coefficient alpha, which was popularized by
Cronbach (1951), who recognized its general usefulness. (Drost, 2011)

The Cronbach’s Alpha is usually used to measure the reliability of the instrument.
Cronbach Alpha estimate tells us how highly the items in the questionnaire are
interrelated. The Cronbach alpha coefficient ranges from 0 to 1, with a minimum of 0.6,
while other studies suggest that everything above 0.7 suggest high levels of internal
reliability (Hair et al, 2006). Nunnaly (1978) suggested that an alpha value of 0.7 is

104
 acceptable. Hence, when the value of Cronbach alpha coefficient is Zero, it indicates the
inexistence of absolute link between the responses of the sample’s items, but when the
value of Cronbach alpha coefficient is one, it indicates that there is a full link between
the responses of the sample items.

For the sake of testing the reliability of responses of the two sample’s items on the two
questionnaires (A & B), Alpha coefficient has been used. It is found that the values of
Cronbach Alpha coefficient for each group of terms in the two questionnaires are
depicted in the following table:
Table (4.2)
The results of Cronbach Alpha (α) test for reliability
Number Value of Cronbach Value of Cronbach
Group of terms of items Alpha (α) Alpha (α)
questionnaire(A) questionnaire(B)
1.The suitability of the existing accounting principles and 2 0.78 0.77
auditing procedure
2.The environmental factors influencing financial reporting 7 0.84 0.83
practices and development in Sudan
3.The potential reasons for the an inappropriate accounting 5 0.85 0.90
information for the local users which providing by accounting
system in Sudan
4.Suggestions for improving financial reports in Sudan 6 0.86 0.86

5.The difficulties that limit the adoption of IFRS in Sudan 8 0.83 0.82

6.The benefits that may be obtained from the adoption of IFRS in 4 0.91 0.88
Sudan
7.The current activities of the accounting profession in Sudan 5 0.82 0.89

8.The role of the academic institutions in improving the 7 0.74 0.82

accounting profession in Sudan
9.The accounting practice challenges in Sudan 9 0.88 0.83

10.The essential items to the improvement of accounting practice 7 0.82 0.85

in Sudan
11.The methods and means by which government could improve 6 0.82 0.80
accounting in Sudan
12.The reasons of inadequately prepared of accounting graduates 6 -- 0.85
from the Sundaneses Universities and institutions
13.Means and polices to develop accounting education in Sudan 4 -- 0.71

Source: prepared by the researcher (2017)

105
Based on table (4.2), there is high level of reliability in the two questionnaires, because
the values of Cronbach Alpha for each group of items in questionnaire (A) are ranging
between 0.74 and 0.91. Also, in questionnaire B, the values of Cronbach Alpha are
ranging between 0.71 and 0.90. In the two questionnaires, the values are mostly bigger
than 0.80, which indicates the presence of a strong link among the responses of the
samples’ terms or expressions on each group. This increases the reliability of the results
that will be obtained.

C. Relative distribution

The relative distribution is a method used to describe the nature of the response of the
sample’s items on a given question. Hence, if the measurement used is Likert quintuple
measurement, the description is made as follows:
Statement Scale value
Strongly agree 5
Agree 4
Don’t know 3
Disagree 2
Strongly disagree 1
Hence:

1. If the rate of response of the sample’s items was high in (strongly disagree) and
gradually decreases with the rise of the degree of agreement, it refers to the fact that the
degree of agreement is very low.

2. If the rate of response of the sample’s items was high in (disagree) and gradually
decreases with the rise and decrease in the degree of agreement, it refers to the fact that
the degree of agreement is low.

3. If the rate of response of the sample’s items was high in (don’t know) and gradually
decreases with the rise and decrease of the degree of agreement, it refers to the fact that
the degree of agreement is medium.

106
4. If the rate of response of the sample’s items was high in (agree) and gradually
decreases with the decrease and rise of the degree of agreement, it refers to the fact that
the degree of agreement is high.

5. If the rate of response of the sample’s items was high in (agree) and gradually
decreases with the decrease of the degree of agreement, it refers to the fact that the
degree of agreement is very high.

D. Mann Whitney statistical test has been adopted by the researcher as appropriate
technique to test the differences in perceptions between both accountants and
professors.

4.2. The attitude of the accountants about financial reporting in Sudan

In the introduction of this section it is important to present the characteristics of the

sample of the accountants practicing accounting in the Sudanese industrial companies.

Table (4.3) illustrates the frequencies and percentage distribution of the respondents
regarding the academic qualification, as shown in figure (1) which represents the
relative percentage distribution of this case.

Table (4.3)
Frequencies and percentages of the respondents regarding the academic qualification

Academic qualification Frequencies Percentages

Technical Diploma or lower 10 7.0

Bachelor degree 91 64.1

Master degree 40 28.2

Doctoral degree 1 0.7

Total 142 100

Source: prepared by the researcher (2017)

107
 70 64.1

60

percentage 50

40
28.2
30

20

10 7
0.7
0
technictechnical Bachelor degree Master degree Doctoral degree
deploma or lower
Level of education

Figure 1: Distribution of the respondents by the academic qualification

Source: Prepared by the researcher 2017
Table (4.3) and figure (1) show that the academic qualification of most respondents are
bachelor degree which represents 64.1% of the total sample, followed by those whose
academic qualifications are master degree which represents 28.2% of the total sample,
then those whose academic qualifications are technical diploma or lower subsequently
follows, which represents 7% of the total sample. There is only one respondent who
have a doctoral degree and represents 0.7% of the total sample. It appears that most of
the respondents (93%) hold university qualification, which is higher than technical
diploma. This is considered as being a positive indicator of the correctness of the
obtained data.
Table (4.4) illustrates the frequencies and percentage distribution of the respondents
regarding the specialization, as shown in figure (2), which indicates the graphic
representation of the relative percentage distribution of this case.
Table (4.4)
Frequencies and percentages of the respondents regarding the specialization
Specialization Frequencies Percentages

Accounting 115 81.00

Management 14 9.86

Economics 9 6.33

Other 4 2.81

Total 142 100

108
 90%
81%
80%
70%
60%
percentage

50%
40%
30%
20%
9.86%
10% 6.33%
2.81%
0%
Accounting Management Economics Other
Specialization

Figure 2: Distribution of the respondents by Specialization

Source: Prepared by the researcher 2017
From table (4.4) and figure (2) it appears that the specialization of 81% of the total
sample is accounting, while 9.86% of the total sample specialization is management
followed by 6.33% of the total sample whose specialization is economics. Remaining is
those that are not specialized or have not obtained any university’s academic
qualification, which represents 2.81% of the total sample. Since 81% of the respondents
are specialized in the field of accounting, it gives significance to the obtained data and
makes the results more objective.
Table (4.5) illustrates the frequencies and percentage distribution of the respondents by
country of formal education. This is also shown in figure (3), which indicates the
graphic representation of the relative percentage distribution of this case.
Table (4.5)
Frequencies distribution and percentages of the respondents by country of formal education
Country of formal education Frequencies Percentages

Sudan 137 96.5

Another Arabic country 0 0

UK or USA 5 3.5

Total 142 100

Source: prepared by the researcher (2017)

109
 100.00% 96.50%

90.00%
80.00%
perecentage 70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00% 3.50%
0% 0%
0.00%
The Sudan Another Arabic UK or USA Other
country
Country of formal education

Figure 3: Distribution of the respondents by the country of formal education

Source: Prepared by the researcher 2017
From table (4.5) and figure (3) it appears that 96.5% from the total sample obtained
their formal education from Sudan, followed by those who obtained their formal
education from UK or USA, which represent 3.5% of the total sample. There is no
respondent whose country of formal education is another Arabic country or any other
country in the world.

Table (4.6) illustrates the frequencies and percentages of the respondents according to
the years of experience, as depicted in figure (4), which illustrates the graphic
representation of this case.

Table (4.6)
Frequencies distribution and percentages of the years of experience
Years of experience Frequencies Percentages

Less than 5 years 22 15.5

From 5 to 10 years 21 14.8

More than 10 years 99 69.7

Total 142 100%

Source: prepared by the researcher (2017)

110
 80
69.7
70

60

50
percentage

40

30

20 15.5 14.8

10

0
less than 5 years from 5 years to 10 years more than 10 years
years of experience

Figure 4: Distribution of the respondents by the years of experience

Source: Prepared by the researcher 2017
Table (4.6) and figure (4) appear that 69.7% of the sample study are those whose years
of experience is more than 10 years, followed by those whose years of experience is less
than 5 years (represent 15.5% of the total sample), followed by those whose years of
experience is from 5 to 10 years (represent 14.8% of the total sample). It also appears
that 84.5% of the respondents have experience more than 5 years. This is a positive
indicator, since the existing skills, specialization and academic qualification of the
sample population should increase the accuracy and objectivity of the obtained data.

The suitability of the existing accounting principles and auditing procedures

Most of the respondents (80.3%) of the total sample study admit that there is no General
Accounting Accepted Principles (GAAP) in Sudan and there is need to implement these
principles in the country. Since most of the respondents believe that there is a need for
GAAP, it can be inferred that there is a need for an organization to take the
responsibility for setting GAAP. Therefore, 73.2% of the total sample study chose the
Sudan Council for Certified Accountants (SCCA), as the best organization to be
responsible for setting these principles, 11.3% from the total sample study chose the
government and 10% of the total sample point the universities. Some respondents chose
other bodies and their suggestions confined between: one body consists of all of these
organizations and the other body consists only of the SCCA and universities.

111
 Some respondents argued, although the existing accounting principles and auditing
procedures in Sudan have been derived from the practices of the U.K, they are still
suitable to the local environment, while other respondents state that these principles
need modification in order to make them more suitable and acceptable to the local
environment. Table (4.7) illustrates the opinions of the accountants in the Sudanese
industrial companies about this case.

Table (4.7)
The suitability of the existing accounting principles and auditing procedures
Frequencies Strongly Agree Do Disagree Strongly
Statement Mean SD and agree not disagree
percentages know

1. The existing accounting Frequencies 43.00 76.00 13.00 9.00 1.00

principles and auditing 4.06 0.84
procedures, although
derived from the practices
Percentage % 30.28 53.52 9.15 6.34 0.70
of the U.K, are suitable to
the local environment.

2. The existing accounting Frequencies 40.00 36.00 26.00 40.00 0.00

principles and auditing 3.54 1.18
procedures need to be
modified to make them
suitable and acceptable to Percentage % 28.17 25.35 18.31 28.17 0.00
the local environment

Source: prepared by the researcher (2017)

From table (4.7) above, the results of the descriptive statistics demonstrate that the
respondents strongly agree with the first statement which supports the view that
although the existing accounting principles and auditing procedures have been derived
from the practices of the U.K, they are still suitable to the local environment. This is
reflected in the mean value (4.06) and the standard deviation (0.84). It is also reflected
in the high frequency percentage of general agreement which represents 83.8% from the
total sample study and only 7.04% disagree. The second statement, which supports the
view that the existing accounting principles and auditing procedures need to be
modified to make them suitable and acceptable to the local environment, the
respondents represent a mean value of (3.54), standard deviation (1.18) and intermediate

112
 frequency percentage of general agreement (53%) from the total sample and (28.17%)
of the total sample disagree.

Most of the respondents strongly supporting the first statement that the existing
accounting principles and auditing procedures, although derived from the practices of
the UK are suitable to the local environment. This result is very reasonable if we link it
with the fact that 69.7% from the respondents have more than 10 years of experience in
these principles and procedures, so it is normal that they have less desire to modify or
change it.
The environmental factors affecting financial reporting practices in Sudan
It is argued that the environmental factors create differences in accounting systems and
practices among countries. Accounting systems and practices in various countries are
more likely to be affected differently by different factors. The following table presents
opinions and perceptions of the accounting practitioners about the environmental factors
affecting financial reporting practices and development in Sudan.
Table (4.8)
Factors affecting the accounting reporting practices and development in Sudan
Mean SD Frequencies Strongly Agree Do Disagree Strongly
Factors and agree not dis agree
percentage know

1.Type of economic system 3.82 1.01 Frequencies 31.00 79.00 12.00 15.00 5.00

Percentage % 21.83 55.63 8.45 10.56 3.52

2.Culture value Frequencies 27.00 63.00 28.00 23.00 1.00

3.65 0.99
Percentage % 19.01 44.37 19.72 16.20 0.70

3.Political system Frequencies 58.00 47.00 13.00 18.00 6.00

3.94 1.18
Percentage % 40.85 33.10 9.15 12.68 4.23

4.Legal system Frequencies 32.00 90.00 11.00 9.00 0.00

4.02 0.75
Percentage % 22.54 63.38 7.75 6.34 0.00

113
5.Colonial inheritance Frequencies 60.00 10.00 23.00 38.00 11.00
3.49 1.45
Percentage % 42.25 7.04 16.20 26.76 7.75

6.Accounting education Frequencies 66.00 62.00 6.00 8.00 0.00

4.31 0.80
Percentage % 46.48 43.66 4.23 5.63 0.00

7.Nature of business 4.35 0.75 Frequencies 68.00 61.00 8.00 5.00 0.00
ownership
Percentage % 47.89 42.96 5.63 3.52 0.00

Source: prepared by the researcher (2017)

The descriptive statistics in table (4.8) shows that the options of “strongly agree” and
“agree” for the factors affecting financial reporting in Sudan are prevalent. This can be
drawn from the mean values, which range between (4.35) and (3.49) and the standard
deviation (0.75 and 1.18) and also from the percentages of agreement which range
between (90.85%) and (49.29%). Also the above table shows that the respondents
strongly support the seventh, sixth and fourth factors, which is evident from the mean
values (4.35, 4.31 and 4.02) and a high level of agreement in the frequencies
percentages (90.85.%, 90.14 and 85.92%% respectively). The disagreement percentages
for the same factors range between 6.34% and 3.52%.
The results of the descriptive statistics indicate that there is a general agreement among
the respondents regarding all the factors listed above, which have a significant effect on
financial reporting in Sudan.

Reasons of unsuitability of accounting information to the local users in Sudan

Regarding the question of suitability of accounting information, 14% of the respondents
answered yes, while 86% answered no, which indicates that the accounting information
is unsuitable to the needs of the local users in Sudan. The following table illustrates the
opinions and perceptions of 86% from the total sample about the reasons that make
accounting information less appropriate for the local users in Sudan.

114
 Table (4.9)
Reasons of unsuitability of accounting information to the local users in Sudan
Frequencies Do
and Strongly Strongly
Reasons Mean S.D Agree not Disagree
agree disagree
Percentages know

1.Accounting system was Frequencies 65.00 49.00 1.00 3.00 4.00

created in the model of 4.38 0.89
advanced accounting practices
Percentage % 53.28 40.16 0.82 2.46 3.28
of former colonial (UK)

2.The weakness and inadequacy 3.59 0.96 Frequencies 14.00 71.00 10.00 27.00 0.00
of accounting education
Percentage % 11.47 58.20 8.20 22.13 0.00

3.Government domination over 4.53 0.80 Frequencies 83.00 27.00 6.00 6.00 0.00
the accounting professional
bodies Percentage % 68.03 22.13 4.92 4.92 0.00

4.The weakness of regulatory Frequencies 22.00 76.00 19.00 5.00 0.00

3.94 0.71
system
Percentage % 18.03 62.30 15.57 4.10 0.00

5.The absence of government Frequencies 71.00 33.00 12.00 6.00 0.00

legislation to organize the 4.39 0.86
accounting disclosure system Percentage % 58.20 27.04 9.84 4.92 0.00

Source: prepared by the researcher (2017)

Table (4.9) reports the perceptions of the accounting practitioners regarding the reasons
of unsuitability of accounting information to the local users in Sudan. As demonstrated
in the table, the highest value of the mean is (4.53), the lowest is (3.59) and the standard
deviation ranges between (0.96) and (0.71). These results of the descriptive statistics
reflect either a strong agreement or a tendency to agree among the respondents with all
the listed reasons in the table for unsuitability of accounting information to the local
users in Sudan. This can also be clearly seen from the frequencies percentages of the
agreement, which range between (93.44%) and (69.59%), while for disagreement range
is between (4.10%) and (22.13%).

115
 The results of the descriptive statistics reveal that there is a consensus between the
accounting practitioners about the suggested reasons which make accounting
information unsuitable for local users in Sudan.

Suggestions for improving the financial reports

Since the accounting information is not suitable to local users in Sudan, the
questionnaire includes a question in which respondents can make suggestions for
improving the financial reports, in order to enhance the suitability of accounting
information to the local users. The opinions of the respondents about these suggestions
can be drawn from the following table.
Table (4.10)
Suggestions for improving the financial reports
Frequencies Do
Strongly Strongly
Suggestions Mean SD and Agree not Disagree
agree disagree
percentages know

1.Disclosure of financial 4.57 0.50 Frequencies 81.00 61.00 0.00 0.00 0.00
information on a regular
basis percentage % 57.04 42.96 0.00 0.00 0.00

2. Increased information Frequencies 45.00 64.00 26.00 7.00

disclosure through the 4.04 0.84 0.00
financial reports currently in
practice. percentage % 31.69 45.07 18.31 4.93 0.00

3. Amendment of Companies 4.16 0.89 Frequencies 58.00 58.00 19.00 5.00 2.00
Act, particularly the articles
which deal with disclosure. percentage % 40.85 40.85 13.38 3.52 1.41

4.Organization of the 4.58 0.49 Frequencies 83.00 59.00

0.00 0.00 0.00
auditing profession
percentage % 58.45 41.55 0.00 0.00 0.00

5.Strengthening the power of 4.61 0.56 Frequencies 91.00 46.00 5.00 0.00 0.00
the Sudanese Accountants
Association percentage % 64.08 32.39 3.52 0.00 0.00

6.Reduced government 4.61 0.57 Frequencies 91.00 47.00 3.00 1.00 0.00
intervention in accounting
practices Percentage% 64.08 33.10 2.11 0.70 0.00

Source: prepared by the researcher (2017)

116
Table (4.10) reports the perceptions of the accounting practitioners regarding some
suggestions for improving the financial reports in Sudan. As illustrated in the table, the
respondents strongly support all the given suggestions to improve financial reports in
Sudan, which can be noted from the high values of the mean (range from 4.61 to 4.04)
and the standard deviation (between 0.49 and 0.89). There is full agreement (100%) for
the first and the fourth suggestions, namely: disclosure of financial information on a
regular basis and organization of the auditing profession.
The statistical results reveal that there is a consensus between the respondents about all
the given suggestions to improve the financial reports in Sudan, in order to enhance the
suitability of accounting information to the local users in the country.

Opinions about the possibility of the adoption of the IFRS currently in Sudan

Some of the respondents (19.72%) state that it is possible to adopt the international
financial reporting standards currently in Sudan. However, most of respondents
(80.28%) believe that it is not possible to adopt (IFRS) currently in Sudan, due to a lot
of difficulties. Table (4.11) presents the opinions and perceptions of those who believe
that there are many difficulties that prevent the adoption of (IFRS) in the Sudan.

117
 Table (4.11)
The difficulties that prevent the adoption of IFRS in Sudan
Frequencies Strongly Agree Do Disagree
Strongly
Difficulties Mean S.D and agree not
disagree
percentages know

1.Weakness of regulatory 4.03 0.64 Frequencies 23.00 73.00 16.00 2.00 0.00
system
Percentage% 20.18 64.04 14.04 1.75 0.00

2.Weakness of accounting 3.68 0.83 Frequencies 9.00 78.00 9.00 18.00 0.00
education
percentage % 7.89 68.42 7.89 15.79 0.00

3. Weakness of accountants' 3.05 1.10 Frequencies 14.00 30.00 18.00 52.00 0.00
skills
percentage % 12.28 26.32 15.79 45.61 0.00

4.Most of the business are 3.75 1.21 Frequencies 32.00 52.00 10.00 10.00 10.00
family business Percentage% 28.07 45.61 8.77 8.77 8.77

5. IFRS are based on Anglo- Frequencies 42.00 44.00 14.00 9.00 5.00
American thought which is not 3.96 1.10
suitable to the local
environment percentage % 36.84 38.60 12.28 7.89 4.39

6. Islamic banks and others

Frequencies 26.00 56.00 27.00 4.00 1.00
financial institutions should 3.89 0.82
follow Islamic accounting
standards despite the
percentage % 22.81 49.12 23.68 3.51 0.88
convergence

7. Training of staff to 4.50 0.52 Frequencies 58.00 55.00 1.00 0.00

0.00
understand and implement
IFRS percentage % 50.88 48.25 0.87 0.00 0.00

8. The high cost of developing Frequencies 55.00 46.00 9.00 0.00 4.00
the infrastructure and resources 4.30 0.89
to support professionals
working on IFRS percentage % 48.25 40.35 7.89 0.00 3.51

Source: prepared by the researcher (2017)

As demonstrated by the table (4.11) and based on the descriptive statistics, the highest
mean value is (4.50) and the lowest is (3.05), while the lowest standard deviation is
(0.52) and the highest is (1.21). This reflects that either a strong agreement or a

118
tendency to agree with the listed difficulties exist among the respondents is prevalent.
This indicates that the respondents support all the given difficulties in the table. The
highly support was given to the last two difficulties, namely: training of staff to
understand and implement IFRS (4.50) and the high cost of developing the
infrastructure and resources to support professionals working on IFRS (4.30). In
comparison with others difficulties, a relatively lower support was given by the
respondents for the third difficulty namely: the weakness of accountants' skills, with
mean value (3.05) and only (38.6 %) level of general agreement. The percentages of
general agreement for all the difficulties (except for the third difficulty) range between
(99.13) and (71.93), which is evidence that there is a high level of agreement given by
the respondents to all these difficulties that prevent the adoption of IFRS in Sudan. The
researcher believes that the low level of agreement with the third difficulty is because of
the existence of bias in the respondents’ answers when evaluating their skills.
The statistical results indicate that there is a high level of agreement presented by the
respondents about all the given difficulties that prevent the adoption of IFRS in Sudan,
despite the low support which was given to the third difficulty (weakness of
accountants’ skills).

The potential benefits from the adoption of the IFRS in Sudan

After clarifying the difficulties that prevent the adoption of IFRS in Sudan, it is
important to clarify the benefits behind the adoption of IFRS in Sudan. The
questionnaire includes a question about these potential benefits. The following table
reports the views of the accountants in the Sudanese industrial companies about this
case.

119
 Table (4.12)
The potential benefits from the adoption of IFRS in Sudan

Frequencies Do
Strongly Strongly
Benefits Mean SD and Agree not Disagree
agree disagree
percentage know

1.Facilitates the growth of Frequencies 82.00 50.00 4.00 2.00 4.00

foreign direct investment in 4.44 0.85
Sudan Percentage % 57.75 35.21 2.82 1.41 2.82

Frequencies 75.00 54.00 5.00 0.00 8.00

2.Reduces the possibility of
4.32 0.99
illegal acts, such as frauds
Percentage % 52.82 38.03 3.52 0.00 5.63

Frequencies 78.00 59.00 1.00 0.00 4.00

3.Enhance the comparability of
4.46 0.78
financial reports
Percentage % 54.93 41.55 0.70 0.00 2.82

4. Transparency and reliability Frequencies 82.00 55.00 1.00 0.00 4.00

of financial reports of the 4.49 0.78
companies will be ensured. Percentage % 57.75 38.73 0.70 0.00 2.82

Source: prepared by the researcher (2017)

Table (4.12) and the descriptive statistics show the view of the respondents about the
benefits that may be obtained from the adoption of IFRS in Sudan. It appears that the
mean values range between (4.49), as the highest mean value and (4.32), as the lowest
mean value. It also appears that the standard deviation ranges between (0.78), as the
lowest standard deviation, and (0.99), as the highest standard deviation. The high
percentages of general agreement with the stated benefits range between (9.48%) and
(90.85%) from the total sample study, which presents evidence that the respondents
strongly support all the benefits given in the table for the adoption of IFRS in Sudan.
The results from the above table and the descriptive statistics illustrate that the
respondents strongly agree with all the listed benefits that might be obtained from the
adoption of IFRS in Sudan.

120
 Opinions about the state of the accounting profession in Sudan

The accounting profession in the western world is a product of social and economic
changes during the industrial revolution, while in Sudan the accounting profession is not
a product of changes that have occurred in the country, but it is a product of the UK
accounting influences. This factor and others, such as: accounting education, the nature
of business and government domination has a strong influence on the accounting
profession in Sudan. This part aims to evaluate the current state of accounting
profession in Sudan from the view of accountants in the Sudanese industrial companies.
Table (4.13) summarizes some activities that should be conducted by the accounting
profession and the opinions of the respondents regarding these activities.
Table (4.13)
The activities of the accounting profession in Sudan
Frequencies Do
Strongly Strongly
Activities Mean SD and Agree not Disagree
agree disagree
percentages know

1.Studying and providing solutions 2.59 0.94 Frequencies 5.00 25.00 24.00 83.00 5.00
to the problems facing accounting
firms Percentage % 3.52 17.61 16.90 58.45 3.52

2. Developing a code of ethics 2.49 0.80 Frequencies 3.00 16.00 30.00 91.00 2.00

Percentage % 2.11 11.27 21.13 64.08 1.41

3.Developing accounting 2.79 1.00 Frequencies 3.00 46.00 15.00 74.00 4.00
principles that are suitable to
Sudan Percentage % 2.11 32.39 10.56 52.11 2.82

4.Developing effective auditing 2.88 0.85 Frequencies 4.00 32.00 49.00 57.00 0.00
procedures Percentage % 2.82 22.54 34.51 40.14 0.00

5. Conducting effective research 2.75 1.05 Frequencies 8.00 29.00 37.00 56.00 12.00
programs in accounting
Percentage % 5.63 20.42 26.06 39.44 8.45

Source: prepared by the researcher (2017)

Table (4.13) and the descriptive statistics show the perceptions of the accountants about
the activities of accounting profession in Sudan. It seem that the options of disagree and
strongly disagree are prevalent regarding the activities that should be conducted by
accounting profession in Sudan. This can be reflected by the lower mean values given

121
 by the sample of the respondents for all listed activities. The mean values ranges
between (2.88) and (2.49) and the standard deviation ranges between 0.80 and 1.05.
Also, the frequencies percentages presents low support from the respondents for all the
listed activities, which ranges between (34.5%) and (13.38%) from total sample. This
indicates that the respondents believe that the accounting profession in Sudan is doing
little or not doing any of these activities.
The result from the descriptive statistics reveal that there is a general agreement that the
accounting profession in Sudan has no clear participation in those activities, which
indicates that the accounting profession in Sudan is very weak, disorganized and its role
in improving accounting in the country is minimal. Therefore, the accounting profession
is one of underlying factors that negatively affects the quality of financial reports in the
country.
The role of the academic institutions in improving accounting profession in Sudan
The unsatisfactory state of accounting profession in Sudan imposes the question about
the role of the academic institutions in improving the accounting profession in the
country. The questionnaire presents this question to the accountants in the industrial
companies. Table (4.14) illustrates the opinions of the respondents about the role of
academic institutions in improving the accounting profession in Sudan.
Table (4.14)
The role of academic institutions in improving accounting profession
Frequencies
Strongly Do not Strongly
Roles Mean S.D and Agree Disagree
agree know disagree
Percentages

1.Improve the basic 4.63 0.53 Frequencies 92.00 49.00 1.00 0.00 0.00
accounting education Percentage % 64.79 34.51 0.70 0.00 0.00

2. Effective academic 4.34 0.95 Frequencies 76.00 54.00 0.00 8.00 4.00
training for accounting
personnel Percentage % 53.52 38.03 0.00 5.63 2.82

3. Effective professional 4.16 1.02 Frequencies 67.00 50.00 6.00 19.00 0.00
training for accounting
personnel Percentage % 47.18 35.21 4.23 13.38 0.00

4. Seminars and training 4.28 0.66 Frequencies 56.00 70.00 16.00 0.00 0.00
courses to government
employees Percentage % 39.44 49.30 11.27 0.00 0.00

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5. Provide the Frequencies 62.00 64.00 8.00 0.00 8.00
recommendations and 4.21 0.98
advice for developing
accounting concepts Percentage % 43.66 45.07 5.63 0.00 5.63

6.Assess of accounting Frequencies 69.00 68.00 5.00 0.00 0.00

curriculum at the 4.45 0.57
Secondary level, as well
Percentage % 48.59 47.89 3.52 0.00 0.00
as at the University level

7. Provide a research base 4.34 0.82 Frequencies 65.00 70.00 1.00 2.00 4.00
for local purposes Percentage % 45.77 49.30 0.70 1.41 2.82

Source: prepared by the researcher (2017)

From table (4.14) and descriptive statistics it is clear that the respondents give high
support to all the listed roles of academic institutions in improving the accounting
profession in Sudan, which can be turned out from the high mean values which range
(between 4.63 and 4.16) and the standard deviation (between 0.53 and 1.02). The
highest percentage of agreement (99.3%) is given to the first role, namely: Improve the
basic accounting education, followed by the sixth role (96.48%) namely: Assess the
accounting curriculum in the Secondary level as well as at University level. The
relatively lowest percentage of agreement (82.39%) is given to the third role namely:
Effective professional training for accounting personnel.
The lowest percentage of agreement is (82.39%) indicates that there is a consensus
between the respondents about all the roles of academic institutions in improving
accounting profession in the Sudan.
The challenges of accounting practices in Sudan
The previous discussions have clarified a lot of challenges facing the accounting
practices in Sudan. The following table summarizes these challenges and presents the
perception of the respondents regarding these challenges.

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 Table (4.15)
The challenges of accounting practices in Sudan
Frequencies
Strongly Do not Strongly
Challenges Mean S.D and Agree Disagree
agree know disagree
Percentages

1.Shortage of qualified 3.84 1.23 Frequencies 54.00 49.00 6.00 28.00 5.00
accountants at all levels and
in all areas of accounting Percentage % 38.03 34.51 4.23 19.72 3.52

4.13 0.83 Frequencies 46.00 82.00 1.00 13.00 0.00

2.Lack of adequate financial
reports Percentage % 32.39 57.75 0.70 9.15 0.00

3.90 1.05 Frequencies 41.00 73.00 5.00 19.00 4.00

3. Lack of adequate auditing
standards Percentage % 28.87 51.41 3.52 13.38 2.82

4.54 0.65 Frequencies 83.00 56.00 0.00 2.00 1.00

4.Lack of strong national
associations of accountants Percentage % 58.45 39.44 0.00 1.41 0.70

5.Lack of adequate 3.94 1.10 Frequencies 51.00 57.00 12.00 18.00 4.00
accounting in government-
owned businesses Percentage % 35.92 40.14 8.45 12.68 2.82

6. Accounting practices are 3.96 1.19 Frequencies 64.00 39.00 13.00 22.00 4.00
viewed and utilized primarily
as a mean for helping
companies evade taxes. Percentage % 45.07 27.46 9.15 15.49 2.82

7. Lack in financial disclosure 3.76 0.91 Frequencies 26.00 76.00 20.00 20.00 0.00
requirements.
Percentage % 18.31 53.52 14.08 14.08 0.00

8. The weakness of the Frequencies 24.00 51.00 14.00 50.00 3.00

accounting curricula which 3.30 1.18
are adopted in local faculties
and universities Percentage % 16.90 35.92 9.86 35.21 2.11

9.The lack of teaching staff Frequencies 58.00 62.00 10.00 12.00 0.00
sufficiently qualified to teach 4.17 0.89
advanced subjects to improve Percentage % 40.85 43.66 7.04 8.45 0.00
accounting and auditing

Source: Prepared by the researcher 2017

Table (4.15) and descriptive statistics demonstrate the perceptions of the accountants in
industrial companies in Sudan about the challenges of the accounting practices in the
country. It appears that the respondents strongly agree or tend to agree about all the

124
 listed challenges in the table, which can be noted from the mean values that ranges
(between 4.54 and 3.30) and the standard deviation (between 0.65 and 1.23). The
highest level of agreement is given to the fourth and ninth challenges, namely: The lack
of strong national associations of accountants and the Lack of teaching staff sufficiently
qualified to teach advanced subjects to improve accounting and auditing (their Mean
values are (4.54) and (4.17), the standard deviations are (0.65) and (0.89) respectively).
The lowest level of agreement is given to the eighth challenge, namely: The weakness
of the accounting curricula which are adopted in local faculties and universities, with
mean value (3.30). Mostly the mean values of all the challenges of accounting practices
in Sudan are more than (3.70), which indicates that a strong agreement is presented by
the respondents about all the listed challenges.
The results of the descriptive statistics reveal that there is a consensus between the
accounting practitioners about the challenges facing accounting practices in Sudan,
despite the relatively low agreement that is presented to the eighth challenge (The
weakness of the accounting curricula which are adopted in local faculties and
universities).
Suggestions for improving accounting practices in Sudan
Due to a lot of challenges facing the accounting practices in Sudan, there is an urgent
need for improvement. Therefore, the questionnaire includes a question that suggests
elements for improving the accounting practices in the country. The following table
shows the perceptions of the respondents about those elements.
Table (4.16)
The essential elements to improve the accounting practices in Sudan
Frequencies Do
Strongly Strongly
Elements Mean SD and Agree not Disagree
agree disagree
Percentages know

1. Active accounting 4.25 0.87 Frequencies 62.00 67.00 1.00 11.00 1.00
Organizations Percentage % 43.66 47.18 0.70 7.75 0.70

2. Accounting principles 4.01 1.25 Frequencies 66.00 47.00 2.00 18.00 9.00
suitable to the local
environment Percentage % 46.48 33.10 1.41 12.68 6.34

3. Official auditing 4.35 0.71 Frequencies 65.00 66.00 7.00 4.00 0.00
authorization Percentage % 45.77 46.48 4.93 2.82 0.00

125
4. Greater support from the 4.39 0.75 Frequencies 73.00 56.00 8.00 5.00 0.00
government Percentage % 51.41 39.44 5.63 3.52 0.00

5.Effective educational 4.49 0.73 Frequencies 85.00 47.00 5.00 5.00 0.00
programs Percentage % 59.86 33.10 3.52 3.52 0.00

6.Cooperation with 4.58 0.58 Frequencies 88.00 48.00 6.00 0.00 0.00
international
organizations (such as IASB) Percentage % 61.97 33.80 4.23 0.00 0.00

7.Postgraduate training for 4.56 0.78 Frequencies 93.00 44.00 1.00 0.00 4.00
accountants Percentage % 65.49 30.99 0.70 0.00 2.82

Source: prepared by the researcher (2017)

Table (4.16) reports the perceptions of the accounting practitioners in Sudan about the
essential elements that were suggested for improving accounting practices. The
descriptive statistics show high support to all the elements that have been listed in the
table, which can be seen from the high mean values, which ranges (between 4.58 and
4.01) and the standard deviation (between 0.58 and 1.25). The two highest mean values
are the sixth and seventh elements (4.58 and 4.56), namely: Cooperation with
international organizations (such as IASB) and postgraduate training for accountants.
The element with the lowest mean value is the second element, namely: Accounting
principles suitable to the local environment, with a mean value of (4.01). In general, the
respondents present mean values more than (4.00) for each of the listed elements, which
indicate that they strongly agree with all the given elements to improve accounting
practices in Sudan.
The results from the descriptive statistics illustrate that there is a high degree of
agreement given by the respondents regarding all the elements that may improve the
accounting practices in Sudan. The most significant elements for improving accounting
practices in Sudan are: Postgraduate training for accountants, Cooperation with
international organizations (such as IASB) and Effective educational programs.
The role of government in improving accounting practices in Sudan
After identifying the essential elements to improve accounting practices in Sudan, it is
useful to illustrate the role the Sudanese government should play in the development
process and what appropriate methods can be used by the government to do so. The

126
 questionnaire presents a question about the methods and means by which the
government could improve accounting practices in Sudan. The following table
illustrates the perceptions of the accountants about the case.
Table (4.17)
Methods and means by which the government could improve accounting practices in
Sudan
Frequencies Do
Strongly Strongly
Methods Mean S.D and Agree not Disagree
agree disagree
Percentages know
1.Provide financial support to
Frequencies 78.00 53.00 1.00 2.00 0.00
the accounting profession 4.54 0.60
Percentage % 58.21 39.55 0.75 1.49 0.00
2.Provide effective accounting
4.58 0.63 Frequencies 85.00 45.00 1.00 3.00 0.00
legislation
Percentage % 63.43 33.58 0.75 2.24 0.00
3.Establish a licensing Frequencies 72.00 53.00 8.00 0.00 1.00
authority for setting standards
4.46 0.68
for admission into accounting Percentage % 53.73 39.55 5.97 0.00 0.75
practice
4.Establish a broad national 3.87 1.04 Frequencies 34.00 74.00 7.00 13.00 6.00
committee to advance
accounting education Percentage % 25.37 55.22 5.22 9.70 4.48
5.Establish a broad national Frequencies 39.00 71.00 9.00 13.00 2.00
committee to advance 3.99 0.94
accounting practices Percentage % 29.10 52.99 6.72 9.70 1.49
6. Establish a governmental Frequencies 49.00 60.00 1.00 17.00 7.00
agency responsible for
3.95 1.17
advancing accounting practices
Percentage % 36.57 44.78 0.75 12.69 5.22
Source: prepared by the researcher (2017)

Table (4.17) illustrates the opinions of the respondents about the methods by which the
government could improve the accounting practices in Sudan. The descriptive statistics
shows a general agreement about all the methods listed in the table, which can be noted
from the high mean values, which range (between 4.58 and 3.87) and the standard
deviation (between 0.60 and 1.17). It is also clear from the frequencies percentages of
agreement which range between (97.76%) and (80.59%). The respondents ranked the
second and the first methods, as the most important methods that can be adopted by the
government to improve the accounting practices in Sudan, namely: Provide effective

127
accounting legislation, and Provide financial support to the accounting profession (their
Mean values are (4.58) and (4.54) respectively).
The results from descriptive statistics show that the respondents present a general
agreement about all the preceding methods, particularly the method of providing
effective accounting legislation, and providing financial support to the accounting
profession.

4.3. Academics’ view about financial reporting in Sudan

In the introduction of this section it is important to present the characteristics of the

sample of the academics in the Sudanese universities and institutions.
Table (4.18) illustrates the frequencies and percentage distribution of the respondents
regarding the academic qualification in accounting, as shown in figure (5), which
indicates the graphic representation of the relative percentage distribution of this case.

Table (4.18)
Distribution of the respondents according to the academic qualification
Academic qualification in accounting Frequencies Percentages

Master degree 4 8

Doctoral degree 33 66

Post- doctoral studies 13 26

Total 50 100

Source: prepared by the researcher (2017)

128
 70% 66%

60%

50%
percentage

40%

30% 26%

20%
8%
10%

0%
Master degree Doctoral degree Post- doctoral studies
Level of education

Figure 5: Distribution of the respondents by the academic qualifications

Source: Prepared by the researcher 2017
Table (4.18) and figure (5) illustrate the academic qualification in accounting for the
respondents. It is clear that most of respondents (66%) from the total sample hold
doctoral degree and 26% from the total sample hold post-doctoral degree, remaining
only 8% from the sample hold master degree. It appears that 92% from the total sample
hold doctoral degree, which is considered as a positive indicator of the correctness of
obtained data.
Table (4.19) shows the frequencies and percentage distribution of the respondents by
country of formal education and figure (6) indicates the graphic representation of the
relative percentage distribution of this case.
Table (4.19)
Distribution of respondents by country of formal education
Country of formal education Frequencies Percentages

The Sudan 42 84

Another Arabic country 2 4

UK or USA 6 12

Total 50 100

Source: prepared by the researcher (2017)

129
 90% 84%
80%
70%
60%
percentage

50%
40%
30%
20%
12%
10% 4%
0%
the Sudan Another Arab country U.K. or the USA
Country of formal education

Figure 6: Distribution of the respondents by country of formal education

Source: Prepared by the researcher 2017
Table (4.19) and figure (6) appear that the country of formal education for 84% of the
total sample is Sudan, followed by 12% of the total sample whose country of formal
education is UK or USA, while only 4% of the total sample received formal education
in Arabic countries. This high percentage of those who obtained their formal education
in Sudan indicates good knowledge about the state financial reporting in Sudan which
expects positive effect in the data obtained.
The following table (4.20) shows the frequencies and percentage distribution of the
respondents by current scientific category in the academic job. This is also shown in
figure (7), which indicates the graphic representation of the relative percentage
distribution of this case.

Table (4.20)
Distribution of the respondents by academic job

Academic job Frequencies percentages

Lecturer 5 10

Assistant Professor 22 44

Associate Professor 23 46

Total 50 100

Source: prepared by the researcher (2017)

130
 50% 46%
44%
45%
40%
35%
percentage

30%
25%
20%
15%
10%
10%
5%
0%
Lecturer Assistant professor Associate professor

Academic job

Figure 7: Distribution of the respondents by the scientific category in the academic job
Source: Prepared by the researcher 2017
Table (4.20) and figure (7) clarify that 46% from the total sample of the respondents are
associate professors and 44% are assistant professors, while only 10% from the total
sample are lecturers. It appear that 90% of the total sample have more experience
because they are assistant and associate professors, which has a positive effect in the
quality of the data obtained.
The following table (4.21) shows the frequencies and percentage distribution of the
respondents by the years of experience in teaching accounting and auditing, as it is
shown in figure (8), which indicates the graphic representation of the relative
percentage distribution of this case.
Table (4.21)
Distribution of the respondents by years of experience

Years of experience Frequencies percentages

Less than 5 years 4 8

From 5 to 10 years 12 24

More than 10 years 34 68

Total 50 100

Source: prepared by the researcher (2017)

131
 80%
68%
70%

perecentage 60%

50%

40%

30% 24%
20%
8%
10%

0%
Less than 5 From 5 years to 10 years More than 10 years
years

Figure 8: Distribution of the respondent by the years of experience

Source: Prepared by the researcher 2017
Table (4.21) and figure (8) demonstrate that 68% of the total sample have more than ten
years’ experience in teaching accounting and auditing, followed by those who have
between five and ten years’ experience (represents 24% of the total sample), only 8% of
the total sample have less than five years of experience. The high percentage of those
who have more than ten years’ experience in teaching accounting and auditing in the
Sudanese Universities and Institutions, reflected positively in the quality of the obtained
data.
Evaluation the capabilities of the accounting graduates from Sudanese universities
Some respondents (20%) from the total sample believe that the accounting graduates
from Sudanese universities are capable of meeting the professional demands, while
most of the respondents (80%) have a contradictory view, meaning that the accounting
graduates from the Sudanese’s Universities are incapable of meeting the professional
demands. Table (4.22) represents the opinions of professors in the Sudanese
Universities and institutions about the reasons that contribute to this problem.

132
 Table (4.22)
The reasons of inadequacy in the preparation of accounting graduates from the
Sudanese’s Universities and Institutions
Do
Frequencies and Strongly Strongly
Reasons Mean S.D Agree not Disagree
percentages agree Disagree
know
1.The weakness of the Frequencies 11.00 14.00 0.00 11.00 4.00
course content and 3.43 1.41
Percentages % 27.50 35.00 0.00 27.50 10.00
curriculum
2.The absence of the Frequencies
government’s role in 3.58 1.24 10.00 16.00 3.00 9.00 2.00
guiding accounting Percentages %
education and control it 25.00 40.00 7.50 22.50 5.00
3. Inadequate computer Frequencies
facilities and others support 4.28 0.96 21.00 13.00 2.00 4.00 0.00
equipment and resources Percentages % 52.50 32.50 5.00 10.00 0.00
4. Large numbers of Frequencies 32.00 8.00 0.00 0.00 0.00
students in class may lead 4.80 0.41
to less chance of discussion Percentages % 80.00 20.00 0.00 0.00 0.00
5.Most accounting text Frequencies
books are based on the 3.45 1.34 11.00 13.00 1.00 13.00 2.00
business environment of Percentages %
developed countries 27.50 32.50 2.50 32.50 5.00
6.Most professors no longer Frequencies
6.00 13.00 4.00 12.00 5.00
felt the responsibility to 3.08 1.33
train students for Percentages %
15.00 32.50 10.00 30.00 12.50
employment
Source: prepared by the researcher (2017)

Table (4.22) shows the perceptions of the respondents about the reasons that generate
the state of inadequacy in the preparation of accounting graduates from the Sudanese
Universities and institutions. It appears that the respondents strongly agree about all the
reasons listed in the table. This can be reflected from the values of the mean, which
range (between 4.80 and 3.08) and the standard deviation (between 0.41 and 1.41). The
respondents fully (100%) agree with the fourth reason namely: Large numbers of
students in class may lead to less chance of discussion. The lowest level of agreement
(47%) was given to the last reason, namely: Most professors no longer felt the
responsibility to train students for employment. The researcher justifies this low
agreement which was presented by the respondents to the last reason, due to the bias in
answering the question that judge the respondents’ work.

133
 The results from the table and descriptive statistics illustrate that, in general, there is a
high agreement about the reasons that generate the state of inadequacy in the
preparation of the accounting graduates from the Sudanese Universities. Only a low
agreement was given to the last reason.
Means and policies for developing accounting education in Sudan
As demonstrated previously, the state of accounting education in Sudan is far from
optimal. Therefore, there is an urgent need to improve the accounting education. The
questionnaire includes a question about some means and policies for improvement. The
following table presents the opinions of the respondents about these means.
Table (4.23)
Means and policies for developing the accounting education in Sudan
Frequencies Do
Strongly Strongly
Means and policies Mean S.D and Agree not Disagree
agree Disagree
Percentages know
1.Updating periodically for 4.46 0.48
accounting courses Frequencies 32.00 18.00 0.00 0.00 0.00

Percentages% 64.00 36.00 0.00 0.00 0.00

2.Establishment of accounting
education development center 3.76 1.22 Frequencies 16.00 19.00 5.00 7.00 3.00
sponsored by the government
Percentages% 32.00 38.00 10.00 14.00 6.00
3. Provide the education
institutions with computer 4.36 0.83 Frequencies 26.00 19.00 2.00 3.00 0.00
facilities and other support
equipment and resources Percentages% 52.00 38.00 4.00 6.00 0.00
4. Increase and training the
Frequencies 22.00 25.00 3.00 0.00 0.00
teaching staff member 4.38 0.60
Percentages% 44.00 50.00 6.00 0.00 0.00
Source: prepared by the researcher (2017)

Table (4.23) reports the perceptions of the professors, who teach accounting and
auditing in the Sudanese’s Universities and institutions, about the means and policies by
which the accounting education could be improved. As demonstrated by the table
above, the respondents strongly support all the reasons listed in the table. This can be
turned out from the mean values, which range between (4.64) and (3.76) and the
standard deviation (between 0.60 and 1.22). Also, the frequencies percentages of
agreement are very high, so all the respondents (100%) agree with the first policy,

134
namely: Updating periodically for accounting courses, followed by the fourth policy
(represents (94%) from the total sample), while the third policy represents (90%) of the
total sample. The second policy has a relatively low agreement in comparison with the
others and represents (80%) from the total sample.
The results from the table and descriptive statistics show that there is a consensus
among the respondents regarding all the means and policies which have been suggested
in the table for improving the accounting education in Sudan.

The suitability of the existing accounting principles and auditing procedures

All the respondents (100%) present full agreement that there is no General Accounting
Accepted Principles (GAAP) in Sudan and there is need to implement these principles
in the country. Since all the respondents believe that there is a need for GAAP in Sudan,
it can be inferred that there is a need for an organization to take the responsibility for
setting them. Consequently, 60% of the total sample study chose the Sudan Council for
Certified Accountants (SCCA), as the best organization to be responsible for setting
these principles, 14% chose the universities, while 26% of the respondents chose other
organizations. Their suggestions confined between: one organization consists of all of
these organizations and organization consists of the SCCA and universities. This
indicates that the respondents believe that the role of the government should not exist or
should be minimized in setting accounting principles in the country.

Regarding the suitability of the existing accounting principles and auditing procedures
in Sudan, some of the respondents argued that although the existing accounting
principles and auditing procedures in Sudan have been derived from the practices of the
U.K, they are still suitable to the local environment. Others state that there is a need for
modification of these principles to make them more suitable to the local environment.
Table (4.24) illustrates the opinions of the professors in the Sudanese Universities and
institutions regarding this case.

135
 Table (4.24)
The suitability of the existing accounting principles and auditing procedures
Frequencies Do
Strongly Strongly
Statement Mean SD and Agree not Disagree
agree disagree
Percentages know

1. The existing accounting

principles and auditing Frequencies 4.00 13.00 6.00 23.00 4.00
procedures, although derived 2.80 1.16
from the practices of the U.K,
are suitable to the local Percentage % 8.00 26.00 12.00 46.00 8.00
environment.

2. The existing accounting

principles and auditing Frequencies 18.00 18.00 4.00 8.00 2.00
procedures need to be modified 3.84 1.20
to make them suitable and
acceptable to the local Percentage % 36.00 36.00 8.00 16.00 4.00
environment

Source: prepared by the researcher (2017)

Table (4.24) shows the respondents’ opinions regarding the suitability of the existing
accounting principles and auditing procedures. It appears that 72% from the total
sample agree with the second statement which support the view that: The existing
accounting principles and auditing procedures need to be modified to make them
suitable and acceptable to the local environment, which represents a mean value of
(3.84) and standard deviation of (1.20). In contrast 33% of the total sample agree with
the first statement which support the view that: Although the existing accounting
principles and auditing procedures have been derived from the practices of the U.K,
they are still suitable to the local environment, which represents a mean value of (2.80)
and standard deviation of (1.16).
The results from the table and descriptive statistics emphasize that there is a need for
modification of the accounting principles and auditing procedures in Sudan in order to
make them more suitable for the local environment.

The environmental factors affecting the financial reporting practices in Sudan

The following table (4.25) provides opinions and perceptions of the professors about the
numerous factors that influence the financial reporting in Sudan.

136
 Table (4.25)
Factors affecting the financial reporting practices and development in Sudan
Mean S.D Frequencies Strongly Agree Do not Disagree Strongly
Factors and agree know disagree
Percentage %
1.Type of economic Frequencies 28.00 19.00 0.00 1.00 2.00
system 4.40 0.93
Percentage % 56.00 38.00 0.00 2.00 4.00
2.Culture value Frequencies 31.00 14.00 2.00 3.00 0.00
4.46 0.84
Percentage % 62.00 28.00 4.00 6.00 0.00
3.Political system Frequencies 24.00 25.00 0.00 1.00 0.00
4.06 0.91
Percentage % 48.00 50.00 0.00 2.00 0.00
4.Legal system Frequencies 16.00 27.00 1.00 6.00 0.00
4.44 0.61
Percentage % 32.00 54.00 2.00 12.00 0.00
5.Colonial inheritance Frequencies 20.00 20.00 4.00 4.00 2.00
4.04 1.09 Percentage % 40.00 40.00 8.00 8.00 4.00
6.Accounting education Frequencies 26.00 24.00 0.00 0.00 0.00
4.52 0.50
Percentage % 52.00 48.00 0.00 0.00 0.00
7.Nature of business Frequencies 24.00 22.00 0.00 4.00 0.00
ownership 4.32 0.84
Percentage % 48.00 44.00 0.00 8.00 0.00
Source: prepared by the researcher (2017)
Table (4.25) and the descriptive statistics show that the respondents agree with all the
factors affecting the financial reporting practices in Sudan. This is evident from the high
mean values which range (between 4.52 and 4.04) and the standard deviation (between
0.50 and 1.09). Also, the frequencies percentages range between 100% and 80%, while
the disagreement frequencies percentages are between 2% and 12%. The highest
percentage of agreement (100%) is given to the sixth factor, namely: Accounting
education, with mean value (4.52), while the lowest percentage of agreement (80%) is
given to the fifth factor, namely: Colonial inheritance, with mean value (4.04).
The result from the above table and descriptive statistics indicates that there is a
consensus among the respondents that all the factors listed in the above table have a
considerable effect on the financial reporting practices and development in Sudan.

137
 The reasons of unsuitability of accounting information to the local users
Regarding the question of the suitability of accounting information to the local users,
22% of the respondents answered yes, while 78% answered no, which indicates that the
accounting information is unsuitable to the needs of the local users in Sudan. The
following table illustrates opinions and perceptions of the 78% of the respondents who
answered yes, about the reasons that make accounting information less appropriate for
the users in Sudan.
Table (4.26)
The reasons of unsuitability of accounting information to the local users
Frequencies Do Strongly
Strongly
Reasons Mean S.D and Agree not Disagree dis
agree
Percentage % know agree
1.Accounting system was
created in the model of advanced Frequencies 19.00 8.00 3.00 7.00 2.00
accounting practices of former 3.90 1.33
colonial (UK) Percentage % 48.72 20.51 7.70 17.95 5.12
2.The weakness and inadequacy Frequencies 10.00 19.00 4.00 4.00 2.00
of accounting education 3.79 1.10
Percentage % 25.64 48.72 10.25 10.25 5.12
3.Government domination over Frequencies 15.00 13.00 2.00 6.00 3.00
the accounting professional 3.79 1.32
bodies Percentage % 38.46 33.33 5.12 15.38 7.70
4.The weakness of regulatory Frequencies 14.00 16.00 7.00 2.00 0.00
system 4.08 0.87
Percentage % 35.90 41.03 17.95 5.12 0.00
5.The absence of government Frequencies 14.00 20.00 2.00 1.00 2.00
legislation to organize the 4.10 0.99
accounting disclosure system Percentage % 35.90 51.28 5.12 2.56 5.12
Source: prepared by the researcher (2017)
Table (4.26) reports the perceptions of the professors regarding the reasons of
unsuitability of accounting information to the local users. It indicates that the mean
values ranges between (4.10) and (3.79) and the standard deviation is between 0.87 and
1.33. The respondents strongly support the fifth and fourth reasons, namely: The
absence of government legislation in organizing the accounting disclosure system and
the Weakness of regulatory system. Their mean values are (4.10) and (4.08)
respectively. Also, the percentages of general agreement range between (87.18%) and
(71.79%), while the percentages of disagreement range between (23.08%) and (5.12%).

138
 Therefore, the options of strongly agree and agree are the prevailing options among the
respondents.
The results of the descriptive statistics reveal that there is a consensus between the
respondents about the reasons underlying the unsuitability of accounting information to
the local users in Sudan, despite the slight low support that was shown to the first and
third reasons.
Suggestions for improving the financial reports
As demonstrated above, the accounting system in Sudan provides unsuitable
information to the local users. This state emphasizes the need for improving the
financial reports in the country. Accordingly, the questionnaire includes a question that
consists of suggestions for this improvement. The following table reports the opinions
of the respondents about these suggestions.
Table (4.27)
Suggestions for improving the financial reports
Frequencies Do
Strongly Strongly
Suggestions Mean S.D and Agree not Disagree
agree disagree
Percentages know

1.Disclosure of financial 4.66 0.52 Frequencies 34.00 15.00 1.00 0.00 0.00
information on a regular basis
Percentage % 68.00 30.00 2.00 0.00 0.00

2. Increased information Frequencies 28.00 17.00 2.00 3.00 0.00

disclosure through the 4.40 0.83
financial reports currently in
practice. Percentage % 56.00 34.00 4.00 6.00 0.00

3. Amendment of Companies 4.54 0.73 Frequencies 32.00 15.00 1.00 2.00 0.00
Act, particularly the articles
which deal with disclosure. Percentage % 64.00 30.00 2.00 4.00 0.00

4.Organization of the auditing 4.44 0.70 Frequencies 27.00 19.00 3.00 1.00 0.00
profession
Percentage % 54.00 38.00 6.00 2.00 0.00

5.Strengthening the power of 4.58 0.57 Frequencies 31.00 17.00 2.00 0.00 0.00
the Sudanese Accountants
Association Percentage % 62.00 34.00 4.00 0.00 0.00

6.Reduce the government Frequencies 29.00 14.00 2.00 3.00 2.00

intervention in accounting 4.30 1.07
practices Percentage% 58.00 28.00 4.00 6.00 4.00

139
Table (4.27) illustrates the perception of the professors in the Sudanese Universities and
Institutions about some suggestions for improving financial reporting in Sudan. It
appears that the respondents strongly support all the suggestions listed in the table,
which can be deduced from the high mean values, (range between 4.66 and 4.30) and
the standard deviation (between 0.52 and 1.07). Also, the table represents high
frequencies percentages of agreement for all the suggestions. The highest percentage of
agreement (98%) is given to the first suggestion, namely: Disclosure of financial
information on a regular basis, while the lowest percentage (86%) is given to the last
suggestion, namely: Reduce the government’s intervention in accounting practices.
The results from the descriptive statistics demonstrate that there is a high agreement
among the respondents about all the listed suggestions for improving the financial
reporting practices and development in Sudan.

Opinions about the possibility of the adoption of the IFRS currently in Sudan
Some of the respondents (16%) from the total sample believe that it is possible to adopt
the international financial reporting standards currently in Sudan, while most of the
respondents (84%) from the total sample believe that it is not possible to adopt (IFRS)
currently in Sudan, due to many obstacles. Table (4.28) clarifies the opinions and
perceptions of those who believe that there are difficulties that currently prevent the
adoption of (IFRS) in Sudan.

140
 Table (4.28)
The difficulties that prevent the adoption of the IFRS currently in Sudan
Frequencies Do
Strongly Strongly
Difficulties Mean S.D and Agree not Disagree
agree disagree
Percentages know

1.Weakness of regulatory 4.02 1.02 Frequencies 17.00 14.00 6.00 5.00 0.00
system
Percentage% 40.48 33.33 14.29 11.90 0.00

2.Weakness of accounting 4.00 0.86 Frequencies 8.00 31.00 0.00 1.00 2.00
education
Percentage % 19.05 73.81 0.00 2.38 4.76

3. Weakness of accountants' 4.02 0.98 Frequencies 13.00 22.00 4.00 1.00 2.00
skills
Percentage % 30.95 52.38 9.52 2.38 4.76

4.Most of the businesses are 4.55 0.74 Frequencies 27.00 13.00 0.00 2.00 0.00
family businesses
Percentage% 64.29 30.95 0.00 4.76 0.00

5. IFRS are based on Anglo- Frequencies 20.00 8.00 2.00 8.00 4.00
American thought which is 3.76 1.46
not suitable to the local
environment Percentage % 47.62 19.05 4.76 19.05 9.52

6. Islamic banks and others

Frequencies 22.00 15.00 0.00 2.00 3.00
financial institutions should
follow Islamic accounting
standards despite the 4.21 1.16
Percentage % 52.38 35.71 0.00 4.76 7.14
convergence

7. Training of staff to 4.40 0.50 Frequencies 17.00 25.00 0.00 0.00 0.00
understand and implement
IFRS Percentage % 40.48 59.52 0.00 0.00 0.00

8. The high cost of

Frequencies 18.00 15.00 4.00 5.00 0.00
developing the infrastructure
and resources to support 4.10 1.01
professionals working on Percentage % 42.86 35.71 9.52 11.90 0.00
IFRS

Source: prepared by the researcher (2017)

Table (4.28) shows descriptive statistics of the respondents’ perceptions about the
difficulties that impede the adoption of (IFRS) currently in Sudan. It appears that there

141
 is a high agreement with all the given difficulties. This can be proved by the mean
values which ranges between (4.55), as the highest mean value and (3.76), as the lowest
one. The standard deviation ranges between (0.50) and (1.46). The highest percentage
(95.24%) is given to the fourth difficulty, namely: Most of the businesses are family
businesses and the lowest percentage (66.67%) is given to the fifth difficulty, namely:
IFRS are based on Anglo- American thought which is not suitable for the local
environment.
The results from the table and the descriptive statistics show that there is a high level of
agreement presented by the respondents for all the given difficulties, which disallowed
the adoption of IFRS currently in Sudan.
The potential benefits from the adoption of the IFRS in Sudan
The questionnaire includes a question about the potential benefits that can be obtained
from the adoption of IFRS in Sudan. Table (4.29) reports the views of the professors in
the Sudanese Universities and Institutions about these benefits.
Table (4.29)
The benefits of the adoption of IFRS in Sudan

Frequencies Do
Strongly Strongly
Benefits Mean S.D and Agree not Disagree
agree disagree
Percentage know

1.Facilitates the growth of Frequencies 27.00 17.00 0.00 3.00 3.00

foreign direct investment to the
Sudan 4.24 1.13 Percentage % 54.00 34.00 0.00 6.00 6.00

Frequencies 20.00 18.00 1.00 8.00 3.00

2.Reduces the possibility of
illegal acts, such as frauds 3.88 1.27 Percentage % 40.00 36.00 2.00 16.00 6.00

Frequencies 26.00 22.00 2.00 0.00 0.00

3.Enhance the comparability of
financial reports 4.48 0.58 Percentage % 52.00 44.00 4.00 0.00 0.00

4. Transparency and reliability Frequencies 30.00 16.00 0.00 4.00 0.00

of financial reports of the
4.44 0.86 Percentage % 60.00 32.00 0.00 8.00 0.00
companies will be ensured.
Source: prepared by the researcher (2017)
Table (4.29) illustrates the opinions of the respondents about the benefits of the
adoption of IFRS in Sudan. The descriptive statistics shows that the respondents highly
support all the potential benefits. This is reflected in the high mean values, which range

142
 (between 4.48 and 3.88), the standard deviation (between 0.85 and 1.27). Also, the table
highlights that 96% from the total sample support the third benefit, namely: Enhance the
comparability of financial reports, while 76% from the total sample support the second
benefit, namely: Reduces the possibility of illegal acts, such as frauds. In general, the
mean values and percentages express that the respondents strongly agree with all the
suggested benefits that can be obtained from the adoption of IFRS in Sudan.
The results from the table and descriptive statistics demonstrate that there is a consensus
among the respondents, since they give a high support to all the potential benefits from
the adoption of IFRS in Sudan.
Opinions about the state of the accounting profession in Sudan
To evaluate the current state of accounting profession in Sudan, the questionnaire
includes a question about some potential activities that should be conducted by the
accounting profession. Table (4.30) summarizes these activities and the opinions of the
respondents regarding the extent of conducting those activities by the accounting
profession in Sudan.
Table (4.30)
The activities of accounting profession in Sudan
Frequencies Do
Strongly Strongly
Activities Mean S.D and Agree not Disagree
agree disagree
Percentages know

1.Studying and providing solutions 2.70 1.27 Frequencies 5.00 13.00 0.00 26.00 6.00
to the problems facing accounting
firms Percentage % 10.00 26.00 0.00 52.00 12.00

2. Developing a code of ethics 2.64 1.14 Frequencies 5.00 7.00 7.00 27.00 4.00

Percentage % 10.00 14.00 14.00 54.00 8.00

3.Developing accounting 2.64 1.19 Frequencies 5.00 9.00 4.00 27.00 5.00
principles that are suitable to
Sudan Percentage % 10.00 18.00 8.00 54.00 10.00

4.Developing effective auditing 2.98 1.20 Frequencies 6.00 14.00 6.00 21.00 3.00
procedures
Percentage % 12.00 28.00 12.00 42.00 6.00

5. Conducting effective research Frequencies 9.00 12.00 2.00 21.00 6.00

2.94 1.38
programs in accounting
Percentage % 18.00 24.00 4.00 42.00 12.00

Source: prepared by the researcher (2017)

143
 Table (4.30) reports the opinions of the professors about the accounting profession in
Sudan. It appears that the options of disagree and strongly disagree are prevalent
regarding the activities that should be conducted by the accounting profession in Sudan.
This can be indicated by the lower mean values that were presented by the respondents
for all the listed activities. The mean values range between (2.98) and (2.64), while the
standard deviation is between (1.14) and (1.38). Moreover, the percentages of
agreement with those activities reflect a low support, so the percentages of agreement
range between 42% and 24% from the total sample. This clarify that the respondents
negatively evaluate the accounting profession in Sudan due to less attention being given
by the profession to those activities.
The results which were obtained from the table and descriptive statistics indicate that
the accounting profession in Sudan is still very weak and doesn’t give attention to its
basic activities. This is reflected mainly in the negative features of the accounting
system in the country such as: government domination, unsuitability of accounting
information to the local users and delay in the preparation of financial statements.

The role of academic institutions in improving the accounting profession

As a result of the situation of the accounting profession in Sudan, a question about the
roles of academic institutions in improving accounting profession in the country was
included in the questionnaire. The following table summarizes some of the roles and
illustrates the opinions of the professors in Universities and academic institutions.

Table (4.31)
The role of academic institutions in improving the accounting profession
Frequencies
Strongly Do not Strongly
Roles Mean S.D and Agree Disagree
agree know disagree
Percentages

1.Improve the basic 4.76 0.43 Frequencies 38.00 12.00 0.00 0.00 0.00
accounting education
Percentage % 76.00 24.00 0.00 0.00 0.00

2. Effective academic 4.79 0.43 Frequencies 40.00 10.00 0.00 0.00 0.00
training for accounting
personnel Percentage % 80.00 20.00 0.00 0.00 0.00

144
3. Effective professional 4.38 0.81 Frequencies 26.00 20.00 1.00 3.00 0.00
training for accounting
personnel Percentage % 52.00 40.00 2.00 6.00 0.00

4. Seminars and training 4.74 0.44 Frequencies 37.00 13.00 0.00 0.00 0.00
courses to government
employees Percentage % 74.00 26.00 0.00 0.00 0.00

5. Provide the Frequencies 33.00 17.00 0.00 0.00 0.00

recommendations and 4.66 0.48
advice for developing
accounting concepts Percentage % 66.00 34.00 0.00 0.00 0.00

6.Assess of accounting Frequencies 35.00 15.00 0.00 0.00 0.00

curriculum in the 4.70 0.46
Secondary level as well as
in University level Percentage % 70.00 30.00 0.00 0.00 0.00

7. Provide a research base Frequencies 27.00 22.00 1.00 0.00 0.00

4.52 0.54
for local purposes
Percentage % 54.00 44.00 2.00 0.00 0.00

Source: prepared by the researcher (2017)

Table (4.31) and descriptive statistics show that the mean values range between (4.79)
and (4.52) and the standard deviation between (0.43) and (0.81), which indicates that
the respondents strongly agree about all roles listed in the table for improving the
accounting profession in Sudan. The respondents gave full agreement (100%) to all the
roles listed in the table, except the last role (98%) and the third role (92%). This
indicates that the respondents strongly agree with all the given roles that can be
conducted by the academic institutions for improving the accounting profession in
Sudan.
The high mean values and percentages express strong evidence that the academic
institutions can play a significant role in improving the state of accounting profession in
Sudan.

The challenges of accounting practices in Sudan

The following table (4.32) represents the opinions of the professors in the Sudanese
Universities and Institutions about the challenges facing accounting practices in the
Sudan.

145
 Table (4.32)
The challenges of accounting practices in Sudan

Frequencies
Strongly Do not Strongly
Challenges Mean S.D and Agree Disagree
agree know disagree
Percentages

1. Shortage of qualified 3.74 1.27 Frequencies 17.00 18.00 3.00 9.00 3.00
accountants at all levels and
in all areas of accounting Percentage % 34.00 36.00 6.00 18.00 6.00

2.Lack of adequate financial 3.74 1.34 Frequencies 17.00 20.00 1.00 7.00 5.00
reports Percentage % 34.00 40.00 2.00 14.00 10.00

3. Lack of adequate auditing 3.74 1.23 Frequencies 16.00 20.00 0.00 13.00 1.00
standards Percentage% 32.00 40.00 0.00 26.00 2.00

4.Lack of strong national 4.30 1.09 Frequencies 30.00 12.00 3.00 3.00 2.00
associations of accountants Percentage% 60.00 24.00 6.00 6.00 4.00

5.Lack of adequate Frequencies 21.00 20.00 1.00 6.00 2.00

4.04 1.14
accounting in government-
owned businesses Percentage% 42.00 40.00 2.00 12.00 4.00

6.Accounting practices are

Frequencies 24.00 18.00 3.00 3.00 2.00
viewed and utilized primarily
4.18 1.06
as a means for helping
companies evade taxes
Percentage % 48.00 36.00 6.00 6.00 4.00

7. Lack in financial disclosure 4.22 0.76 Frequencies 18.00 28.00 1.00 3.00 0.00
requirements Percentage % 36.00 56.00 2.00 6.00 0.00

8. The weakness of the Frequencies 10.00 16.00 0.00 18.00 6.00

accounting curricula which 3.12 1.41
are adopted in local faculties
and universities Percentage % 20.00 32.00 0.00 36.00 12.00

9.The lack of teaching staff Frequencies 22.00 18.00 1.00 3.00 6.00
sufficiently qualified to teach
3.94 1.35
advanced subjects to improve Percentage% 44.00 36.00 2.00 6.00 12.00
accounting and auditing

Source: prepared by the researcher (2017)

146
From table (4.32) it can be noted that the respondents give a remarkably high level of
support to the fourth challenge, which is viewed as a very significant challenge facing
the accounting practices in Sudan, namely: Lack of strong national associations of
accountants. Its mean value is (4.30), followed by the seventh challenge, namely: Lack
in financial disclosure requirements, with mean value of (4.22). The lowest mean value
(3.12) is given to the eighth challenge, namely: The weakness of the accounting
curricula which are adopted by the local faculties and universities. The standard
deviation for all challenges range between (0.76) and (1.41). The highest percentage of
agreement is (84%) and the lowest is (52%).
The results from the table and descriptive statistics demonstrate that in general, there is
a high level of agreement presented by the respondents for the challenges facing
accounting practices in Sudan. The significant challenges are: Lack of strong national
associations of accountants, Lack in financial disclosure requirements and Accounting
practices are viewed and utilized primarily as a means for helping companies evade
taxes.

Suggestions for improving the accounting practices in Sudan

This part offers essential elements which were proposed for improving accounting
practices in Sudan. Therefore, the following table (4.33) shows the opinions and
perceptions of the professors in the Sudanese Universities and institutions about those
elements for improving the accounting practices in Sudan.

147
 Table (4.33)
The essential elements for improving the accounting practices in Sudan
Mean S.D Frequencies Strongly Agree Do Disagree Strongly
Elements and agree not disagree
Percentages know

1. Active accounting 4.64 0.53 Frequencies 33.00 16.00 1.00 0.00 0.00
Organizations
Percentage % 66.00 32.00 2.00 0.00 0.00

2. Accounting principles 4.36 0.92 Frequencies 28.00 17.00 0.00 5.00 0.00
suitable to the local
environment Percentage % 56.00 34.00 0.00 10.00 0.00

3. Official auditing 4.48 0.58 Frequencies 26.00 22.00 2.00 0.00 0.00
authorization
Percentage % 52.00 44.00 4.00 0.00 0.00

4. Greater support from the 4.48 0.58 Frequencies 26.00 22.00 2.00 0.00 0.00
government
Percentage % 52.00 44.00 4.00 0.00 0.00

5.Effective educational 4.64 0.48 Frequencies 32.00 18.00 0.00 0.00 0.00
programs
Percentage % 64.00 36.00 0.00 0.00 0.00

6.Cooperation with 4.72 0.45 Frequencies 36.00 14.00 0.00 0.00 0.00
international organizations
(such as IASB) Percentage % 72.00 28.00 0.00 0.00 0.00

7.Postgraduate training for 4.78 0.42 Frequencies 39.00 11.00 0.00 0.00 0.00
accountants
Percentage % 78.00 22.00 0.00 0.00 0.00

Source: prepared by the researcher (2017)

Table (4.33) and the descriptive statistics illustrate that there is an outstanding level of
support given by the respondents to all the stated elements to improve accounting
practices in Sudan. This can be noted from the high mean values, which range between
(4.78) and (4.36) and the standard deviation (between 0.42 and 0.92). The seventh,
sixth, and fifth elements have remarkably high levels of support from the respondents,
their mean values are: (4.78), (4.72) and (4.64) respectively. Also, they obtained full
percentages (100%) of general agreement. The percentages of agreement are ranging
between (100%) and (90%). These high percentages of agreement represent
assertiveness for the strong support that has been given by all the respondents to the
proposed elements for improving the accounting practices in Sudan.

148
 The result from the table and the descriptive statistics demonstrate that there is a clear
consensus of agreement among the respondents about all the proposed elements. The
significant elements for improving accounting practices in Sudan are: Postgraduate
training for accountants, Cooperation with international organizations (such as IASB)
and Effective educational programs.
The role of government in improving accounting practices in Sudan
In addition to the previous elements for improving accounting practices in Sudan, all the
respondents (100%) believe that the government should take its place in the
improvement of accounting practices in the country. Therefore, the questionnaire
presents other methods and means by which the government could improve the
accounting practices. The following table summarizes these methods and illustrates the
opinions of the respondents about them.
Table (4.34)
Methods and means by which the government could improve accounting practices in Sudan

Mean S.D Frequencies Strongly Agree Do not Disagree Strongly

Methods and agree know disagree
Percentages

4.64 0.56 Frequencies 34.00 14.00 2.00 0.00 0.00

1.Provide financial support to
the accounting profession
Percentage % 68.00 28.00 4.00 0.00 0.00

2. Provide financial support to 4.78 0.42 Frequencies 39.00 11.00 0.00 0.00 0.00
the accounting legislation.
Percentage % 78.00 22.00 0.00 0.00 0.00

3.Establish a licensing 4.64 0.48 Frequencies 32.00 18.00 0.00 0.00 0.00
authority for setting standards
for admission into accounting 64.00 36.00 0.00 0.00 0.00
practice Percentage %

4.Establish a broad national 4.54 0.71 Frequencies 31.00 17.00 0.00 2.00 0.00
committee to advance
accounting education Percentage % 62.00 34.00 0.00 4.00 0.00

5.Establish a broad national 4.62 0.49 Frequencies 31.00 19.00 0.00 0.00 0.00
committee to advance
accounting practices Percentage % 62.00 38.00 0.00 0.00 0.00

6. Establish a governmental 4.36 0.94 Frequencies 27.00 19.00 1.00 1.00 2.00
agency responsible for
advancing accounting practices Percentage % 54.00 38.00 2.00 2.00 4.00

Source: prepared by the researcher (2017)

149
Table (4.34) shows the perceptions of the respondents about additional methods and
means by which the government could improve the accounting practices in Sudan. The
descriptive statistics illustrate that the highest mean value is (4.78), the lowest is (4.36),
while the standard deviation ranges between (0.42) and (0.94). In general, all the
respondents (100%) agree that the second, third and fifth methods are more likely to be
adopted by the government for improving accounting practices in country. These are
followed by the first and fourth methods, which have identical percentages of general
agreement (96%).The last method is the sixth method which has a general agreement of
(92%). This indicates that the respondents strongly agree about all the listed methods
whereby the government could improve the accounting practices in Sudan.
The result from the above table emphasizes that there is absolute agreement presented
by the respondents regarding the role of the government in improving accounting
practices in Sudan. This role can be achieved through the previous illustrated methods
in particular: Provide effective accounting legislation, Establish a licensing authority for
setting standards for admission into accounting practice and Establish a broad national
committee (including accountants and non-accountants) to advance accounting
practices.

4.4. Comparison of the results and testing the hypotheses

This section aims to conduct a comparison between the attitudes of practitioners in the
Sudanese industrial companies, from one side, and the view of professors in the
Sudanese Universities and institutions, from the other side. The two Sides will deal with
the status of the financial reporting in the country. This part depends mainly on the data
analyzed in the previous parts and will use the figures to express the results of the two
perspectives. Moreover, this part aims to use the results of the comparisons in testing
the hypotheses.

The results related to the environmental factors affect the financial reporting in
Sudan

The questionnaires included a question about the environmental factors that affect the
financial reporting in Sudan. The following table (3.35) and figure represent the
opinions of the two surveyed groups:

150
 Table (4.35)
Comparison of opinions about the factors affecting the financial reporting in Sudan
Practitioners perspective Professors perspective Mann
Factors Whitney
Mean S.D Mean S.D U test

1.Type of economic system 3.82 1.01 4.40 0.93 0.063

2.Culture value 3.65 0.99 4.46 0.84 0.000*

3.Political system 3.94 1.18 4.06 0.91 0.156

4.Legal system 4.02 0.75 4.44 0.61 0.973

5.Colonial inheritance 3.49 1.45 4.04 1.09 0.001*

6.Accounting education 4.31 0.80 4.52 0.50 0.075

7.Nature of businesses’ 4.35 0.75 4.32 0.84 0.282

Source: prepared by the researcher (2017)

4.35
Nature of businesses’
4.32

4.31 Accounting education

4.52

3.49 Colinail inheritance

4.04

Factors
4.02 Legal system
4.44

3.94 Political system

4.06

3.65 Culture value

4.46

3.82 Type of economic system

4.4

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Mean

Mean practitioners perspective Mean Professors perspective

Figure 9: Factors affecting the financial reporting in Sudan

Source: Prepared by the researcher 2017

151
Table (4.35) and figure (9) show the opinions of the two groups of respondents
depending on the mean value of each factor. The descriptive statistics in table shows
that the options of “strongly agree” and “agree” for the factors affecting financial
reporting in Sudan are prevalent. This can be drawn from the mean values presented by
practitioners ranging (between 4.35 and 3.49) and the standard deviation (ranging
between 0.75and 1.45). Also, the mean value presented by academics ranges between
(4.52) and (4.04) and the standards deviation (between 0.50 and 1.09). It seems that
there is a slight variation between the two perspectives regarding the second and fifth
factors. The mean value of the factor: Culture value is (4.46) from the professors’ view,
while it is (3.65) from the practitioners’ perspective. Also, the mean value of the factor:
Colonial inheritance is (4.04) from the view point of the professors, while it is (3.49)
from the practitioners’ perspective. Moreover, the Mann Whitney U test revealed that
the difference in the responses and perceptions of the two groups are not significance (at
a 0.05 level for all factors, except for the second and the fifth factors).
With regards to the second factor, namely: Culture value, the professors give more
support to this factor than the practitioners. While 62% of the professors strongly agree
that the culture value is an effective factor in the financial reporting in Sudan, only
19.01% of the practitioners strongly agree about this factor. On the other hand, 6% of
the professors disagree against 16.20% of practitioners disagree. Also, only 4% of the
professors gave a neutral opinion “Do not know” against 19.72% of the practitioners
that gave the response “Do not know”. The general agreement (strongly agree plus
agree) about the second factor is 90% of professors and 63.38% of accountants. This
indicates that the difference between the two groups in the levels of agreement (strongly
agree and agree) is more than between agreement and disagreement.
Concerning the fifth factor, namely: Colonial inheritance, in spite of the similarity in
perceptions of both groups which is reflected in the close percentages which is given for
“strongly agree” (42.25% of practitioners, 40% of the professors), there are significant
differences in the rest of the levels. While 40% of the professors “agree” about this
factor, only 7.04% of the practitioners “agree”. Also, while only 12% of the professors
“disagree”, there are 34.51% of practitioners that “disagree”.

152
 This indicates that the responses and results of the two groups are not significantly
different in most of the given factors, as reflected by the Mann Whitney U test. This
holds an opinion that there is a high level of agreement inside each group, as well as
between the two groups, regarding the given factors affecting the financial reporting in
Sudan. This is strong evidence to accept the first hypothesis: Numerous historical,
cultural and economic factors have resulted in unsatisfactory condition of financial
reporting in Sudan and other Arab countries.
Therefore, the factors that affect the financial reporting in Sudan from the two
perspectives are: accounting education, nature of business ownership, legal system, type
of economic system, political system and culture value.

The results related to the state of accounting profession in Sudan

To evaluate the state of accounting profession in Sudan, the questionnaires included a

question about the activities of accounting profession in the country. The following
table and figure illustrates the perspectives of the two surveyed groups about the case.

Table (4.36)
Comparison of opinions about the activities of accounting profession in Sudan
Practitioners perspective Professors perspective Mann
Activities Whitney
Mean S.D Mean S.D U test

1.Studying and providing solutions to the 2.59 0.94 2.70 1.27 0.319
problems facing accounting firms
2. Developing a code of ethics 2.49 0.80 2.64 1.14 0.058

3.Developing accounting principles that 2.79 1.00 2.64 1.19 0.133

are suitable to Sudan
4.Developing effective auditing 2.88 0.85 2.98 1.20 0.071
procedures
5.Conducting effective research 2.75 1.05 2.94 1.38 0.005*
programs in accounting
Source: prepared by the researcher (2017)

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 2.75 Conducting effective research programs in
2.94 accounting

2.88 Developing effective auditing procedures

2.98

The activities
2.79 Developing accounting principles that are suitable
2.64 to Sudan

2.49 Developing a code of ethics

2.64

2.59 Studying and providing solutions to the problems

2.7 facing accounting firms

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Mean

Mean practitioners perspective Mean professors perspective

Figure 10: The activities of accounting profession in Sudan

Source: Prepared by the researcher 2017
Table (4.36) and figure (10) demonstrate that there is disagreement about all the given
activities from the both perspectives. This can be noted from the low mean values given
by all the respondents for all the listed activities. From the perspective of accountants’
sample, the mean values range between (2.88) and (2.49), while the standard deviation
ranges between (0.80) and (1.05). A similar level of agreement was presented by the
professors, where the mean value ranges between (2.98) and (2.64) and the standard
deviation is between (1.14) and (1.38). This indicates that most of the respondents from
the two groups believe that the accounting profession in Sudan is doing little or not
doing these activities. The results of Mann Whitney U test illustrates that there is no
significant difference (at a 0.05 level) in the responses and perceptions of the two
surveyed groups about the activities of accounting profession in Sudan. Exception is
given to the fifth activity, namely: Conducting effective research programs in
accounting. The respondents gave close levels of disagreement about this activity (54%
of professors, 47.89 of practitioners). There is a slight difference at a 0.05 level between
the two groups in the levels of agreement and “Don’t know”. While 42% of the
professors “agree” that the accounting profession is conducting effective research
programs in accounting, only 26.05 % of the practitioners “agree” about the case. Also,
while 26.06% of practitioners choose “Do not know”, only 4% of professors choose
“Do not know” about the case.

154
 Since the significant difference regarding the fifth activity is only in the levels of
agreement, this reveals that all the respondents from the two groups disagree about all
the given activities. This indicates that the respondents of the two groups believe that
the accounting profession in Sudan doesn’t participate in those activities. Therefore, the
accounting profession in Sudan is weak, undeveloped and lags behind the modern
development in the world.

The results related to the reasons of unsuitability of accounting information to the

local users

The two groups of respondents strongly believe that the accounting information is
unsuitable to the needs of the local users. Therefore, the questionnaire presented some
reasons that may have led to this problem. The following table and figure represent the
opinions of the two surveyed groups of respondents about these reasons.

Table (4.37)
Comparison of opinions about the reasons of unsuitability of accounting information to
the needs of the local users in Sudan

Accountants perspective Professors perspective Mann

Reasons Whitney
Mean S.D Mean S.D U test

1.Accounting system was created in the model 4.38 0.89 3.90 1.33 0.980
of advanced accounting practices of former
colonial (UK)
2.The weakness and inadequacy of accounting 3.59 0.96 3.79 1.10 0.061
education
3.Government domination over the 4.53 0.80 3.79 1.32 0.885
accounting professional bodies
4.The weakness of regulatory system 3.94 0.71 4.08 0.87 0.001*

5.The absence of government legislation to 4.38 0.89 3.90 1.33 0.984

organize the accounting disclosure system
Source: prepared by the researcher (2017)

155
 4.39 The absence of government legislation to
4.1 organize the accounting disclosure

3.94
4.08
The weakness of regulatory system

The reasons
4.53 Government domination over the
3.79 accounting professional bodies

3.59 The weakness and inadequacy of

3.79 accounting education

4.38 Accounting system was created in the

3.9 model of accounting of former…

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Mean

Mean practitioners perspective Mean professors perspective

Figure 11: The reasons of unsuitability of information to the local users in Sudan
Source: Prepared by the researcher 2017

Table (4.37) and figure (11) demonstrate the perceptions of the two groups of
respondents about the reasons of unsuitability of accounting information to the local
users in Sudan. As illustrated in the table, the highest mean value from the view of
practitioners is (4.53) and the lowest is (3.59), while the standard deviation ranging
between (0.96) and (0.71). From the view of the professors, the highest mean value is
(4.10) and the lowest is (3.79), with a standard deviation between (0.87 and 1.33). It
seems that there is a general level of agreement presented by the two groups with simple
variation in the ranking of the some reasons. For example, while the government
domination over the accounting professional bodies is a very important reason in the
point of view of the practitioners (mean value 4.53), it is not on same level of
importance in the view of the professors (mean value 3.79). The most important reason
according to the view of the professors is the absence of government legislation to
organize the accounting system (mean value 4.10). The Mann Whitney U test shows
that the perceptions of both groups for all the reasons are not significantly different (at a
0.05 level) except for the fourth reason.
With regard to the fourth reason, the respondents of the two groups gave close
percentages for all the options, except in the levels of “strongly agree” and “agree”, but

156
it is also similar in the general agreement (strongly agree plus agree). While the 35.9%
of professors “strongly agree” about the weaknesses of the regulatory system, only
18.03% of the practitioners “strongly agree”. Also, while 62.30% of practitioners
“agree”, only 41.03% of professors “agree” about the case. As a result, the general
agreement between the two groups is similar (80.33 of practitioners, 76.93% of
professors). Moreover, the two groups also gave similar percentages of disagreement
regarding the case (4.10% of the practitioners, 5.12% of professors).
Depending on the data presented above, the reasons of unsuitability of accounting
information to the local users are: Government domination over accounting professional
bodies. The absence of government legislation to organize the accounting system,
Accounting system was created in the model of advanced accounting practices of
former power colonial (UK), The weakness and inadequacy of accounting education
and The weakness of regulatory system.
The final result of table (4.36) and figure (10) is that accounting profession is lagging
behind modern development in the world, with considering that one of the results in
table (4.37) and figure (11) is that the government domination over the accounting
bodies is the most significant reason of unsuitability of accounting information to the
local users in Sudan. Therefore, these final results strongly support the acceptance of the
second hypothesis: The government domination over the accounting professional bodies
in Sudan makes accounting profession lags behind the modern development in the
world.
As it is already proven through table (4.37) and figure (11), accounting system in Sudan
provides unsuitable information to the local users, due many reasons. One of reasons is
that the accounting system was created in the model of advanced accounting practices
of former colonial (UK). This is consistent with the fourth hypothesis, which said:
Accounting system in Sudan is providing inappropriate information for specific local
users, because it’s created in the model of advanced accounting practices of former
colonial power - United Kingdom

The results related to the state of accounting education in Sudan

Accounting education was mentioned in table (4.35) and figure (9) as a significant
factor that affects the financial reporting in Sudan and subsequently mentioned in table

157
(4.37) figure (11) as one of the reasons of unsuitability of accounting information to the
local users in the country.
For more information about accounting education the questionnaire that was issued to
the professors included a question about the capabilities of accounting graduates from
Sudanese Universities. The data analysis illustrates that most of the respondents (80%)
believe that the accounting graduates from the Sudanese’s Universities are inadequately
prepared to meet the professional demands, due to a lot of reasons. The following figure
represents the opinions of the professors about these reasons.

Most professors no longer felt their responsibility to be

3.08
training students for employment

Most accounting text books are based on the business

3.45
environment of developed countries

The reasons
Large numbers of students in class may lead to less
4.8
chance of discussion

Inadequate computer facilities and others support

4.28
equipment and resources

The absence of the government‘s role in guiding

3.58
accounting education and control it

3.43 The weakness of the courses content and curriculum

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Mean

Figure 12: The reasons of the inadequate preparation of accounting graduates of the
Sudanese Universities and Institutions
Source: Prepared by the researcher 2017
The data in the above figure (12) depend on the table (4.22), which was presented
previously in part 4.3. It illustrates that there is general agreement represented by the
respondents to all listed reasons of inadequacy of accounting graduates of the Sudanese
universities and institutions. It is clear from the mean values, which ranges between (4.8
and 3.08). The figure appears a strongly level of agreement given by the respondents for
two reasons, namely: Large numbers of students in class may lead to less chance of
discussion and Inadequate computer facilities and other support equipment and
resources. This is notable from the values of mean: (4.80) and (4.28) respectively.

158
 Moreover, accounting education was mentioned as one of the challenges that are facing
the accounting practice in Sudan. Depending on these results about the state of
accounting education and its effects on the financial reporting, as well as the accounting
practices in the country, the third hypothesis accepted states: The lack of systematic
accounting education hampers the development of accounting practices in Sudan.

The results related to the difficulties that prevent the adoption of IFRS in Sudan
The two groups of respondents believed that it is not possible to adopt IFRS
currently in Sudan, due to many difficulties. The following table and figure highlights
the two perspectives about this case.
Table (4.38)
Comparison of opinions about the difficulties that prevent adoption of IFRS currently in Sudan
Accountants perspective Professors perspective Mann
Difficulties Whitney
Mean S.D Mean S.D U test

1. Weakness of regulatory system. 4.03 0.64 4.02 1.02 0.826

2. Weakness of accounting education. 3.68 0.83 4.00 0.86 0.362

3. Weakness of accountants' skills 3.05 1.10 4.02 0.98 0.048*

4. Most of the businesses are family 3.75 1.21 4.55 0.74 0.071
businesses.
5. IFRS are based on Anglo- American 3.96 1.10 3.76 1.46 0.051
thought which is not suitable to the local
environment.
6. Islamic banks and other financial 3.89 0.82 4.21 1.16 0.710
institutions should follow Islamic
accounting standards despite the
convergence.
7. Training of staff to understand and 4.50 0.52 4.40 0.50 0.010*
implement IFRS.
8. The high cost of developing the 4.30 0.89 4.10 1.01 0.758
infrastructure and resources to support
professionals working on IFRS.

159
 4.3 The high cost of developing the infrastructure to
4.1 support professionals working on IFRS

4.5 Training of staff to understand and implement

4.4 IFRS

3.89 Islamic banks should follow Islamic accounting

4.21 standards despite the convergence

3.96 IFRS are based on Anglo- American thought

Difficulties
3.76 which is not suitable to the local environment

3.75 Most of the businesses are family businesses

4.55

3.05 Weakness of accountants' skills

4.02

3.68 Weakness of accounting education

4

4.03 Weakness of regulatory system

4.02

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Mean

Mean practitioners perspective Mean professors perspective

Figure 13: The difficulties that prevent the adoption of IFRS currently in Sudan
Source: Prepared by the researcher 2017
Table (4.38) and Figure (13) show the perceptions of the professors and practitioners in
Sudan about the difficulties that prevent the adoption of IFRS in the country. According
to the accountants’ sample view, the highest mean value is (4.50), and the lowest is
(3.05), while the lowest standard deviation is (0.52) and the highest is (1.21). The
professors’ sample shows, that the highest mean value is (4.55) and the lowest is (3.76).
Also, the lowest standard deviation is (0.50) and the highest standard deviation is (1.46).
The professors’ view presents a high support to all the listed difficulties, in comparison
with the accountants’ view. This can be noted from the high mean value presented by
the professors’ sample to all difficulties, which is mostly more than (4.00), in
comparison with the mean value presented by the accountants’ sample, which is mostly
more than (3.00). The results obtained are mostly similar in presenting a high level of
agreement about all the given difficulties, but there is a slight difference in their
opinions about the second and third difficulties, namely: The weakness of accounting

160
skills and the Weakness of accounting education. This is because the practitioners give
less support to those difficulties (mean values 3.05 and 3.68), while the mean value
from the view of the professors for the same difficulties are (4.02) and (4.00)
respectively. However, the results from Mann Whitney U test, presents identical view
about the third difficulty. The difference between both groups is significant at a 0.05
level, while it is not significant about the second difficulty. Also, the Mann Whitney U
test shows that there is another significant difference at a 0.05 level, about the seventh
difficulty (Training of staff to understand and implement IFRS), while there is no
significant differences at a 0.05 level between both groups about all the other
difficulties.
Regarding the significant difference in the third difficulty (Weakness of accountants’
skills) the descriptive statistics demonstrate that, while 30.95% of the professors
“strongly agree” about this difficulty, only 12.28% of accountants present “strongly
agree” for the case. Also, while 45.61% of accountants “disagree”, only 7.14% of
professors “disagree” about the case. With regards to the seventh difficulty (Training of
staff to understand and implement IFRS), according to the descriptive statistic, the view
of both groups is identical in the option of “disagree” (none of the respondents from the
two groups choose disagree about the case), but there are differences in the options of
“strongly agree” and “disagree”. While 50.88% of accountants “strongly agree”, only
40.48% of professors “strongly agree”. Also, there are 59.52% of professors “agree”,
while 48.25% of accountants “agree”. As a result, both groups show similar percentage
of general agreement (strongly agree plus agree), which is 100% of professors and
99.13% of accountants (there is only one respondent (0.87%) of accountants that choose
“Do not know”).
This indicates a strong consensus of agreement about all the given difficulties, despite
the significant differences that showed on the two mentioned difficulties (The weakness
of the accountants’ skills and The training of staff to understand and implement IFRS).
The result from the above figure demonstrated that the difficulties that prevent the
adoption of IFRS in Sudan are: The high cost of developing the infrastructure and
resources to support professionals working on IFRS, Weakness of regulatory system,
Most of the businesses are family businesses, Islamic banks and other financial
institutions should follow Islamic accounting standards despite the convergence, IFRS

161
 are based on Anglo- American thought which is not suitable to the local environment,
The weakness of accounting education, Training of staff to understand and implement
IFRS and The weakness of accounting skills. Depending on these results, the fifth
hypothesis is accepted, which said: The weakness of regulatory system and accounting
education, as well as the nature of business ownership, limits the adoption of IFRS in
Sudan.

The results related to the benefits of the adoption of IFRS in Sudan

The following table and figure show the expected benefits of the adoption of IFRS in
Sudan, from the two perspectives.
Table (4.39)
Comparison of opinions about the benefits of the adoption of IFRS in Sudan
Accountants perspective Professors perspective Mann
Benefits Whitney
Mean S.D Mean S.D U test

1.Facilitates the growth of foreign direct 4.44 0.85 4.24 1.13 0.744
investment in Sudan
2.Reduces the possibility of illegal acts, such 4.32 0.99 3.88 1.27 0.541
as frauds
3.Enhance the comparability of financial 4.46 0.78 4.48 0.58 0.053
reports
4.Transparency and reliability of financial 4.49 0.78 4.44 0.86 0.759
reports of the companies will be ensured
Source: prepared by the researcher (2017)

162
 4.49 Transparency and reliability of financial
4.44 reports of the companies will be ensured.

4.46 Enhance the comparability of financial

4.48 reports

Benefits
4.32 Reduces the possibility of illegal acts, such
3.88 as frauds

4.44 Facilitates the growth of foreign direct

4.24 investment to the Sudan

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

Mean

Mean practitioners perspective Mean professors perspective

Figure 14: The potential benefits from the adoption of IFRS in Sudan
Source: Prepared by the researcher 2017
Table (4.39) and figure (14) highlight the perceptions of the professors and practitioners
about the benefits that might be obtained through the adoption of IFRS in Sudan. From
the perspective of the accountants’ sample, the mean values ranging between (4.49), as
the highest mean value and (4.32), as the lowest mean value. Also, the standard
deviation is ranging between (0.78), as the lowest standard deviation and (0.99), as the
highest standard deviation. The same level of agreement is presented by the academics’
sample, with the mean values ranging between (4.48) and (3.88) and also standard
deviation is ranging between (0.58) and (1.13). It seems that there is a strong consensus
between each group of the responders, as well as between the two groups. As revealed
by the result of Mann Whitney U test, the perceptions of both groups are not
significantly different at a 0.05 level for all the given benefits.
The results from the above table and figure depicts the benefits of adopting the IFRS,
which are: Transparency and reliability of financial reports of the companies will be
ensured, enhance the comparability of financial reports, Facilitates the growth of foreign
direct investment to Sudan and Reduces the possibility of illegal acts, such as frauds.
Based on the results regarding the benefits that can be obtained from the adoption of
IFRS in Sudan, the sixth hypothesis is accepted: The adoption of IFRS in Sudan might
improve the quality of information provided by local financial reporting system.

163
4.5. Attitude of the regulatory bodies about financial reporting in Sudan

This part aims to illustrate the attitudes of the regulatory bodies about financial
reporting in Sudan through some of the interview questions. As mentioned previously,
in fact there is no one or single group that is responsible for the regulation of accounting
practice in Sudan. Accounting practice is regulated and organized by the contribution of
different bodies' interferences. Each group has its own objective and practice and the
most effective groups are: Auditors, Certified Accountants, Taxation Chamber, Central
Bank, Academicians and Financial Analysts. In general, accounting practice in Sudan
is regulated mainly by the Companies Act 1925, which was modelled on the UK
companies Act 1908. Despite Sudan gaining independence from UK in 1956 it has not
been amended. Therefore, it is outdated and incapable of meeting demands of the
changing business environment in the country.
This unstable regulatory environment has held back development of financial reports in
the country. As a result, there is no specific financial accounting and reporting standards
that have been adopted in Sudan. Due to this situation, the researcher gathered
information from some regulatory bodies such as: The council regulating the accounting
and auditing profession in Sudan, the national audit chamber, individuals certified
accountants, central bank, taxation chamber and academicians. The interview questions
encompasses: The regulation of the accounting profession, the factors affecting
financial reporting in Sudan, the state of accounting education, and the difficulties of
adopting IFRS in Sudan. The following text includes the opinions of some regulatory
bodies in Sudan.

The Sudan Accounting and Auditing Profession Organization Council (SAAPOC)

This Council introduced in 2004 and it exercises its powers under the law for regulating
the accounting and auditing profession in Sudan (see section 2.4). To illustrate the
attitude of the council about accounting and auditing profession, the following are some
excerpts from the seminar of the Sudan News Agency (SUNA) on the development of
accountancy and audit profession (SUNA, 2014) (www.aapc.gov.sd).

dr Musab Barakat, the chairman of the board of organization of the profession of

accounting and auditing, stated: “There is a gap between the profession and the needs of

164
society”. He also stated “The development of the profession is linked to the
compatibility with the international standards of accounting”.

Mr. Mustafa Bayoumi, the chairman of the committee of foreign relations of the
council, said “The international standards for accounting and auditing are progressing,
but we are not keeping pace with the development. Therefore, we should firstly conduct
internal improvement in the universities curriculum in order to ensure that the students
graduate with high capabilities and good knowledge of international standards”.

These opinions reflect that even the members at the top of the profession bodies, are not
satisfy with the state of accounting and auditing in the country. Therefore, there is
urgent need to develop these professional bodies to be able to fulfill the needs of the
improving the accounting practices in Sudan.

The explanations obtained from the interviews with certified accountants, which
conducted by the researcher, reveals that none of the individuals interviewed were
satisfied with the status of the accounting profession and accounting practices in
general. All the interviewees mentioned that the government intervention in the
formation of accounting bodies’ structures negatively affects the accounting practice
and accounting profession in the country. The negative effect of the government
intervention from the perceptions of the interviewees can be summarized in the
following:

- The current accounting profession body consists of members who are not
accountants and not qualified, because of the imposing of the government
members.
- Enact the legislations that are consistent only with the government expectations.
- Restrict partnerships with similar international accounting organizations due to
political reasons.
Regarding the possibility of the adoption IFRS currently in Sudan, there is a consensus
between the interviewees that it is not possible to adopt the IFRS currently in Sudan,
due to many reasons. The most frequent reasons are:

- The strong government domination over the accounting profession.

- Lack of legal obligation (non- compliance).

165
 - Political factors.
The interviewees also listed a lot of benefits that might be obtained through the
adoption of IFRS in Sudan. These are:

- Rehabilitation of accounting staff.

- Facilitate comparability of the financial reports.
- Facilitates the flow of foreign direct investment to Sudan.
- Facilitate dealing with international organizations.
One of the interviewees said it is possible to adopt IFRS currently in Sudan but there is
no desire or seriousness to do so immediately.

National Audit Chamber (NAC)

The President of the Republic, with the approval of two-thirds majority in the National
Assembly, shall appoint the Auditor general who is professionally qualified to head the
(NAC). The Auditor general shall be separated by the same procedures as he has been
appointed (For history of NAC see the part 2.3.3).
The NAC must control and audit the financial performance of the national government,
including revenue and expenditure in accordance with the budgets approved by the
National legislature and States legislature. Moreover, it must audit the accounts of the
national executive bodies, as well as the accounts of the States, institutions, public
companies, and any institution determined by law. The Auditor General should submit
an annual report to the president of the republic and national council.
As mentioned previously (in 2.3.3) there is a distinction between the theoretical system
of public sector audit in Sudan and the actuality of practice. This is also obtained from
the interviewees who stated that there is variation in accounting practice between
private and government companies. Some of the interviewees state that there is no
accounting system in the public companies as such, so the accounting disclosure is
either weak or non-existent. During the interview with the Director of general
administration for follow-up and statistic in (NAC), he evaluates the state of accounting
practices in Sudan in the following points:

- The financial reports are not the basic sources to make investment and credit
decisions in Sudan, due to certain shortcomings such as: the absences of the full

166
 disclosure, the delay in issuing the financial reports, especially in the public
companies and, from the other side, the weak awareness of the importance of
financial reports by the users.
- The accounting and auditing bodies are independent only theoretically, but in
reality the government intervenes in the formation of these bodies. This lead to
appearances of dominated members who are unqualified.
- The accounting system in Sudan is not able to adopt the IFRS currently due to
some obstacles such as: weak support from government to the accounting and
auditing bodies, especially those are not under its domination, and other political
factors.
Taxation chamber

Direct taxes were administered in the beginning by a small section inside the Ministry
of Finance. Then, they evolved into administrative board and later on into a department.
The real expansion of taxation was in 1967 following a spread of tax offices throughout
the various regions in Sudan. The expansion in regional offices went on till 1984, when
the Chamber opened many tax offices at the provinces all over Sudan. The Chamber of
Taxation executes all the central government tax laws in connection with direct taxes,
such as the Business Profit Tax, which was imposed on individuals, companies and
partnerships. For private and public shareholding companies, including insurance
companies, mining companies and money employment companies, the tax rate is 15%
of the net income, while for the industrial companies and individuals the tax rate is 10%
of the net profit, taking into account the prescribed threshold for the individuals
(www.tax.gov.sd).
In addition to the structured interview questions, the researcher presents a question to
the tax authorities about the extent they depend on the financial reports of the
companies for their decision about the taxes. The question was presented for two of the
financial observers in the Tax Chamber. They state the same view that they don’t trust
the financial statements of the companies, because they know that those statements are
prepared only to avoid taxes. As a result, they rely less on these statements when
making decisions about the companies’ tax.
Regarding the other questions, the financial observers in the Tax Chamber, also
expressed identical views that there are a lot of factors affecting the financial reporting

167
in Sudan and they also focused on the unsuitability of accounting education, the
weakness of the accounting profession and the government intervention. Additionally,
they state that the main feature of financial reports in Sudan does not entail full
disclosure or it is not disclosed at all, especially in government and family companies.
Regarding the possibility of the adoption of IFRS, one of the interviewees from the tax
chamber reply: “we have to think of a unified accounting system firstly, then we can
speak about the possibility of the adoption of IFRS” and he further states, “currently
there isn’t any companies or sector that can adopt the IFRS in Sudan except the banking
sector but only to some extent”. The other interviewee states, despite the fact that there
are many benefits can be obtained from the adoption of IFRS, it is not possible to adopt
the IFRS now in Sudan, because of many obstacles.

Central bank of Sudan (CBOS)

The issuance of the Bank of Sudan Act was in 1959. The Bank opened for business on
February 22, 1960. After concluding the Comprehensive Peace Agreement (CPA), the
Central Bank of Sudan Act 2002 was amended in 2006, wherein the nature of the
banking system, the Bank and its branches, were specified in Section (5) from the Act.
Which stated: The Sudanese banking system shall consist of dual banking system, one
of which is Islamic, in Northern Sudan, and the other Conventional, in Southern Sudan.
After the secession of Southern Sudan, the bank of Southern Sudan became central bank
of the state of Southern Sudan. As a result, the nature of the banking system in Sudan
became only Islamic in nature, which must follow the Islamic law of sharia. Therefore,
the most important objective of the central bank is to discharge the duties and
achievement of the objects, exercise of the powers and supervision thereby of the
banking system by the ordinance of the Islamic law (www.cbos.gov.sd).
The researcher conducted interview with the head of the Banking Control Department,
in the Central Bank of Sudan, to take his opinions about the state of financial reports of
the Sudanese companies and the reasons that made the banking sector in Sudan, more
disciplined in accounting from the rest of the sectors. In regard to the financial reports in
Sudan, he stated that it is characterized with insufficient disclosure and weakness in the
auditing report. Therefore, the banks in Sudan do not depend only on the statements of
the companies to take the credit decision, but also rely on other information in addition

168
to the material guarantee. The banking sector in Sudan is more disciplined due to many
reasons such as: the direct and indirect control over banks by the Central Bank through
periodic inspection over banks and issuing direct instructions in the event of a defect.
About the possibility of adoption of IFRS by the Sudanese banks, he states: it is
possible, but there may be some difficulties in the adoption of international financial
standards that are inconsistent with Islamic law.

Academicians

The researcher conducted an interview with one of the academicians who have a wide
understanding of financial reports in Sudan. He did a study regarding the factors
underlying the gap between the information content of financial reports and the users’
needs in Sudan. Dr. Saadaby M. Ali., University of Gezira, Sudan, currently works in
the Saudi Arabian Universities’. He stated the following points about the accounting
practices in the Sudan:

- The most important factor affecting the financial reports in Sudan is the absence
of strong accounting professional bodies, which have the ability to enact
governing principles and establish a clear and integrated framework for the form
and content of the financial reports in Sudan. The other important factor is the
lack of development in the inherited colonial standards, to cope with the changes
in the economic, financial, legal and social aspects in the country.
- The accounting education is appropriate to the current conditions in Sudan, but it
may not be appropriate if there is any development in the Sudanese environment
or if the country adopted the IFRS, because there is deficiencies in teaching
international accounting standards in the Sudanese Universities. Also,
accounting education may not be helpful if Sudan opened its local economic
environment to the global economy and international investments.
- The accounting system in Sudan is unable to keep pace and adopts the IFRS (not
only Sudan, but all developing countries), because these standards have been
developed for the environment of the developed countries. Therefore, it is not
easy to be adopted by the developing countries, due to many difficulties related
to the different environments.

169
 - The benefits of the adoption of IFRS could help the international companies to
facilitate their accounting work in Sudan in respect of its financial reports. Also
IFRS enable the Sudanese companies to enter the international financial market
and of course, the development of all accounting practices in the country.
Conclusion

The laws and regulations have certainly influenced the evolution of accounting in Sudan
due to the weaknesses or absences of one formal body which is responsible for
organizing accounting issues. The old laws are the only tools that are being used to
organize accounting in the country, without any observation to ensure the
implementation of these laws. Therefore, the preparation of various financial statements
and keeping of various accounting rules and procedures are a result of the companies’
Act 1925, tax laws and others laws. However, due to the simplicity of these laws and
regulations and the weak observation, the majority of accounting issues were not been
considered or standardized. As a result, the companies and accountants have been left
free to practice their own accounting rules and standards which have negative effects in
the accounting practices in Sudan. This situation made the possibility of comparison
very difficult, if not, impossible. Also, it created a large gap between the information
provided by accounting in Sudan and the needs of the local users.

4.6. Analysis of different financial reporting practices in Sudanese companies

The Sudanese industrial companies must fulfill all the requirements of the companies
Act 1925 and the other related laws. The requirements of these laws deal with many
things such as: the registration of companies in the commercial register, accounting
records, financial statements, auditing, budgeting etc. Some of these requirements are
stated clearly by the law, but a lot of them stated in brief . The Sudanese industrial
companies keep dissimilar records, accounts and prepare incomplete statements or do
not prepare any statements at all. It is not possible to list all of these differences. In
some companies one may find an accounting system which includes a chart of accounts
and structured financial statement (for example Kenana sugar company). However, in
other cases one should not expect to find a comprehensive and well-designed
accounting system. In fact, there is diversity of accounting systems because of the

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difference in the level of compliance with companies’ law. Also, one might expect that
there would be limited common features among their accounting practices.

To assess whether the accounting systems of the Sudanese industrial companies fulfil
those requirements, a questionnaire was submitted to these companies and a review of
financial statements of some of the industrial companies in the Library of Ministry of
Industry by the researcher. The questions related to this part of the questionnaire were
designed to get views about: type of companies, type of financial statements, the basis
and method of inventory evaluation, classification of fixed assets and accumulated
depreciation, methods of depreciation, type of internal and external auditing, type of
budgets and tools of preparing budgets.

The types of companies which the respondents work for

Table (4.40) illustrates the frequencies and percentages of the types of companies which
the respondents work for and figure (15) illustrates the graphic representation of this
case.

Table (4.40)
The frequencies and percentages of the types of companies
Types of the company Frequencies Percentages
Public shareholding company 17 12
Private shareholding company 34 23.9
Governmental company 39 27.5
Family company 52 36.6
Total 142 100%
Source: prepared by the researcher (2017)

171
 40 36.6
35

30 27.5
23.9
percentage
25

20

15 12
10

0
Public shareholding Private shareholding Governmental Family company
company company company
Type of the company

Figure 15: The types of companies

Source: Prepared by the researcher 2017
Table (4.40) and figure (15), show that 36.6% from the total sample are family
companies, followed by governmental companies which represent 27.5% from the total
sample study, then private shareholding companies which represent 23.9% from the
total sample and remaining 12% from total sample are public shareholding companies.
This situation of the high percentage of the family companies and government
companies and the low percentage of public shareholding companies in Sudan would
have a negative impact on the quality of financial reporting. Due to the fact that the
government and family companies rarely comply with the law and they reduce the need
of auditing.

The types of financial statements in the Sudanese companies

Table (4.41) presents the types of the financial statements in the Sudanese industrial
companies in percentages, according the view of respondents.

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 Table (4.41)
The types of financial statements in the Sudanese companies
Types of financial statements Percentages

A. Income statement 65%

B. Statement of retained earning 20%
C. financial position statement(balance sheet) 100%
D. Cash flow statement 0
E. All these statements 0
A+C 57%

A+B 0

B+C 16%

Other 0

Source: prepared by the researcher (2017)

Table (4.41) shows that there is a clear variation in the types of the financial statements
in the Sudanese companies. Only the balance sheet is prepared in all the companies and
presents 100%, then income statement presents 65% and the statement of retained
earnings presents 20%. The companies which prepared the statement of balance sheet
and income statement together represents 57% and those that prepared statement of
retained earnings and balance sheet present 16% of the total sample of the study. None
of the companies under study prepared all the listed types of statements and none of
them prepared cash flow statement. This variation in the types of financial statements in
the Sudanese companies and the absence of some statements make the evaluation and
comparison a very difficult task.

Ranking of the users of financial reports according to their importance

To rank the level of importance of the financial reports’ users according to the view of
142 respondents the researcher designs the following scale: highest level of importance
A, second is B, third is C, and fourth is D. where A = 4 points, B = 3, C = 2 and D =1

Table (4.42) illustrates the ranking of the users of the financial reports in Sudan
according to their importance.

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 Table (4.42)
Ranking of the users of financial reports according to their importance
Users of financial reports A=4 B=3 C=2 D=1 Total points Results

Tax authorities 280 126 60 0 466 First

Company's management 112 216 28 28 384 Second

Shareholders and other 56 84 112 44 296 Fourth

potential investors
Banks and other fund 120 42 84 56 302 Third
provider
Source: prepared by the researcher (2017)

Table (4.42) shows that the tax authorities have the highest points (466), followed by
the company management with (384) points and the banks and other fund providers
with (302) points. While the lowest points (296) were obtained by the shareholders and
other potential investors. This indicate that the respondents that rank the users of the
financial reporting put the tax authorities as very important users, while the shareholders
and other potential investors ranked at the lowest level of importance. This ranking of
the users of the financial reports according to their importance correlates with the
ranking in most of the developing countries in which the tax authorities are a very
important user of financial reports.

Regarding the question about any major changes in the accounting system or any
special accounting system different from the prevailing accounting system used in
Sudan, all the respondents mentioned that there are no major changes during the last
five years and also there isn’t any special accounting system in their companies that
differs from what is frequently used in Sudan.

The basis and method of inventory evaluation in the Sudanese industrial companies

Table (4.43) shows the frequencies and percentages of the basis of inventory evaluation
in the Sudanese industrial companies, as shown in figure (16), which indicates a graphic
representation of the case.

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 Table (4.43)
Basis of the inventory evaluation
Basis of inventory evaluation Frequencies Percentages
Market price 14 9.9
Cost price 65 45.8
Lower of cost or market value 63 44.4
Total 142 100%
Source: prepared by the researcher (2017)

100.00%
90.00%
80.00%
70.00%
percentage

60.00%
50.00% 45.80% 44.40%
40.00%
30.00%
20.00%
9.90%
10.00%
0.00%
Market price Cost price Lower of cost or market
value
The basis of inventory evaluation

Figure 16: The basis of inventory evaluation

Source: Prepared by the researcher 2017
From table (4.43) and figure (16) it appears that the cost price is the basis of inventory
evaluation for 45.8% from the total sample of the companies under study. It is followed
by Lower of cost or market value which represents 44.4% of the total companies from
the sample study, while remaining 9.9% of the total sample based on market price. This
indicates that the Sudanese companies are based mostly on the cost price and lower of
cost market or value and the cost of price methods in evaluating their inventory. They
are rarely using the market price in the evaluation of inventory.
The inventory cost methods in the Sudanese industrial companies
Table (4.44) shows the frequencies and percentages of the method of inventory cost in
the Sudanese industrial companies, as shown in figure (17), which indicates a graphic
representation of the case.

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 Table (4.44)
Inventory cost methods
Methods Frequencies Percentages

First In First Out (FIFO) 50 35.2

Last In Firs Out (LIFO) 8 5.6

Simple average 56 39.4

Weighted average 28 19.7

Total 142 100
Source: prepared by the researcher (2017)

100.00%
90.00%
80.00%
70.00%
percentages

60.00%
50.00%
39.40%
40.00% 35.20%
30.00%
19.70%
20.00%
10.00% 5.60%

0.00%
F.I.F.O. L.I.F.O Simple average Weighted average

Inventory cost method

Figure 17: Inventory cost methods

Source: Prepared by the researcher 2017
Table (4.44) and figure (17) show that the simple average is the most utilized method by
the Sudanese’ industrial companies to evaluate the cost of inventory and represent
39.4% of the total sample study, after them First In First Out (FIFO) method represent
35.2% from the total sample study, then the Weighted Average method represents
19.7%. While the remaining 5.6% of the total of the sample study, chose the Last in
First out (LIFO) method. In fact, the Basis and methods of inventory evaluation was not
mentioned by the companies’ law, so this may be the logical reason for the diversity of
these methods in the Sudanese companies.

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Method of classification of fixed assets and depreciation
Table (4.45) illustrates frequencies and percentages of the methods of classification of
fixed assets and the accumulated depreciation applied in the Sudanese industrial
companies.
Table (4.45)
Methods of classification of fixed asset and accumulated depreciation
Methods Frequencies Percentages
Fixed asset – accumulated depreciation 79 56
Fixed asset at book value 17 12
Fixed asset on asset side and accumulated 37 26
depreciation on liabilities side
Other 7 6
Total 142 100
Source: prepared by the researcher (2017)

Based on table (4.45), most of the Sudanese industrial companies (56%) use the method
of fixed asset minus accumulated depreciation in the classification of asset, while 26%
of the total sample study uses fixed asset on the side of the asset and accumulated
depreciation on the side of the liabilities, while only 12% from the total sample study
uses the fixed asset at the book value. The remaining 6% of the total sample uses other
classification. More confusion is added by the fact that many companies (26%) from the
total sample study report fixed asset on one side and accumulated depreciation on the
other side, while only 12% from total sample study reports the book value of fixed
assets.

Methods of depreciation of fixed assets in the Sudanese industrial companies

Table (4.46) illustrates frequencies and percentages of the methods of depreciation of

fixed assets applied in the Sudanese industrial companies, as shown in Figure (18),
which indicates the case.

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 Table (4.46)
Methods of depreciation of fixed assets
Methods Frequencies Percentages

Straight line method 108 76.1

Decreasing balance 24 16.9

Percentage of use 10 7

Total 142 100

Source: prepared by the researcher (2017)

100.00%
90.00%
80.00% 76.10%

70.00%
percentage

60.00%
50.00%
40.00%
30.00%
16.90%
20.00%
7%
10.00%
0.00%
Straight line method Decreasing balance Percentage of use
The methods

Figure 18: Methods of depreciation of fixed assets

Source: Prepared by the researcher 2017
From table (4.46) and Figure (18) it appears that most of the Sudanese industrial
companies (76.1%) of total sample use the straight line method, followed by the
decreasing balance method which represents 16.9% of the total sample and then the
method of percentage of use which represents 7% of the total sample. This indicates that
the Sudanese industrial companies depend mainly on the straight line method in the
depreciation of the fixed assets and rarely use the percentage method.
As mentioned previously by Mirghani (1979) in chapter 3 “ although the Act required
that every company keep proper books of accounts, it failed to specify what constitutes
proper books of accounts”. Moreover, the 1925 companies Act did not specify any basis

178
of accounting that should be followed by companies. Furthermore, the 1925 companies
Act mainly emphasized the preparation of the balance sheet and put little emphasis on
the income statement or even to make it in any specific format and did not require it to
be audited.

Audit of the Sudanese industrial companies

All Sudanese companies are subject to external audit either by the auditor general
chamber or by other auditors appointed by the audit chamber, as stated earlier, the
companies act 1925 section 138 is concerned with the powers and duties of an auditor
(see 2.3.1). The Act did not require auditors to conduct the Audit according to a set of
generally accepted auditing standards nor did it require the auditor to indicate whether
or not the company has prepared its balance sheet according to a set of generally
accepted accounting principles that were consistently followed. Furthermore, the Act
required the auditor to attest to whether or not the balance sheet portrays a true and
correct view of the state of affairs of the company. This is very ambitious since the state
of affairs of a company is much more than what is presented in a balance sheet.

A question about the external auditing adopted by the company revealed that 67.6% of
the total sample study use the financial and compliance (statutory audit), 26.1% of the
total sample study use value of money audit (performance audit), while 6.3% of the
total sample study use other types. Regarding the internal audit, 62.7% of the total
sample study has a section or department specializing in internal audit, but 37.3% do
not have. However, most of those which have internal audit departments still limit their
role to detection of fraud, with focus on examining accounts before payment and
checking petty cash claims. However, the internal audit should be more than routine
check of payments and collecting money and should aim for a continuous evaluation of
internal control system.

Regarding the question about the type of budget adopted by Sudanese companies, it
shows that 85.9% of total sample study prepares a short term budget, only 12.7% of the
total sample prepares a long term budget and use some statistical studies and standard
cost, while the remaining 1.4% of the total sample uses other type of budgets.

179
The state of financial reporting practices in the Sudanese companies

The above discussion of the accounting systems and methods adopted in the Sudanese
industrial companies suggest that there is no specific Sudanese accounting system
because of differences in the accounting practices, which have very little correlation
with each other and minimum common features. Accordingly, it is very difficult to
make a comprehensive list of all the differences and it is much more difficult to analyze
the financial reporting practice in Sudan. Nevertheless, some characteristics can be
obtained as following:

a. The insufficiency and imperfections in the companies Act 1925 lead to large
differences in the accounting practices in Sudan. Although the requirements are very
few and weak and only concerned with the balance sheet statement, some Sudanese
companies hardly comply with it or in some cases do not comply.

b. Although all companies prepare the balance sheet statement, there are a lot of
differences in the methods used in the classification of asset and accumulated
depreciation or in the methods and basis of inventory evaluation, because the Act does
not specify the basis of accounting to be followed by companies. This state makes it
very difficult for any financial analysis that could be based on balance sheet.

c. Regarding the profit and loss account there is no requirement to prepare it. The only
requirement is to disclose the profit for the financial year on the face of the balance
sheet. Therefore, if the profit and loss account is prepared separately, it does not have to
follow any specific format. This lack of format in preparing the profit and loss account
opens a large space for personal judgment and, hence, variations in practice. As a result,
the difficulties arise when making comparisons between companies.

d. The information which is provided by the Sudanese companies is mostly for the
benefit of tax authorities and the management of the companies, while the other users of
information are mostly ignored.

e. Some companies do not have a section or department specializing in internal audit

and the other which have this department limit their role in the routine check of

180
payment and collecting money without any intention of the continuous evaluation of
internal control system.

Summary and conclusion

Most of the above negative characteristics of financial reporting practices of the

Sudanese companies include: the diversity of accounting practices, the unwillingness of
many companies to comply with the law (if it existed), the poor quality of accounting
information and its bias, lack of ability in comparability and the ignorance of the
requirement for audited profit and loss. These have been mostly caused by the weakness
of the regulatory system and, in particular, the shortages of the companies Act 1925,
which was shaped in light of the companies Act 1908 of UK. The evidence suggests
that this act is outdated and incapable of meeting demands of the changing business
environment in the country. Therefore, the preparation of various financial statements
and keeping of various accounting rules and procedures are a result of: companies Act
1925, tax laws and others laws. However, due to the simplicity of these laws and
regulations and the weak observation, the majority of accounting issues were not been
considered or standardized. As a result, the companies and accountants have been left
free to practice their own accounting rules and standards which have negative effects on
the accounting practices in Sudan. This situation made the possibility of comparison
very difficult, if not impossible. Also, it created a large gap between the information
provided by accounting in Sudan and the needs of the local users. This state stressed the
urgent need for improving the regulatory framework of accounting in Sudan.

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 CHAPTER FIVE
PERSPECTIVES FOR IMPROVING THE FINANCIAL
REPORTING SYSTEM IN THE SUDAN
Given the critical role that financial statements play, it is pressing that efforts are made
to examine ways to improve their qualities in order to understand their purpose and
limitations in providing a comprehensive view of an entity’s financial position. As it is
known, the published financial statements will be useful if they provide data, which as
far as possible have been prepared on a basis that is consistent with GAAP or in
compliance with underling obligations. The Sudanese environment is characterized
mainly by: weak accounting and legal frameworks, accounting shortages of skilled
personnel, political interference in accounting bodies and unorganized accounting
education. Therefore, many improvements are needed in the financial reporting
environment in Sudan to produce financial statements that might be able to provide
useful and meaningful information to the different groups of users.
Before recommending proposals, it is worthy to illustrate the opinions of the two groups
of respondents to the empirical study, about the challenges facing the accounting
practices in Sudan. This can facilitate the presentation of suitable proposals from the
view of the two groups of respondents, from the interviewees and also from the
available literature. The following table presents a comparison of the opinions of the
two groups of respondents regarding the challenges facing accounting practices in
Sudan.
Table (5.1)
Comparison of opinions regarding the challenges facing accounting practices in Sudan
Practitioners perspective Professors perspective Mann
Challenges Whitney
Mean S.D Mean S.D U test

1. Shortage of qualified accountants at all 3.84 1.23 3.74 1.27 0.287

levels and in all areas of accounting
2.Lack of adequate financial reports 4.13 0.83 3.74 1.34 0.625

3. Lack of adequate auditing standards 3.90 1.05 3.74 1.23 0.277

4.Lack of strong national associations of 4.54 0.65 4.30 1.09 0.683

accountants
5.Lack of adequate accounting in 3.94 1.10 4.04 1.14 0.665
government- owned businesses

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6.Accounting practices are viewed and 3.96 1.19 4.18 1.06 0.449
utilized primarily as a means for helping
companies evade taxes

7. Lack in financial disclosure 3.76 0.91 4.22 0.76 0.392

requirements
8. The weakness of the accounting 3.30 1.18 3.12 1.14 0.003*
curricula which are adopted in local
faculties and universities
9.The lack of teaching staff sufficiently 4.17 0.89 3.94 1.35 0.449
qualified to teach advanced subjects to
improve accounting and auditing
Source: prepared by the researcher (2017)

Table (5.1) shows the opinions of the respondents from the two groups regarding the
challenges facing accounting practices in Sudan. The descriptive statistics in the table
shows that the options of “strongly agree” and “agree” for the challenges facing
accounting practices in Sudan are prevalent. This can be drawn from the mean values
presented by practitioners, ranging between (4.54) and (3.30) and standard deviation
(between 0.65 and 1.23). Also, the mean values presented by the professors ranging
between (4.30) and (3.12) and the standard deviation (between 0.76 and 1.35). The
highest mean value, as presented by the two groups, was given to the fourth challenge
namely: Lack of strong national associations of accountants (4.50 by the practitioners
and 4.30 by the professors). Surprisingly, the two groups also agree to give lowest mean
value to the eighth challenge namely: The weakness of the accounting curricula which
are adopted in local faculties and universities (3.30 by the practitioners and 3.12 by the
professors).
The Mann Whitney U test, revealed that the difference in the responses and perceptions
of the two groups are not significant at a 0.05 level for all challenges, except for the
eighth challenge. The significant difference between the two groups is on the eighth
challenge, so the descriptive statistics shows that the two groups present the same level
of general agreement (strongly agree plus agree) which is 52.92% of the practitioners
and 52% of professors, from the other side, the difference is clearly in the levels of
general “disagreement” and “Don’t know”, while 48% of professors disagree about this
challenge, there are 37.3% of the practitioners who disagree. Also, while 9.86% of
practitioners chose “Don’t know”, none of the professors chose “Don’t know”.

183
This indicates a strong consensus of agreement between the two groups about all the
given challenges, despite the significant differences that showed on the eighth
challenge. The results from the above demonstrate that the challenges facing the
accounting practices in Sudan are: Lack of strong national associations of accountants,
Accounting practices are viewed and utilized primarily as a means for helping
companies evade taxes, Lack in financial disclosure requirements, The lack of teaching
staff sufficiently qualified to teach advanced subjects to improve accounting and
auditing, Lack of adequate financial reports, Lack of adequate accounting in
government- owned businesses, Shortage of qualified accountants at all levels and in all
areas of accounting, Lack of adequate auditing standards and the Weakness of the
accounting curricula which are adopted in the local faculties and universities. Moreover,
none of the interviewees are satisfied with the accounting practices in Sudan, so all of
them mentioned that the government domination over the accounting bodies and the
weakness of accounting education are the most critical problems facing the accounting
practices in the country.

The challenges can be classified as follow:

- Challenges related to the weakness of the regulatory framework of accounting in

Sudan, such as: Lack of adequate auditing standards, Lack in financial
disclosure requirements, Lack of adequate financial reports and the accounting
practices are viewed and utilized primarily as a means for helping companies
evade taxes and Lack of adequate accounting in government- owned businesses.
- Challenges related to the state of the accounting profession, such as: Lack of
strong national associations of accountants, Shortage of qualified accountants at
all levels and in all areas of accounting and Government domination over the
accounting bodies.
- Challenges related to the state of the accounting education, such as: The lack of
teaching staff sufficiently qualified to teach advanced subjects to improve
accounting and auditing, and The weakness of the accounting curricula which
are adopted in local faculties and universities.

184
 5.1. Possibilities of improving the regulatory framework of accounting in Sudan

An accounting system of a certain country is determined by its national accounting

framework, professional association and the application of IFRS or national accounting
standards. Although the basic feature of accounting in the 21st century is the
harmonization of accounting, there are still many national specifics in the accounting
field that differ from country to country. A national accounting framework plays a key
role in determining the major rules of keeping accounting records, defining charts of
accountants, preparing annual accounts and the application of national and international
standards (Sacer, 2015). As mentioned previously, there is no one or single group that is
responsible for the regulation of accounting practice in Sudan. Accounting practice is
regulated and organized by the contribution of different bodies' interferences. Therefore,
the accounting practices in the country are a complex process with many components,
many interactions and many different actors, roles and responsibilities. The commonly
accepted accounting requirements are in a form of laws which depend mainly on the
companies law 1925, that has not been amended since the independence of the country,
so it is outdated law and incapable of meeting the demands of the changing business
environment.
In the two questionnaires there are many proposals for improvements. The following
table presents a comparison of opinions about the proposals to improve the regulatory
framework and accounting practices in Sudan and the opinions of the respondents from
the two groups.

Table (5.2)
Comparison of opinions about the proposals to improve the regulatory framework and
accounting practices in Sudan
Practitioners perspective Professors perspective Mann
Whitney
Proposals
Mean S.D Mean S.D U test

1. Amendment of Companies Act, particularly the 4.16 0.89 4.54 0.73 0.259
articles which deal with disclosure.
2. Issuance of accounting principles suitable to the 4.01 1.25 4.36 0.92 0.010*
local environment.
3. Official auditing authorization. 4.35 0.71 4.48 0.58 0.152

4. Provide effective accounting legislation. 4.58 0.63 4.78 0.42 0.141

185
5. Establish a broad national committee to advance. 3.99 0.94 4.62 0.49 0.000*
accounting practices

6.Establish a governmental agency responsible for 3.95 1.17 4.36 0.94 0.000*
advancing accounting practices

7. Increased information disclosure through the 4.04 0.84 4.40 0.83 0.289
financial reports currently in practice.
Source: prepared by the researcher (2017)

Table (5.2) demonstrates the perceptions of the two groups of respondents about the
given proposal for improving the regulatory framework and accounting practices in
Sudan. As illustrated in the table, the highest mean value from the view of practitioners
is (4.58) and the lowest is (3.95). The standard deviation is ranging between (0.63) and
(1.25). From the view of professors, the highest mean value is (4.78) and the lowest is
(4.36). The standard deviation is ranging between (0.42 and 0.94). The two groups have
an identical view about the fourth proposal, as the most important proposal, namely:
Provide effective accounting legislation. This is clear in the highest mean value that is
given to this proposal from the two groups. Also, the two groups have identical view
about the least important one, which is the sixth proposal, namely: Establish a
governmental agency responsible for advancing accounting practices. In spite of this
identical view in the level of agreement about the sixth proposal, the Mann Whitney U
test, shows that there is a significant difference at a 0.05 level about the sixth, fifth and
second proposals, while on the other hand, there is no significant difference at a 0.05
level between both groups, about the other proposals.
Regarding the sixth proposal, while the 62% of the professors “strongly agree” and 38%
“agree” (which indicate full “agreement” 100% about the proposal), there are 29.10% of
the practitioners that “strongly agree” and 52.99 % that “agree” which indicate 82.09%
of practitioners are “generally agree” about this proposal. On the other hand, there are
11.19% of the practitioners “disagree” and 6.72% “Don’t know”, while of course none
of professors “disagree” about the proposal. Therefore, the significant difference about
the sixth proposal is only on the side of the “disagreement” , but on the side of
“agreement” there is a slight difference.
Also, while 92% of the professors present “general agreement” about the fifth proposal,
81.35% of the practitioners’ present “general agreement”. On the other hand, while
17.91% of the practitioners “disagree” about this proposal, only 6% of the professors

186
“disagree” (2% of professor and 0.75% of practitioners “Don’t know”). Regarding the
second proposal, while 90% of the professors’ present “general agreement”, only
79.58% of the practitioners’ present “general agreement”. On the other hand, while
19.2% of the practitioners “disagree” about the proposal, only 10% of professors
“disagree”, (there is 1.41% of practitioners that “Don’t know”).

The Mann Whitney U test illustrated that the significant differences between the two
perspectives are only in the level of the “disagreements”, this indicates that both groups
of respondents are agree about all the given proposals.

Depending on the above, one can rank the proposals for improving the regulatory
framework and accounting practices in Sudan from the highest to the lowest level of
importance, as follow:

i. Provide effective accounting legislation.

ii. Amendment of Companies Act, particularly the articles which deal with
disclosure.
iii. Official auditing authorization.
iv. Increased information disclosure through the financial reports currently in
practice.
v. Issuing of accounting principles suitable to the local environment.
vi. Establish a governmental agency responsible for advancing accounting
practices.
vii. Establish a broad national committee (including accountants and non-
accountants) to advance accounting practices.
Moreover, the Report on the Observance of Standards and Codes (ROSC), which was
conducted by the World Bank about Sudan in (2010), suggests a strategic plan for
making the Sudan Accounting and Auditing Profession Organization Council
(SAAPOC) as a modern regulator of accountancy profession. The following is summary
of this strategic plan:

The law should clearly spell out the mandate and functions of SAAPOC. As an
independent oversight body, SAAPOC should have majority of non-practicing
accountants in its governing body. The government should assure adequate funding for

187
the oversight body. Separate units within the oversight body could be responsible for
the following activities:

a. Setting accounting and auditing standards: The SAAPOC should adopt, without
modification, all IFRS, ISA and the International Federation of Accountants
(IFAC) code of ethics for professional accountants. It should also prescribe
accounting and auditing requirements for Small and Medium Enterprises (SME),
taking into account IFRS for SMEs.
b. Registering auditors in public practice: The SAAPOC should maintain a register
of auditors and audit firms approved for public practice. Policies and procedures
for accreditation of auditors in line with internationally accepted practices
should be developed by SAAPOC.
c. Conducting quality assurance reviews for auditors of public interest entities,
investigating complaints and assessing stakeholders’ and public’ interest: the
quality assurance review should evaluate an audit firm’s system of quality
auditors and audit firms should also be investigated. In the case of material
infractions, the oversight body should recommend appropriate actions to the
enforcement authority for implementation.
d. Monitoring compliance with accounting standards: Monitoring actions should
ensure compliance with the legal requirement to employ qualified professional
accountants in entities meeting certain thresholds. General purpose of financial
statements of public interest entities should be reviewed under the compliance
with accounting standards. Findings on non-compliance should be forwarded to
the enforcement authority along with recommendations on the sanctions for
infractions.
e. Enforcing sanctions for violations: The SAAPOC, as part of its enforcement
activities, should determine appropriate actions against violators of standards
and codes. In addition to resorting to the national legal system, the SAAPOC
should impose administrative sanctions against management of entities, auditors
and audit firms.

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5.2. Proposals to improve the state of the accounting profession and the accounting
education in Sudan

According to ACCA (2012), building an accountancy infrastructure is a complex

process because it is part of an economy’s legal and regulatory system. It needs to be
attuned to the interests of many stakeholders and the availability of financial,
educational and human resources. Sudan like many developing countries, has adopted
accounting education and accounting practices from developed countries. The relevance
of these education programs and accounting practices in developing countries has been
a topic of debate over many years. It is thought that these accounting programs cannot
contribute to the development of effective accounting system.
As it is known, the accounting systems, methods and techniques taught in accounting
should be oriented towards the environment of the country. This is mostly distorted in
the situation of Sudan, where courses are based on the environment of foreign countries.
Generally, accounting education and the accountancy profession are closely related and
cannot be separated from each other. Therefore, accounting education in Sudan must
have a role to prepare persons to become professional accountants. The cooperation and
joint efforts between accounting educators and professional practitioners is necessary to
create reliable, dynamic and forceful professional accounting education in the country.
The state of accounting profession in Sudan is characterized by: Shortage of qualified
accountants at all levels and in all areas of accounting, lack of strong national
associations of accountants and as a result, the accounting profession in Sudan is weak,
undeveloped and lags behind the modern development in the world. Moreover, all the
interviewees’ responses have identical view that the government domination over the
accounting professional bodies is a very harmful factor in the development of
accounting profession and accounting practices in the country as a whole. The empirical
study suggests some proposals for improvement.

A. Comparison of opinions about the proposals to improve the state of the

accounting profession
The empirical study suggests some proposals for improving the state of the accounting
profession. The following table illustrates the opinions of the two groups of respondents
regarding the case.

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 Table (5.3)
Comparison of opinions about the proposals to improve the state of the accounting
profession

Practitioners perspective Professors perspective Mann Whitney

U test
Proposals
Mean S.D Mean S.D

1.Strengthening the power of the Sudanese

4.61 0.56 4.58 0.57 0.415
Accountants Association
2.Reduce government intervention in the
4.61 0.57 4.30 1.07 0.820
accounting practices
3.Organization of the auditing profession 4.58 0.49 4.44 0.70 0.070
4.Formation of active accounting
4.25 0.87 4.64 0.53 0.036*
organizations
5.Cooperation with international
4.58 0.58 4.72 0.45 0.484
organizations (such as IASB)
6.Provide financial support to the
4.54 0.60 4.64 0.56 0.163
accounting profession
7.Establish a licensing authority for setting
standards for admission into accounting 4.46 0.68 4.64 0.48 0.056
practice
Source: prepared by the researcher (2017)

Table (5.3) shows the opinions of the respondents about some suggested proposals to
improve the accounting profession in Sudan. It seems that the respondents strongly
agree about all suggested proposals, which can be noted from the high mean values
which are presented by the two groups to the given proposals. From the perspective of
the practitioners the mean values ranges between (4.61) and (4.25), while the standard
deviation ranges between (0.49) and (0.87). Also from the view of the professors, the
mean values range between (4.72) and (4.30), while the standard deviation ranges
between (0.45) and (1.07). The Mann Whitney U test shows that the perceptions of both
groups are not significantly different at a 0.05 level for all given proposals except the
fourth proposal.

Regarding the fourth proposal, while 8.45% of the practitioners “disagree” about this
proposal, none of the professors “disagree”, while the level of “general agreement”
about the proposal is 98% of professors and 90.84 of practitioners (only one respondent
from each group chose “Don’t know”). These results indicate that there is a strong
consensus between both respondents about all the listed proposals, despite the
significant difference that is presented for the fourth proposal.

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Depending on the above, the proposals to improve the accounting profession in Sudan
can be stated as following:

- Cooperation with international organizations (such as IASB).

- Provide government financial support to the accounting profession.
- Reduce government intervention in the accounting practices.
- Establish a licensing authority by the government for setting standards for
admission into the accounting practice.
- Strengthening the power of the Sudanese Accountants Association.
- Organization of the auditing profession.
- Formation of active accounting organizations.
In this respect, the World Bank (2010) states that there is a need for a new professional
accountancy body, in line with international good practices, that should focus on
various activities concerning development of the profession, including the following:

a. Organize professional qualification examination and related activities in full

compliance with the requirements of International Education Standards issued
by IFAC.
b. Maintain a register of members in accordance with membership criteria.
c. Enhance the competencies, skills and knowledge of its members.
d. Put in place arrangements for monitoring compliance with the continuing
Professional Development (CPD) requirements.
e. Establish a due process through which IFRS and ISA can be implemented
locally.
f. Promulgate, disseminate, and translate (as necessary) applicable standards and
related implementation guidance to the members of the profession and other
stakeholders in order to ensure that implications of these standards are
understood properly.
Also, the empirical study consists of suggested roles that can be adopted by the
academic institutions to improve the state of the accounting profession in the country.
The following table presents comparison opinions about these roles.

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 Table (5.4)
Comparison of opinions about the roles of academic institutions in improving the
accounting profession in Sudan

Practitioners perspective Professors perspective Mann

Roles Whitney
Mean SD Mean SD U test
1.Improve the basic accounting education 4.63 0.53 4.76 0.43 0.963

2. Effective academic training for 4.34 0.95 4.79 0.43 0.233

accounting personnel
3. Effective professional training for 4.16 1.02 4.38 0.81 0.010*
accounting personnel
4. Seminars and training courses to 4.28 0.66 4.74 0.44 0.342
government employees
5. Provide the recommendations and 4.21 0.98 4.66 0.48 0.000*
advice for developing accounting concepts
6.Assess the accounting curriculum at the 4.45 0.57 4.70 0.46 0.066
Secondary level as well as at University
level
7. Provide a research base for local 4.34 0.82 4.52 0.54 0.081
purposes
Source: prepared by the researcher (2017)

Table (5.4) illustrates the perceptions of the respondents from the two groups about the
roles of the academic institutions in improving the accounting profession in Sudan. It
shows that the respondents strongly support all the listed roles. This is clear from the
high mean values that are presented by the two groups regarding the case. From the
view of practitioners the mean values range between (4.63) and (4.16) and the standard
deviation ranges between (0.53) and (1.02). From the view of the professors, the mean
values range between (4.79) and (4.38) and the standard deviation ranges between
(0.43) and (0.81). The Mann Whitney U test shows that there is no significant difference
at a 0.05 level between the both groups about all the given roles, except the third and
fifth roles.

Regarding the third role: Effective professional training for accounting personnel, 92%
of the professors show “general agree” with this role, while there are 82.39% of the
practitioners who “general agree”. On the other hand, while 13.38% of practitioners
“disagree”, only 6% of the professors “disagree” (there are 4.23% of practitioners and
2% of professors that chose “Don’t know”). For the fifth role: Provide the
recommendations and advice for developing accounting concepts, while all the

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professors (100%) show “general agree” with this role (66% strongly agree and 34%
agree), there are 43.66% of practitioners who strongly agree and 45.07% agree, (which
meaning that 96.48% of practitioners “general agree”). On the other hand, 5.63% of
practitioners “disagree”. Therefore, the significant differences between both groups are
only on the levels of agreement (while the difference between the agreement and
disagreement is slight), which indicates that all the respondents from both groups
generally agree about all the listed roles that can be adopted by the academic institutions
to improve the accounting profession in Sudan.

Depending on the above, the roles of the academic institutions in improving the
accounting profession in Sudan are:

- Improve the basic accounting education.

- Effective academic training for accounting personnel.
- Assess the accounting curriculum at the Secondary level, as well as at University
level.
- Seminars and training courses to government employees.
- Provide a research base for local purposes.
- Provide the recommendations and advice for developing accounting concepts.
- Effective professional training for accounting personnel.

B. Proposals to improve the accounting education in Sudan

Generally, the quality of accounting education plays an important role in the
development of accounting profession and accounting practices as a whole. Accounting
education in Sudan doesn’t play its role in improving the accounting profession in the
country due to a lot of reasons. The empirical study mentioned many reasons that are
recognized as reasons harming the accounting education in Sudan, which can be
summarized as follows:

i. The weakness of the accounting curricula which are adopted in the local
faculties and universities.
ii. The absence of the government’s role in guiding accounting education and
control it.
iii. Inadequate computer facilities and other support equipment and resources.

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 iv. Large numbers of students in class may lead to less chance of discussion.
v. Most accounting text books are based on the business environment of
developed countries.
vi. Most professors no longer felt their responsibility to be training students for
employment.
vii. The lack of teaching staff sufficiently qualified to teach advanced subjects to
improve accounting and auditing.
Also the interviewees point out other shortcomings of the accounting education in
Sudan, which can be mentioned as follows:

i. Accounting education prepares students for routine accounting work with no

orientation toward creative and analytical work.
ii. No emphasis upon international accounting and auditing standards in the
universities curriculum.
iii. Inadequate training programs and practical application available for students.
iv. There is a gap between academics and practitioners resulted in the absence
of expert from accounting professionals, in the establishment of accounting
courses and their contents.
From this situation it appears that, there is an urgent need to develop accounting
education in Sudan in order to play its role in improving the accounting profession and
accounting practices as a whole. The questionnaire that was issued to the professors
included some means and policies to develop the current state of accounting education.
Since these proposals are only from the perspective of the professors, there is no data
for comparing the results. The results were illustrated previously in section (4.3).

Depending on those results, one can rank the means which were presented by the
professors to improve the accounting education, from the highest mean value to the
lowest, as follows:

- Updating periodically for accounting courses.

- Increase and training the teaching staff members.
- Provide the education institutions with computer facilities and other support
equipment and resources.

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 - Establishment of accounting education development center sponsored by the
government.
In addition to all these proposals the interviewees (certified accountants and some
academics) stated other proposals for the improvement of the state of accounting in the
Sudan which can be mentioned as follows:

Proposals for improving the regulatory framework and accounting profession:

The government must respond quickly to update the companies Act 1925, the updating
issues should include:

i. Articles regarding the establishment of accounting policies.

ii. Special requirements and regulations relating to the disclosure of
financial statements.
iii. Articles ensuring timely preparation of annual financial statements
reflecting true and fair view of the companies.
iv. Means and legislations for monitoring with sanction to those who do not
comply.
v. Additional requirements regarding the licensing rules for qualification of
practicing auditors.
vi. A clear list for auditors’ fees based on different standards, such as: Work
hours, the capital size of the company, the nature of company activities
and the number of employees.
Proposals for improving the accounting education:

i. The academic textbooks must be updated to follow the emerging

development in accounting and auditing.
ii. The curricula must focus on applicable accounting and auditing standards or
practical implementation not only on the theoretical issues.
iii. There must be direct teaching programs at university level towards
emphasizing the learning of the practical application of international
accounting and auditing standards.
iv. Provide opportunities for professional experts to participate in the
development of curriculum contents.

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 v. Support the academics in Sudan to ensure that they are sufficiently prepared
to incorporate IFRS into the accounting curriculum.
5.3. Determinants of the adoption of IFRS in Sudan

The traditional features of financial information become insufficient in the context of

capital markets’ globalization, which in turn enhances the usefulness of international
financial reporting standards (IFRS). These standards are developed and prepared by an
international accounting standard body, which is strongly influenced by developed
countries. There are many countries have been to improve their accounting using IFRS,
while on the other hand, some countries still did not adopt these standards due to a lot of
obstacles. Sudan is one of those countries which haven’t adopted the IFRS yet. A Study
conducted by Zehri and Chovaibi (2013), who examined the adoption determinants of
the IAS/IFRS by the developing countries, concluded that most favorable developing
countries to the adoption of IFRS are those who have a high economic growth rate, a
high level of education and common law based on a legal system.
To examine the benefits and difficulties of the adoption of IFRS in Sudan, the empirical
study included questions about the benefits of the adoption of IFRS and the difficulties
that prevent the country from adopting these standards. This section aims to illustrate
the opinions of the two groups of respondents regarding the benefits and difficulties of
the adoption of IFRS in the Sudan.
Table (4.39) and figure (14) in section (4.4) show comparison of opinions about the
potential benefits of the adoption of IFRS in Sudan. Depending on the results from that
comparison one can rank the potential benefits as in the following:

i. Transparency and reliability of financial reports of the companies will be

ensured.
ii. Enhance the comparability of financial reports.
iii. Facilitates the growth of foreign direct investment in Sudan.
iv. Reduces the possibility of illegal acts, such as frauds.
In addition to these benefits the interviewees add other benefits, which are:

i. Rehabilitation of the accounting staff.

ii. Facilitate dealing with international organization.

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 iii. Facilitate the work of international companies in Sudan in respect to its
financial reports.
iv. The IFRS enable the Sudanese companies to enter the international financial
market and, of course, enable the development of all accounting practices in
the country.
Despite the consensus between the two groups of respondents, about the potential
benefits of the adoption of IFRS in Sudan, the country still haven’t adopted it because
of some difficulties. Table (4.38) and figure (13), which were represented in section
(4.4), show comparison opinions of the respondents from the two groups about these
difficulties. Depending on the results from that comparison one can rank the
determinant factors that prevent the adoption of IFRS in Sudan as in the following:

i. The high cost of developing the infrastructure and resources to support

professionals working on IFRS.
ii. Weakness of regulatory system.
iii. Most of the businesses are family businesses.
iv. Islamic banks and other financial institutions should follow Islamic
accounting standards despite the convergence.
v. IFRS are based on Anglo- American thought which is not suitable to the
local environment.
vi. The weakness of accounting education.
vii. Training of staff to understand and implement IFRS.
viii. The weakness of accountants’ skills.
The explanations obtained from the interviews with certified accountants reveals that
there is a consensus between them that it is not possible to adopt the IFRS currently in
Sudan, due to many reasons. The most frequent reasons are:

i. The strong government domination over the accounting profession.

ii. The lack of legal obligation.
iii. Political reasons.
iv. These standards have been developed for the environment of the developing
countries. Therefore, it is not easy to be adopted by the developing countries,
due to many difficulties related to the different environments.

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5.4. Scopes of adoption of IFRS in area of improving financial reporting in Sudan

According to World Bank (2010) the accounting and auditing practices in Sudan need to
be developed in line with a growing economy, as well as with international good
practice. With the exception of banks and insurance companies, which are required to
follow Islamic accounting standards, there is no legal mandate for other corporate
entities to follow IFRS or any kind of standards in preparation of financial statements.
There is no legal requirement in Sudan to follow International Standard of Auditing
(ISA) or any other auditing guidelines in conducting audits. When benchmarked against
international standards, these gaps likely stem from: Lack of understanding of the
applicable requirements by the corporate accountants and auditors, Inadequate technical
capacities among the regulators, Lack of independent regulation of the auditing
profession and shortcomings in professional training. Contributing to these challenges,
the accounting education and training in Sudan does not meet the international
education standards.
Most interviewees shared the opinion that the banking sector and insurance companies
in Sudan are the most organized sectors. Therefore, they believed that it might be more
suitable if the adoption of IFRS start with those two sectors, because the central bank of
Sudan and Insurance Supervisory Authority (ISA) required banks and insurance
companies, to prepare their financial statements in conformity with uniform standards
which are issued by the Accounting and Auditing Organization for Islamic Financial
Institutions (AAOIFI) standards. The researcher opinion: this is not enough to ensure
good adoption of IFRS in Sudan, because there are many differences between the
AAOIFI standards and IFRS standards.
The objective of the IFRS focuses on reporting the economic substance of the
transactions undertaken. On the other hand, the AAOIFI standards aim is that
accounting in the Islamic Financial Institutions (IFI), should demonstrate its compliance
with Shariah (Islamic law). Since there are main differences even in the objectives, it
should not be a surprise if IFRS and AAOIFI standards give rise to different reporting
when applied to the same transaction. According to Ibrahim (2007), AAOIFI develops
alternative Islamic standards when the equivalent IFRS cannot be adopted in whole by
the (IFI), (Ijarah standard vs IAS 17 Leases), when the IASB has no IFRS to cover
specific Islamic banking and finance practices, (Mudaraba, Musharaka, Salam and

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Murabaha “Islamic models of finance”), and when certain IFRS can be adopted, (then
either AAOIFI does not develop a standard or it develops and adopts IFRS).

The World Bank (2010), reports the fundamental differences that exist between IFRS
and AAOIFI standards, as follows:

i. Islamic leasing contracts do not recognize finance lease. The leased assets
are recognized in the bank’s books and not capitalized in the customers’
books. This may contradict with IAS 17 (Leases).
ii. Certain Islamic contracts and requirements require inventory to be valued at
cash equivalent values, not lower of historical cost or net realizable value.
Therefore, the IAS 2 (Inventories) cannot be followed in these
circumstances.
iii. Islamic insurance companies cannot follow IFRS 4 (Insurance contracts),
according to the Islamic principle: premium contributions by policyholders
belong to them, not to the insurance companies. Therefore, it is an off-
balance sheet item for the insurance companies.
iv. There are no equivalent AAOIFI standards on important areas, such as:
Business combination (IFRS 3), Cash flow statements (IAS 7), Property,
plant and equipment (IAS 16), Employee benefits (IAS 19) Related party
disclosures (IAS 24), Interim financial reporting (IAS 34) and Impairment of
assets (IAS 36).
Moreover, in Sudan neither the SAAPOC nor other organizations issue guidance for the
implementation of IFRS and ISA. This has contributed in some cases to knowledge gap
among the preparers and auditors of financial statements. Consequently, it raises a
possibility of applying the standards inconsistently and resulting in compliance gaps
between IFRS and ISA requirements and actual practice. Lacking access to modern
audit practice manuals, many audit practitioners are unable to deal with important
concepts, such as audit risk, audit planning, internal control, materiality, documentation,
going concern and quality control. With SAAPOC implemented guidance, the auditors
can audit with applicable rules and standards. This guidance should incorporate cases
and illustrations relevant to Sudan and be focused on industry specific experiences. The
central bank of Sudan organizes training programs on AAOIFI standards that are

199
primarily focusing on practical application of these standards in banks and similar
financial institutions.
It is clear from all the proposals, which were recommended in the previous sections,
that there is a widespread view that the financial reporting and accounting practices in
Sudan are far from optimal situation. For example, regarding the low level of skills
among accounting profession, one of the interviewees’ responders said “most of the
Sudanese nationals who become professionally qualified accountants migrated abroad,
for better remunerations, mostly to Gulf countries”. Other reason that contributes to this
state of the accounting profession in Sudan is that the Sudanese universities do not
make any effort or attention to harmonize accounting curricula with the modern
accounting concepts in order to include IFRS. Moreover, although the companies Act
1925 is old law and enact less legislation regarding the preparation of accounting
statements, the noncompliance with it is the prevailing situation. Generally, the state of
financial reporting and accounting practices in Sudan contribute to the difficulty in
adopting the IFRS currently in the country. Therefore, to improve the state of
accounting in Sudan, there is an urgent need to effectively enforce mechanisms for
ensuring compliance with updated companies’ law and radical changes in the curricula
of accounting in the Sudanese universities and institutions, these curricula should be
directed toward the modern issues and concepts of accounting, in order to enable these
universities to play its role in preparing accountants who can applicate the international
accounting standards These are an essential steps toward the adoption of IFRS in
Sudan.

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 CONCLUSION

In the view of this research of the current state and perspectives on financial reporting in
Arab countries - Sudan as a case study, the following conclusions can now be made:

Conclusions points of the literature review

The investigation of the accounting literature covered three major areas: accounting
system in Arab countries, basic characteristics of financial reporting in Sudan and
comparative outlook of the accounting practices in Arab countries. The first part review:
Accounting system in developing countries, Specificity of accounting system in Arab
countries, Impact of the international harmonization of accounting and the Reasons and
obstacles of harmonization. The second part covered: The impact of historical and
environmental factors on the financial reporting in Sudan, The legal regulatory
framework of accounting practices in Sudan, Accounting education and profession in
Sudan and The weaknesses in the current financial reporting system in Sudan. The third
part consist of: Accounting practices in Egypt, Accounting practices in Saudi Arabia,
Accounting practices in Libya and Comparative analysis of the selected countries. From
literatures review the following conclusions can be drawn:

1. Arab countries are socially and culturally similar. Therefore, they represent one
social environment because their social environment is a combination of a
society's beliefs, practices, customs and behaviors. The social and cultural
environment of the Arab countries affects international business operating and
financial reporting in any of the twenty-two countries.
2. The companies in Arab countries use different accounting rules and regulations
for measurement, recognition and disclosures of financial position and results of
operation. Consequently, comparability of the financial results of different
companies in different Arab countries is impossible. This will have negative
impact on foreign investments, foreign listing and security markets. To resolve
the issue of comparability and provide more reliable, accurate and valid financial
accounting information, Arab countries collectively should adopt the
international accounting standard IFRS.

201
 3. The effectiveness of the accounting system in these countries has been far from
satisfactory performance and the integration between the accounting and
economic development is lacking. To solve these problems, Arab countries must
give more attention to the importance of their accounting systems, in relation to
the local needs first and the international modern needs of accounting in general.
4. Some of Arab countries have felt the need for developing their accounting, while
other did not yet. Therefore, the level of development which has been made
towards enhancing accounting in these countries is different from country to
country. Some of them adopt or have planned to adopt IFRS, while other don’t
adopt and have no plan to adopt IFRS.
5. The accounting practitioners in Arab countries tend to be weak and unable to
fulfill their expected professional duties. The nonexistence of strong accounting
organizations and the government domination over the accounting bodies have
negatively affected the state of the accounting profession in these countries.
6. In most Arab countries the accounting education system, either was imported
from colonial powers, or deeply affected by the strong impact of Egypt
accounting system, which already had been shaped by the accounting systems of
former colonial powers. These educational systems are unsuitable to serve the
needs of Arab countries.

Conclusions points of the empirical study

As indicated earlier, two questionnaires and unstructured interviews were used to collect
the necessary data to achieve the objectives of this research. The descriptions of these
questionnaires and results of analysis are summarized below:

i. The questionnaire of the practitioners (accountants in industrial

companies in Sudan).
ii. The questionnaire of academics (professors who teach accounting and
auditing in the Sudanese universities and institutions).
iii. Unstructured interview with certified accountants and some responsible
individuals in the regulatory bodies and academics.

202
 The two questionnaires were designed to achieve the following aims:
- Demonstrate the environmental factors affecting the accounting practices in
Sudan, from the two perspectives.
- Canvass opinions regarding the state of financial reporting, accounting
practices and suitability of accounting information to the local users in
Sudan.
- Evaluate the state of accounting profession and accounting education in
Sudan and suggest proposals for improvement.
- Determine the challenges facing the accounting practices in Sudan, as it seen
by the two groups of responders.
- Illustrate the benefits of adoption of IFRS in Sudan and the difficulties
facing the adoption of IFRS in the country from the two perspectives.
- Report the essential elements and the role of academics institutions in the
improving of accounting practices in Sudan.
Moreover, the questionnaire which issued to the practitioners aimed separately to collect
information about the current accounting practices in the Sudanese industrial
companies. Also, the questionnaire that issued to the professors aimed separately to
collect information about the accounting education in the country and suggest proposals
for improvement. The interviews aimed to illustrate other perspectives and cover the
missing issues in the questionnaires.

Based on the responses of the two samples groups, the following conclusions seem to be
appropriate:

1. The environmental factors affecting the accounting practices in Sudan are:

Accounting education, Culture value, Legal system, Type of economic system,
Nature of business ownership and Political system.
2. The existing accounting and auditing procedures in Sudan have been derived
from the practices of UK. Therefore, it needs to be modified in order to be more
suitable and acceptable to the local environment. Despite there was general
agreement between the practitioners and professors about the modification of the
current accounting and auditing procedures in Sudan, there was difference in the

203
 level of agreement about the case (72% of the professors, 53.52% of the
practitioners).
3. The traditional accounting system, which has so far been applied in Sudan, has
failed to meet the requirements of the local users. This system is based on the
UK accounting system. The commonly accepted accounting requirements are in
a form of laws which depend mainly on the companies’ law 1925 that has not
been amended since the independence of the country. It is an outdated law and
incapable of meeting the demands of the changing business environment.
Therefore, accounting system in Sudan is very weak to provide suitable
information to the local users, due a lot of reasons such as: The absence of
government legislation to organize the accounting disclosure system, The
weakness of regulatory system, Accounting system was created in the model of
advanced accounting practices of former colonial (UK), The weakness and
inadequacy of accounting education, Government domination over the
accounting professional bodies.
4. The state of accounting profession in Sudan characterized by: Shortage of
qualified accountants at all levels and in all areas of accounting and Lack of
strong national associations of accountants, so as a result, the accounting
profession in Sudan is weak, undeveloped and lags behind the modern
development in the world. Moreover, the government domination over the
accounting professional bodies is a very harmful factor in the development of
accounting profession and accounting practices in the country as a whole. To
improve this situation of accounting profession, many proposals were suggested.
These proposals are: Reducing government intervention in the accounting
practices, Strengthening the power of the Sudanese Accountants Association,
Establishing a licensing authority for setting standards for admission into
accounting practice, Providing financial support to the accounting profession
and Cooperation with international organizations such as IASB. The academic
institutions can contribute in the improvement of the accounting profession by
providing: Effective academic training for accounting personnel, Seminars and
training courses to government employees, Effective professional training for
accounting personnel, Recommendations and advice for developing accounting

204
 concepts and assess the accounting curriculum at the Secondary level as well as
at University level.
5. Accounting education in Sudan doesn’t play its role in improving the accounting
profession in the country and cannot contribute to the development of effective
accounting system, due to a lot of reasons such as: The weakness of the
accounting curricula which are adopted in local faculties and universities, The
absence of the government’s role in guiding accounting education and control it,
The lack of teaching staff sufficiently qualified to teach advanced subjects to
improve accounting and auditing, Accounting education prepares students for
routine accounting work with no orientation toward creative and analytical
work, No emphasis upon international accounting and auditing standards in the
universities curriculum.
6. Many proposals were suggested to improve the accounting education in Sudan,
such as: The curricula must focus on applicable accounting and auditing
standards or practical implementation more than only on theoretical issues,
There must be direct teaching programs at university level towards emphasizing
the learning of the practical application of international accounting and auditing
standards, Support the academics in Sudan to ensure that they are sufficiently
prepared to incorporate IFRS into the accounting curriculum and Provide
opportunities for professional experts to participate in the development of
curriculum contents.
7. A lot of challenges facing the accounting practices in Sudan. Some of these
challenges related to the weakness of the regulatory framework of accounting in
Sudan, other related to the state of the accounting profession, while third related
to the state of the accounting education.
8. In spite of a lot of benefits that can be obtain by the adoption of IFRS in Sudan
the country still does not adopt it because of many difficulties. These can be
summarized in: The high cost of developing the infrastructure and resources to
support professionals working on IFRS, Weakness of regulatory system, Most of
the businesses are family businesses, Islamic banks and other financial
institutions should follow Islamic accounting standards despite the convergence,
IFRS are based on Anglo- American thought which is not suitable to the local

205
 environment, The weakness of accounting education, Training of staff to
understand and implement IFRS and the Weakness of accountants’ skills.
9. Due to the simplicity of the laws and regulations and the weak observation in
Sudan, the majority of accounting issues were not been considered or
standardized. As a result the companies and accountants have been left free to
practice their own accounting rules and standards. Accordingly, there is no
specified accounting system, accounting rules, standards or policies.
Correspondingly, the diversity, inconsistency and delay in issuing of financial
reports are the main features of accounting practices in the Sudanese’ industrial
companies. This situation made the possibility of comparison is very difficult, if
not, impossible.
10. The government must respond quickly to update the companies Act 1925, the
updating issues should include: Articles regarding the establishment of
accounting policies, Special requirements and regulations relating to the
disclosure of financial statements, Articles ensuring timely preparation of annual
financial statements reflecting true and fair view of the companies, Means and
legislations for monitoring with sanction to those who do not comply,
Additional requirements regarding the licensing rules for qualification of
practicing auditors, A clear list for auditors’ fees based on different standards(
such as: work hours, the capital size of the company) and The nature of
company activities and the number of employees.

Area of future research

The results from this research suggest the need for future researches. The following are
possible areas for researches in future:

1. Study on the possibility of adopting uniform accounting system in Sudanese

companies.
2. More investigation to the difficulties preventing the adoption of IFRS in Sudan.
3. The reasons behind the gap between IFRS and AAOIFI.
4. The challenges of the accounting education in Sudan.

206
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APPENDIXES

214
 Appendix1
Questionnaire– Model. A
Guidance for completing the questionnaire
1. This questionnaire will be distributed to the industrial companies in the Sudan. As a chief
accountant or financial manager or a chief auditor in the company, your opinion is needed
as a preliminary step toward assessing financial reporting and accounting practices in the
Sudan.
2. Some questions may be answered by circling the suitable answer. Certain questions ask for
more information which thought you will have easily available.
3. Open- ended questions are included to allow you to express your personal opinion in more
detail.
4. Some questions are designed to be answered on the scales as follows:-
Strongly agree Agree Don’t know disagree Strongly disagree
In answering these questions, please tick the box which most closely represents
your answer.
5. It will greatly assist my work, if you could attach a copy of your company's latest
published accounts when retuning the completed questionnaire.
6. There is no right or wrong answer, so please try to express your opinion about all
questions.
Thank you very much for your assistance and kind cooperation.
Table of contents
Part I:- Personal Information
Part II:- Information about accounting practices in the company
(A) Information about the accounting system and financial reports of the company
you work for.
(B) Information about methods and rules of preparation of financial reports of the
Company you work for.
Part III:- Accounting information about the country as a whole
(A) The state of financial reporting practices.
(B) Accounting challenges and proposed recommendations
Part I:- Personal Information
Please circle the response that most closely corresponds to your evaluation of the item in the
question.
1) The highest level of formal education you have completed (please choose one only
and write your specialty)
a. Secondary school
b. Technical Diploma specializing in ……………………
c. Bachelor degree specializing in …………………………
d. Master degree specializing in ……………………………..
e. Doctoral degree specializing in …………………………..
f. Other (Please specify) ……………………………………

215
2) The country from which your most recent degree was obtained
a. The Sudan
b. Another Arab country
c. U.K. or the USA
d. Other (Please specify) ………………………
3) Years of experience in accounting and auditing
a. Less than 5
b. From 5 to 10
c. More than 10

Part II: Information about accounting practices in the company

(A) Information about accounting system and financial reports in the company you
work for
1. Type of the company
a. Public shareholding company
b. Private shareholding company
c. Governmental company
d. Family company
e. Other (please specify) ………………………………
2. Type of financial statements (choose one or more)
a. Income statement (profit and loss account)
b. Statement of retained earning
c. Financial position statement(balance sheet)
d. Cash flow statement
e. All of these statement
f. Other (please specify) ……………………
3. Please rank the following users of financial reports according to their importance.
(Please use numbers 1, 2, 3, 4 in your ranking, 1 for the very important user).
Users of financial reports Ranking
Tax authorities ………………….
Company's management …………………
Shareholders and other potential investors ………………..
Banks and other fund provider ………………..
4. Have there been any major changes in the accounting system during the last five
years?
a. Yes b. No
5. If your answer in the above question number 4 (No), please go to question 6. If
(Yes), what kind of change occurred and
why? ……………………………………………
…………………………………………………………………
6. Does the company you work for employ a special accounting system that is different
from what is commonly used in The Sudan?
a. Yes b. No

216
 7. If your answer to the above question number 6 (No), please go to question 8. If
(Yes); please give some details of the employed accounting
policies. .....................................................................................................................
………………………………………………………………………………………..
(B) Information about methods and rules of preparation of financial reports of the
company you work for.
8. The Base of inventory evaluation
a. Market price
b. Cost price
c. Lower of cost or market value
9. Inventory cost method
a. F.I.F.O.
b. L.I.F.O.
c. Simple average
d. Weighted average
e. Other (Please specify) ……………………
10. Depreciation of fixed assets method
a. Straight line method
b. Decreasing balance
c. Percentage of use
d. Other (Please specify) ………………….
11. Base for valuation of short- term investments
a. At cost price
b. At market price
c. At lower of cost or market price
d. Other (Please specify) ………………
12. Method of classification of fixed assets and accumulated depreciation
a. Fixed assets - accumulated depreciation
b. Fixed assets at book value
c. Fixed assets on assets side and accumulated depreciation on liabilities side
d. Other (Please specify) ……………….
13. Types of external audit you use
a. Financial and compliance (Statutory Audit)
b. Value for money audit (Performance Audit)
c. Other (Please specify) ………………………..
14. Is there a section or department specializing in internal audit?
a. Yes b. No
15. If your answer in the above question (14), No please go to question 16. If Yes; the
Type of internal audit you use is.
a- Financial and compliance (Statutory Audit)
b- Value for money audit (Performance Audit)
c- Other (Please specify) …………………………..
16. Which kind of budget do you use?
a. Short- term
b. Long- term
c. Other (Please specify) ………………….

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 17. Do you use any statistical studies in preparing the budget?
a. Yes b. No
18. Do you use Standard cost?
a. Yes b. No
Part III:- Information about the accounting system and practices in the country as a whole
A. The state of financial reporting practice
1. Do you think that there is Generally Accepted Accounting Principles (GAAP) in
the Sudan?
a. Yes b. No
2. Do you think there is a need for such accounting principles (GAAP) in the Sudan?
a. Yes b. No
3. If your answer to the above question (2) No, please go to question 4. If Yes, in
your opinion which organization should take the responsibility for setting
General Accepted Accounting Principles (GAAP) in the Sudan?
a. The Sudan Council for Certified Accountants (SCCA))
b. Government
c. Universities
d. Other (Please specify) …………………
4. Based on your own knowledge, how effective do you think auditors are in
attesting the fairness of the company's financial statements?
a. Auditors do an excellent job
b. Auditors do a good job
c. Auditors do a fair job
d. Auditors do a poor job
5. With respect to the suitability of the existing accounting principles and auditing
procedures, please indicate to what extent you agree or disagree with the
following statements
Statements Strongly Agree Don't know disagree Strongly
agree disagree
1. The existing accounting principles
and auditing procedures, although
derived from the practices of the U.K
are suitable to the local environment.
2. The existing accounting principles
and auditing procedures need to be
modified to make them suitable and
acceptable to the local environment.
6. With respect to the environmental factors influencing financial reporting practices and
development in the Sudan, please indicate to what extent you agree or disagree with the
following factors:-
Factors Strongly Agree Don't know Disagree Strongly
agree disagree
1.Type of economic system
2. Culture value
3. Political system

218
 4. Legal system
5. Colonial inheritance
6.Accounting education
7.Nature of business ownership
Other, please specify ………………………………….................................................
7. Do you consider that accounting system in the Sudan provides appropriate
information for specific local users?
a. Yes b. No
8. If your answer to the above question number (7), Yes, please go to question 9. If
No, please indicate to what extent you agree or disagree with the following
potential reasons for the an inappropriate accounting information for local
users which providing by accounting system in the Sudan:-
Reasons Strongly Agree Don't know disagree Strongly
agree disagree
1.Accounting system was created in
the model of advanced accounting
practices of former colonial (UK)
2.The weakness and inadequacy of
accounting education
3.Government domination over the
accounting professional bodies
4.The weakness of regulatory system

5.The absence of government

legislation to organize the accounting
disclosure system
Other, please specify …………………………………………………………........................
………………………………………………………………………………………………..
9. In order to ensure the availability of financial reports information required to
meet the users' needs, to what extent you agree or disagree with the following
suggestions for improving financial reports in the Sudan
Suggestions Strongly Agree Don't know disagree Strongly
agree disagree
1.Disclosure of financial information
on a regular basis.
2. Increased information disclosure
through the financial reports currently
in practice.
3. Amendment of Companies Act,
particularly the articles which deal
with disclosure.
4. Organization of the auditing
profession

219
 5. Strengthening the power of the
Sudanese Accountants Association.
6.Reduced the government
intervention in accounting practices
Other, please specify ………………………………………………………………………………….
…………………………………………………………………………………………………………

B. Accounting challenges and proposed recommendations

10. To what extent you agree or disagree to the following accounting practice
challenges in the Sudan
Challenges Strongly Agree Don't know disagree Strongly
agree disagree
1. Shortage of qualified accountants at all
levels and in all areas of accounting
2.Lack of adequate financial reports

3. Lack of adequate auditing standards

4.Lack of strong national associations of

accountants
5.Lack of adequate accounting in
government- owned businesses
6.Accounting practices are viewed and
utilized primarily as a means for helping
companies evade taxes

7. Lack in financial disclosure

requirements
8. The weakness of the accounting
curricula which are adopted in local
faculties and universities.
9.The lack of teaching staff sufficiently
qualified to teach advanced subjects to
improve accounting and auditing
.Other, please specify ……………………………………………………………………………..
……………………………………………………………………………………………………

11. Do you think it is possible to adopt the International Financial Reporting

Standards (IFRS) currently in the Sudan?
a. Yes b. No

220
 12. If your answer in the above question number (11) Yes, please go to question 13. If
No. please indicates to what extent you agree or disagree with the following difficulties
that limit the adoption of IFRS in the Sudan:
Difficulties Strongly Agree Don't know disagree Strongly
agree disagree
1.Weakness of regulatory system
2.Weakness of accounting education

3. Weakness of accountants' skills

4.Most of the business are family business

5. IFRS are based on Anglo- American

thought which is not suitable to the local
environment
6. Islamic banks and others financial
institutions should follow Islamic
accounting standards despite the
convergence
7. Training of staff to understand and
implement IFRS.
8. The high cost of developing the
infrastructure and resources to support
professionals working on IFRS.
Other please specify ………………………………………………………………………………….
…………………………………………………………………………………………………………

13. Please indicate to what extent you agree or disagree with each of the following
benefits that may be obtained from the adoption of IFRS in the Sudan
Benefits Strongly Agree Don't know disagree Strongly
agree disagree
1. facilitates the growth of foreign direct
investment to the Sudan
2. reduces the possibility of illegal acts,
such as frauds
3. enhance the comparability of financial
reports
4. Transparency and reliability of financial
reports of the companies will be ensured.
Other, please specify ………………………………………………………………………………….
…………………………………………………………………………………………………………….

221
 14. From your experience, do you think that academic institutions can play an
important role in improving the accounting profession in terms of providing:

Terms Strongly Agree Don't know disagree Strongly

agree disagree
1.Improve the basic accounting
education
2. Effective academic training for
accounting personnel.
3. Effective professional training for
accounting personnel.
4. Seminars and training courses to
government employees.
5. Provide the recommendations and
advice for developing accounting
concepts.
6. assess of accounting curriculum, in the
Secondary school level, as well as in
University level
7. Provide a research base for local
purposes.

Other, please specify ……………………………………………………………………………………

………………………………………………………………………………………………………….
15. Please indicate to what extent you agree or disagree that the Accounting
Profession in the Sudan currently active in terms of:
Terms Strongly Agree Don't know Disagree Strongly
agree disagree
1. Studying and providing solutions to the
problems facing accounting firms
2. Developing a code of ethics

3. Developing accounting principles that

are suitable to Sudan
4. Developing effective auditing
procedures

5. Conducting effective research

programs in accounting
Other, please specify ……………………………………………………………………………

222
 16. Please indicate to what extent you agree or disagree that the establishment of
each of the following items is essential to the improvement of accounting
practices in the Sudan:
Items Strongly Agree Don't know Disagree Strongly
agree disagree
1. Active accounting organizations
2. Accounting principles suitable to the
local environment
3. Official auditing authorization
4. Greater support from the government
5.Effective educational programs
6.Cooperation with international
organizations (such as IASB)
7.Postgraduate training for accountants
Other, please specify ……………………………………………………………………………………
……………………………………………………………………………………………………………
17. Do you agree that the government must play a role to improve the state of
accounting in Sudan?
a. Yes b. No
18. If your answer in the above question number 17, Yes, please indicate the
extent to which you agree or disagree with each of the under listed methods
as a means by which the government could improve accounting in the
Sudan:
Methods Strongly Agree Don't know Disagree Strongly
agree disagree
1. Provide financial support to the accounting
profession
2.Provide effective accounting legislation

3. Establish a licensing authority for setting

standards for admission into accounting
practice.
4. Establish a broad national committee
(including accountants and non-accountants) to
advance accounting education.
5.Establish a broad national committee
(including accountants and non-accountants)
to advance accounting practices
6. Establish a governmental agency responsible
for advancing accounting practices.
Other, please specify ……………………………………………………………………………………
…………………………………………………………………………………………………………….

223
 Appendix 2
Questionnaire – Model. B

Guidance for completing the questionnaire

7. This questionnaire will be distributed to the academic in the Sudanese
institutions and universities. Your opinion is needed as a preliminary step
toward assessing financial reporting and accounting practices in the Sudan.
8. Some questions may be answered by circling the suitable answer. Certain
questions ask for more information which thought you will have easily
available.
9. Open- ended questions are included to allow you to express your personal
opinion in more detail.
10. Some questions are designed to be answered on the scales as follows:
Strongly agree Agree Don’t know Disagree Strongly Disagree

In answering these questions, please tick the box which most closely represents your
answer.
11. There is no right or wrong answer, so please try to express your opinion about
all questions.
Thank you very much for your assistance and kind cooperation.

Table of contents
Part I: Personal information.
Part II: information about accounting education in the country.
Part III: Information about accounting system in the country.

224
 Part I: Personal information
Please circle the response that most closely corresponds to your evaluation of the
item in the question.
1. The highest level of formal education you have completed (please choose one only
and write your specialty)
a. Master degree specializing in …………………………..
b. Doctoral degree specializing in …………………………
c. Post- doctoral studies specializing in ……………………
d. Other (Please specify) ……………………………………
2. The country from which your most recent degree was obtained
a. The Sudan
b. Another Arab country
c .U.K. or the USA
d. Other (please specify) ……………………………………..
3. The current scientific category in the academic job is
a. Lecturer
b. Assistant professor
c. Associate professor
d. Full professor
4. The years of your experience in teaching accounting and auditing
a. Less than 5
b. From 5 to 10
c. More than 10

Part II: information about accounting education in the country

from your experience, please, do you believe that the capabilities of the accounting
graduates from Sudanese universities are adequately prepared to meet the demand of the
professionals
a. Yes b. No
13. If your answer in the above question number 1, Yes, please go to question 3. If
No , please indicate to what extent you agree or disagree , with the following
reasons which may be caused that problem:-

Reasons Strongly Agree Don't know Disagree Strongly

Agree Disagree
1.The weakness of the courses content
and curriculum.
2.The absence of the government‘s role
in guiding accounting education and
control it.
3. Inadequate computer facilities and
others support equipment and
resources
4. Large numbers of students in class
may lead to less chance of discussion

225
5.Most accounting text books are based
on the business environment of
developed countries.
6.Most professors no longer felt their
responsibility to be training students
for employment.
Other, please specify ………………………………………………………………………
…………………………………………………………………………………………………….

14. Please indicate to what extent you agree or disagree with the following means
and policies to develop accounting education in Sudan.
Means and policies Strongly agree Don't know disagree Strongly
agree disagree
1. Updating periodically for
accounting courses
2. Establishment of accounting
education development center
sponsored by the government
3. Provide the education institutions
with computer facilities and other
support equipment and resources
5. Increase and training the teaching
staff member
Other, please specify. ………………………………………………………………………..
………………………………………………………………………………………………

Part III: information about accounting system in country

A. The state of financial reporting practice

1. Do you think that there is Generally Accepted Accounting Principles (GAAP) in

the Sudan?
b. Yes b. No

2. Do you think there is a need for such accounting principles (GAAP) in the
Sudan?
b. Yes b. No

3. If your answer to the above question number 2, No, please go to question 4. If

Yes, in your opinion which organization should take the responsibility for
setting General Accepted Accounting Principles (GAAP) in the Sudan?
a. The Sudan Council for Certified Accountants (SCCA))
b. Government
c. Universities
d. Other, please specify…………………

226
 4. Based on your own knowledge, how effective do you think auditors are in
attesting the fairness of the company's financial statements?

a. Auditors do an excellent job

b. Auditors do a good job
c. Auditors do a fair job
d. Auditors do a poor job

5. With respect to the suitability of the existing accounting principles and auditing
procedures, please indicate to what extent you agree or disagree with the
following statements
Statements Strongly Agree Don't know Disagree Strongly
Agree Disagree
1. The existing accounting principles and
auditing procedures, although derived
from the practices of the U.K are suitable
to the local environment.
2.The existing accounting principles and
auditing procedures need to be modified
to make them suitable and acceptable to
the local environment.

6. With respect to the environmental factors influencing financial reporting

practices and development in the Sudan, please indicate to what extent you agree
or disagree with the following factors:
Factors Strongly Agree Don't know Disagree Strongly
Agree Disagree
1.Type of economic system
2. Culture value
3. Political system
4. Legal system
5. Colonial inheritance
6. Accounting education
7. Nature of business ownership
Other, please specify ………………………………….................................................

7. Do you consider that accounting system in the Sudan provides appropriate

information for specific local users?
b. Yes b. No

227
 8. If your answer to the above question number 7, Yes, please go to question 9. If
No, please indicate to what extent you agree or disagree with the following
potential reasons for the an inappropriate accounting information for local
users which providing by accounting system in the Sudan:
Reasons Strongly Agree Don't know Disagree Strongly
Agree Disagree
1.Accounting system was created in
the model of advanced accounting
practices of former colonial (UK)
2. the weakness and inadequacy of
accounting education
3. government domination over the
accounting professional bodies
4.The weakness of regulatory system

5. The absent of government

legislation to organize the disclosure
system
Others, please specify …………………………………………………………........................
………………………………………………………………………………………………..
9. In order to ensure the availability of financial reporting information required to
meet the users' needs, to what extent you agree or disagree with the following
suggestions for improving financial reports in the Sudan
Suggestions Strongly Agree Don't know Disagree Strongly
Agree Disagree
1. Disclosure of financial information
on a regular basis.
2. Increased information disclosure
through the financial reports currently
in practice.
3. Amendment of Companies Act,
particularly the articles which deal
with disclosure.
4.Organization of the auditing
profession
5. Strengthening the power of the
Sudanese Accountants Association.
6. Reduced the government
intervention in accounting practices
Other, please specify ………………………………………………………………………………….
…………………………………………………………………………………………………………

228
 B. Accounting challenges and proposed recommendations

10. To what extent you agree or disagree to the following accounting practice
challenges in the Sudan
Challenges Strongly Agree Don't know Disagree Strongly
Agree Disagree
1.Shortage of qualified accountants at all
levels and in all areas of accounting
2.Lack of adequate financial reports

3.Lack of auditing standards

4.Lack of strong national associations of

accountants
5.Lack of adequate accounting in
government- owned businesses
6.Accounting practices are viewed and
utilized primarily as a means for helping
companies to evade taxes.
7.Lack in financial disclosure
requirements
8. The weakness of the accounting
curriculum adopted in local universities
9. The lack of teaching staff sufficiently
qualified to teach advanced subjects to
improve accounting and auditing.
Other, please specify ……………………………………………………………………………
………………………………………………………………………………………………….

11. Do you think it is possible to adopt the International Financial Reporting

Standards (IFRS) currently in the Sudan?
b. Yes b. No

12. If your answer in the above question number 11, Yes, please go to question 13.
If No. please indicate to what extent you agree or disagree with the following
difficulties that limit the adoption of IFRS in the Sudan:
Difficulties Strongly Agree Don't know Disagree Strongly
Agree Disagree
1. Weakness of regulatory system
2.Weakness of accounting education

3.Weakness of accountants' skills

229
4. Most of the business are family
business
5.IFRS are based on Anglo- American
thought which is not suitable to the local
environment
6.Islamic banks and others financial
institutions should follow Islamic
accounting standards despite the
convergence
7.Training of staff to understand and
implement IFRS
8.The high cost of developing the
infrastructure and resources to support
professionals working on IFRS
Other, please specify ………………………………………………………………………………….
…………………………………………………………………………………………………………

13. Please indicate to what extent you agree or disagree with each of the following
benefits that may be obtained from the adoption of IFRS in the Sudan
Benefits Strongly Agree Don't know Disagree Strongly
Agree Disagree
1.Facilitates the growth of foreign direct
investment to the Sudan
2.reduces the possibility of illegal acts,
such as frauds
3.Enhance the comparability of financial
reporting
4. Transparency and reliability of
financial reporting of the companies will
be ensured.
Other, please specify ………………………………………………………………………………….
…………………………………………………………………………………………………………….

14. From your experience, to what extent you agree or disagree that the academic
institutions can play an important role in improving the accounting profession in
terms of providing:-
Terms Strongly Agree Don't know Disagree Strongly
Agree Disagree
1. Improve the basic accounting education

2. Effective academic training for

accounting personnel.

230
3. Effective professional
training for
accounting personnel.
4. Seminars and training courses to
government employees.
5. Recommendations and advice for
developing accounting concepts.
6.Assess of accounting curriculum, in the
Secondary school level, as well as in
University level
7. Research base for local purposes.
Other, please specify ………………………………………………………………………………
………………………………………………………………………………………………………….
15. Please indicate to what extent you agree or disagree that the accounting
profession in Sudan is currently actives in terms of:

Terms Strongly Agree Don't know Disagree Strongly

Agree Disagree
1.Studying and providing solutions to the
problems facing accounting firms
2.Developing a code of ethics
3.Developing accounting principles that
are suitable to Sudan
4.Developing effective auditing procedures
5.Conducting effective research programs
in accounting
Other, please specify ………………………………………………………………………………
…………………………………………………………………………………………………….

16. Please indicate to what extent you agree or disagree that the establishment of
each of the following items is essential to the improvement of accounting
practices in the Sudan:
Terms Strongly agree Don't know disagree Strongly
agree disagree
1. Active accounting organization
2. Accounting principles suitable to the
local environment
3.Official auditing authorization
4.Greater support from the government
5.Effective educational programs

231
6.Cooperation with international
organizations (such as IASB)
7.Postgraduate training for accountants

Other, please specify, …………………………………………………………………………….

……………………………………………………………………………………………………………

17. Do you agree that the government must play a role to improve the state of
accounting in Sudan?
b. Yes b. No
18. If your answer in the above question number 17, Yes. please indicate the extent
to which you agree or disagree with each of the under listed methods as a means
by which the government could improve accounting in the Sudan:-

Methods Strongly Agree Don't know Disagree Strongly

Agree Disagree
1.Provide financial support to the
accounting profession
2.Provide effective accounting legislation

3. Establish a licensing authority for

setting standards for admission into
accounting practice.
4. Establish a broad national committee
(including accountants and non-
accountants) to advance accounting
education
5.Establish a broad national committee
(including accountants and non-
accountants) to advance accounting
practices
6. Establish a governmental agency
responsible for advancing accounting
practices.
Other, please specify, …………………………………………………………………………….
……………………………………………………………………………………………

232
 ‫‪Appendix 3‬‬
‫استبيان‪ -‬نموذج (أ)‬

‫إرشادات إلكمال االستبيان‬

‫هذا االستبيان سيتم توزيعه علي الشركات الصناعية في السودان‪ .‬ممثله في كبير المحاسبين‬ ‫‪.1‬‬
‫والمدير المالي ومدير المراجعة (او اي محاسب من ذوي الخبره)‪ ،‬هنالك حوجه لرأيك‬
‫كخطوه اوليه نحو تقييم التقارير المالية والممارسة المحاسبية في السودان‪.‬‬
‫بعض االسئله يمكن اجابتها بوضع دائره علي االجابة المناسبة‪ .‬وبعض االسئلة عن مزيد‬ ‫‪.2‬‬
‫من المعلومات التي نعتقد انها متوفره لديك‪.‬‬
‫يتضمن االستبيان بعض االسئلة ذات النهايات المفتوحه لتمكنك من التعبير عن رأيك‬ ‫‪.3‬‬
‫الشخصي بطريقة اكثرا تفصيال‪.‬‬
‫تم تصميم بعض االسئلة ليتم االجابه عنها وفقا لعدد من المستويات علي النحو التالي‪:‬‬ ‫‪.4‬‬
‫ال اوافق مطلقا‬ ‫ال اوافق‬ ‫ال ادري‬ ‫اوافق‬ ‫اوافق تماما‬
‫في إجابتك لهذه االسئله أرجو وضع عالمة )‪ (‬في المربع الذي يمثل بشكل وثيق إجابتك‬
‫ستقدم لي مساعده كبيره اذا ارفقت نسخه من احدث الحسابات المنشوره في شركتم عند‬ ‫‪.5‬‬
‫ارجاع االستبيان‪.‬‬
‫ال توجد اجابة صحيحة او خاطئة لذلك ارجو ان تحاول التعبيرعن رأيك حول جميع االسئلة‬ ‫‪.6‬‬

‫شكرا جزيال لمساعدتكم وتعاونكم‬

‫محتويات االستبيان ‪:‬‬

‫الجزء االول‪ :‬معلومات عن المبحوث‬

‫الجزء الثاني‪ :‬معلومات عن الممارسة المحاسبية في الشركة‪:‬‬

‫(أ) معلومات عن النظام المحاسبي والتقارير المالية في الشركه التي تعمل بها‬
‫(ب) معلومات عن طرق وقواعد إعداد التقارير المالية في الشركة التي تعمل‬
‫بها‬

‫الجزء الثالث‪ :‬معلومات عن النظام المحاسبي والممارسة المحاسبية في البلد ككل‬

‫(أ) حالة التقارير المالية‬
‫(ب) تحديات المحاسبة وتوصيات مقترحه‬

‫‪233‬‬
 ‫الجزء االول‪ :‬معلومات عن المبحوث‪:‬‬

‫أرجو وضع دائره حول رقم االجابة التي تتوافق بشكل وثيق مع التقييم الخاص بك‬
‫‪ .1‬اعلي مستوى تعليمي نظامي اكملته هو (الرجاء إختيار واحد فقط مع توضيح التخصص)‬
‫أ‪ .‬مدرسة ثانوية ‪..................................‬‬
‫ب‪ .‬دبلوم تقني تخصص ‪..........................‬‬
‫ج‪ .‬درجة البكالريوس تخصص ‪...................‬‬
‫د‪ .‬درجة الماجستير تخصص ‪......................‬‬
‫و‪ .‬درجة الدكتوراه تخصص ‪......................‬‬
‫هـ‪ .‬أخرى ‪,‬يرجي تحديدها ‪.........................‬‬
‫‪ .2‬البلد التي حصلت منه علي أحدث درجة علمية هو‪:‬‬
‫أ‪ .‬السودان‬
‫ب‪ .‬بلد عربي اخر‬
‫ج‪ .‬إنجلترا أو الواليات المتحدة االمريكية‬
‫د‪ .‬أخرى‪ ,‬أرجو تحديدها‪............................‬‬
‫‪ .3‬سنوات الخبره في مجال المحاسبة أوالمراجعة ‪:‬‬
‫أ‪ .‬أقل من ‪5‬‬
‫ب‪ .‬من ‪ 5‬حتي ‪10‬‬
‫ج‪ .‬أكثر من ‪10‬‬

‫الجزء الثاني‪ :‬معلومات عن الممارسة المحاسبية في الشركة‪:‬‬

‫(أ) معلومات عن النظام المحاسبي والتقارير المالية في الشركة التي تعمل لها‬
‫‪ .1‬نوع الشركة‬
‫أ‪ .‬شركة مساهمة عامة‬
‫ب‪ .‬شركة مساهمة خاصة‬
‫ج‪ .‬شركة حكومية‬
‫د‪ .‬شركة أسرة‬
‫و‪ .‬أخرى‪ ,‬أرجو تحديدها ‪..........................‬‬
‫‪ .2‬نوع القوائم المالية في الشركة (إختر واحده أو اكثر)‬
‫أ‪ .‬قائمة الدخل (حساب االرباح والخسائر)‬
‫ب‪ .‬قائمة االرباح المحتجزة‬
‫ج‪ .‬قائمة المركز المالي‬
‫د‪ .‬قائمة التدفقات المالية‬
‫و‪ .‬كل هذه القوائم‬
‫هـ‪ .‬أخرى‪ ,‬أرجو تحديدها ‪................‬‬
‫‪ .3‬يرجي ترتيب مستخدمي التقارير المالية ادناه وفقا ألهميتهم (أرجو إستخدام االرقام ‪،2 ،1‬‬
‫‪ 4 ،3‬في ترتيبهم) الرقم ‪ 1‬للمستخدم االكثر اهمية‪:‬‬

‫‪234‬‬
 ‫مستخدمو التقارير المالية‬ ‫الترتيب‬
‫السلطات الضريبية‬ ‫‪......‬‬
‫إدارة الشركة‬ ‫‪......‬‬
‫والمستثمرين‬ ‫المساهمين‬ ‫‪......‬‬
‫المتوقعين‬
‫البنوك ومانحي التمويل‬ ‫‪......‬‬

‫‪ .4‬هل هنالك اي تغيرات جوهرية في النظام المحاسبي خالل الخمس سنوات االخيره؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .5‬اذا كانت إجابتك عن السؤال اعاله (رقم ‪ )4‬ال ‪ ،‬ارجو الذهاب الي السؤال رقم ‪ ،6‬واذا‬
‫؟‬ ‫حدثت‬ ‫التي‬ ‫التغيرات‬ ‫نوع‬ ‫ما‬ ‫‪،‬‬ ‫نعم‬ ‫اجابتك‬ ‫كانت‬
‫ولماذ؟ ‪........................................................................‬‬
‫‪ .6‬هل الشركة التي تعمل بها تستخدم نظام محاسبي خاص يختلف عن النظام الشائع إستخدامه‬
‫في السودان؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .7‬اذا كانت إجابتك علي السؤال اعاله (رقم ‪ )6‬ال ‪ ،‬أرجو الذهاب للسؤال رقم ‪ ،8‬واذا كانت‬
‫إجابتك نعم ‪ ،‬أرجو ان تعطينا بعض التفاصيل عن السياسات المحاسبية‬
‫المستخدمة ‪....................................‬‬
‫‪...............................................................................................................‬‬
‫‪...............................................................................................................‬‬
‫(ب)‪ .‬معلومات عن طرق وقواعد إعداد التقارير المالية في الشركة التي تعمل بها‬
‫‪ .8‬اساس تقييم المخزون هو ‪:‬‬
‫أ‪ .‬سعر السوق‬
‫ب‪ .‬سعر التكلفة‬
‫ج‪ .‬التكلفة أو السوق ايهما أقل‬
‫‪ .9‬طريقة تقييم تكلفة المخزون هي‪:‬‬
‫أ‪ .‬الوارد أوال صادر أوال‬
‫ب‪ .‬الوارد أخيرا صادر أوال‬
‫ج‪ .‬طريقة المتوسط البسيط‬
‫د‪ .‬طريقة المتوسط المرجح‬
‫و‪ .‬أخرى‪ ،‬أرجو تحديدها ‪...............................‬‬
‫‪ .10‬طريقة إهالك االصول الثابته‬
‫أ‪ .‬طريقة القسط الثابت‬
‫ب‪ .‬طريقة القسط المتناقص‬
‫ج‪ .‬نسبة من االستخدام‬
‫د‪ .‬أخرى‪ ،‬أرجو تحديدها ‪.................................‬‬
‫‪ .11‬أساس تقييم االستثمارات قصيرة االجل هو‪:‬‬
‫أ‪ .‬سعر التكلفة‬
‫ب‪ .‬سعر السوق‬
‫ج ‪ .‬التكلفة أو السوق أيهما أقل‬
‫د‪ .‬أخرى‪ ,‬أرجو تحديدها ‪................................‬‬

‫‪235‬‬
 ‫‪ .12‬طريقة تصنيف االصول الثابته ومجمع االهالك هي‪:‬‬
‫أ‪ .‬االصول الثابته ناقصا مجمع االهالك‬
‫ب‪ .‬االصول الثابته بقيمتها الدفتريه‬
‫ج ‪ .‬االصول الثابته الثابته في جانب االصول ومجمع االهالك في جانب الخصوم‬
‫د‪ .‬أخرى‪ ،‬أرجو تحديدها ‪..................................................................‬‬
‫‪ .13‬نوع المراجعة الخارجية الذي تستخدمه هو‪:‬‬
‫أ‪ .‬المالية واالمتثال (المراجعة القانونية)‬
‫ب‪ .‬المراجعة المستقله (تدقيق االداء)‬
‫ج ‪ .‬أخرى‪ ،‬أرجو تحديدها ‪.........................................................‬‬
‫‪ .14‬هل هنالك جزء او شعبة متخصصة للمراجعة الداخلية في الشركة؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .15‬إذا كانت إجابتك على السؤال أعاله (رقم ‪ )14‬ال‪ ،‬أرجو الذهاب إلى السؤال رقم ‪ ، 16‬وإذا‬
‫كانت اجابتك نعم ‪ ،‬ما نوع المراجعة الداخلية الذي تستخدمه ‪:‬‬
‫أ‪ .‬المالية واالمتثال (المراجعة القانونية)‬
‫ب‪ .‬المراجعة المستقله (تدقيق االداء)‬
‫ج ‪ .‬أخرى‪ ،‬أرجو تحديدها ‪.........................................................‬‬
‫‪ .16‬ما هو نوع الموازنه الذي تستخدمه ؟‬
‫أ‪ .‬قصيرة االجل‬
‫ب‪ .‬طويلة االجل‬
‫ج ‪ .‬أخرى‪ ،‬أرجو تحديدها ‪.....................................................‬‬
‫‪ .17‬هل تستخدم دراسات إحصائية في إعداد الموازنة؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .18‬هل تستخدم التكاليف المعيارية؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬

‫الجزء الثالث‪ : :‬معلومات عن النظام المحاسبي والممارسة المحاسبية في البلد ككل‬

‫(أ) حالة التقارير المالية‬

‫‪ .1‬هل تعتقد أن هنالك مبادئ محاسبية متعارف عليها ومقبوله عموما في السودان(‪)GAAP‬؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .2‬هل تعقتقد أن هنالك حوجة لهذه المبادئ(‪ )GAAP‬في السودان ؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .3‬إذا كانت إجابتك على السؤال أعاله (رقم ‪ )2‬ال‪ ،‬أرجو الذهاب للسؤال رقم ‪ ،4‬وإذا كانت‬
‫إجابتك نعم‪ ،‬برأيك ماهي الجهات التي يجب أن تكون مسؤولة عن وضع المبادئ المحاسبية‬
‫المتعارف عليها والمقبولة عموما في السودان(‪)GAAP‬؟‬
‫أ‪ .‬المجلس السوداني للمحاسبين القانونيين (‪)SCCA‬‬
‫ب‪ .‬الحكومة‬
‫ج ‪ .‬الجامعات‬
‫د‪ .‬أخرى‪ ،‬أرجو تحديدها ‪........................‬‬

‫‪236‬‬
‫‪ . 4‬إعتمادا على معرفتك الخاصة‪ ،‬ما مدي فاعلية المراجعيين في إثبات نزاهة القوائم المالية في‬
‫الشركة؟‬
‫أ‪ .‬المراجعون يقومون بعمل ممتاز‬
‫ب‪ .‬المراجعون يقومون بعمل جيد‬
‫ج ‪ .‬المراجعون يقومون بعمل عادل‬
‫د‪ .‬المراجعون يقومون بعمل ضعيف‬

‫‪ . 5‬فيما يتعلق بمدى مالءمة المبادئ المحاسبية وإجراءت المراجعة الموجوده حاليا في السودان‪،‬‬
‫أرجو االشاره الي أي مدى توافق أو ال توافق علي العبارات التاليه‪:‬‬

‫الأوافق‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫العبارات‬

‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪ .1‬بالرغم من أن المبادئ المحاسبية وإجراءت‬
‫المراجعة الموجودة حاليا في السودان مستمده من‬
‫بريطانيا إال انها مالئمه للبيئة المحلية‪.‬‬
‫‪.2‬المبادئ المحاسبية وإجراءت المراجعة الموجوده‬
‫حاليا في السودان تحتاج الى تعديل لتصبح مالئمة‬
‫ومقبولة للبيئة المحلية‪.‬‬

‫‪ .6‬فيما يتعلق بالعوامل البيئية التي تؤثر على الممارسة المحاسبية والتقارير المالية في السودان‪،‬‬
‫أرجو االشاره إلى أي مدى توافق أو التوافق علي العوامل التاليه‪:‬‬

‫الأوافق‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫العوامل‬

‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪ .1‬نوع النظام اإلقتصادي‬
‫‪.2‬القيم الثقافية‬
‫‪.3‬النظام السياسي‬
‫‪.4‬النظام القانوني‬
‫‪.5‬اإلرث اإلستعماري‬
‫‪.6‬التعليم المحاسبي‬
‫‪.7‬طبيعة منشاءات األعمال‬
‫‪.8‬أخرى‪............................................................................................. ،‬‬
‫‪ .7‬هل تعتبر أن النظام المحاسبي في السودان يوفر معلومات مناسبة للمستخدميين المحليين؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬

‫‪ .8‬إذا كانت إجابتك على السؤال السابق (رقم ‪ )7‬نعم‪ ،‬أرجو الذهاب الي السؤال رقم ‪ ، 9‬وإذا‬
‫كانت إجابتك ال‪ ،‬أرجو االشاره الي أي مدى توافق أو ال توافق علي االسباب المتوقعة‬
‫التالية لعدم مناسبة المعلومات المحاسبية التي يقدمها النظام المحاسبي للمستخدميين‬
‫المحليين في السودان‪:‬‬

‫‪237‬‬
 ‫الأوافق‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫األسباب‬
‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬تم إنشاء النظام المحاسبي بناء علي نموذج الدول‬
‫المتقدمة واإلستعمار السابق‪( .‬بريطانيا)‬
‫‪.2‬ضعف وعدم كفاية التعليم المحاسبي‬
‫‪.3‬هيمنة الحكومة علي الهيئات المحاسبية المهنية‬
‫‪.4‬ضعف القواعد التنظيمية‬
‫‪.5‬غياب التشريعات الحكومية لتنظيم نظام اإلفصاح‬
‫المحاسبي‬
‫‪.6‬أخرى‪.............................................................................................. ،‬‬

‫‪ .9‬من أجل توافر معلومات التقارير المالية المطلوبة لتلبية إحتياجات المستخدميين‪ ،‬إلي أي مدى‬
‫توافق أو ال توافق على اإلقتراحات التالية لتطوير التقارير المالية في السودان؟‬

‫الأوافق‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫اإلقتراحات‬

‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬اإلفصاح عن المعلومات المالية باساس منتظم‬
‫‪ .2‬زيادة المعلومات المفصح عنها بالتقارير المالية‬
‫في الممارسة الحاليه‬
‫‪.3‬تعديل قانون الشركات خاصة القوانيين التي تتعلق‬
‫باإلفصاح‬
‫‪.4‬تنظيم مهنة المراجعة‬
‫‪.5‬تعزيز قوة جمعية المحاسبين السودانيين‬
‫‪.6‬تقليل التدخالت الحكومية في الممارسة المحاسبية‬
‫‪.7‬أخرى‪..................................................................................................... ،‬‬

‫(ب) تحديات المحاسبة وتوصيات مقترحة‬

‫‪ .10‬إلي أي مدى توافق أو ال توافق علي التحديات التاليه للممارسة المحاسبية في السودان؟‬
‫الأوافق‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫التحديات‬
‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬النقص في المحاسبين المؤهلين في كل المستويات‬
‫وكل مجاالت المحاسبة‬
‫‪.2‬عدم وجود التقارير المالية الكافية‬
‫‪.3‬عدم وجود معايير المراجعة الكافية‬
‫‪.4‬عدم وجود جمعيات وطنية قوية للمحاسبين‬
‫‪.5‬عدم وجود المحاسبة الكافية في الشركات‬
‫الحكومية‬
‫‪ .6‬يتم النظر إلي الممارسة المحاسبية في المقام‬
‫األول كوسيلة للتهرب من الضرائب‬

‫‪238‬‬
 ‫‪.7‬النقص في متطلبات اإلفصاح المالي‬
‫‪.8‬ضعف مناهج المحاسبة المعتمدة في الجامعات‬
‫المحلية‬
‫‪.9‬النقص في أعضاء هيئة التدريس المؤهلين بما فيه‬
‫الكفاية لتدريس مواضيع متقدمه لتحسين المحاسبة‬
‫والمراجعة‬
‫‪.10‬أخرى‪................................................................................................... ،‬‬

‫‪ .11‬هل تعتقد إنه من الممكن إعتماد معايير التقارير المالية الدولية (‪ )IFRS‬حاليا في السودان؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .12‬إذا كانت إجابتك على السؤال أعاله (رقم‪ )11‬نعم ‪ ،‬أرجو الذهاب إلي السؤال رقم ‪ ، 13‬وإذا‬
‫كانت ال ‪ ،‬أرجو االشاره إلي أي مدى توافق او ال توافق علي الصعوبات التالية التي تحد من إعتماد‬
‫معايير التقارير المالية الدولية (‪ )IFRS‬في السودان؟‬
‫الأوافق‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫الصعوبات‬
‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬ضعف القواعد التنظيمية‬
‫‪.2‬ضعف التعليم المحاسبي‬
‫‪.3‬ضعف مهارات المحاسبين‬
‫‪.4‬معظم الشركات شركات عائلية‬
‫‪.5‬تستند معايير التقارير الدولية علي الفكر االنجلو‪-‬‬
‫أمريكي وهو ال يتناسب مع البيئة المحلية‬
‫‪.6‬يجب علي البنوك االسالمية والمؤسسات المالية‬
‫ان تتبع معايير المحاسبة االسالمية علي الرغم من‬
‫التوافق‬
‫‪.7‬تدريب المحاسبين على فهم وتطبيق معايير‬
‫التقارير المالية الدولية ‪IFRS‬‬
‫‪.8‬إرتفاع تكاليف تطوير البنية التحتية والموارد‬
‫الالزمة لدعم المهنيين العاملين في معايير التقارير‬
‫الماليه الدولية ‪IFRS‬‬
‫‪ .9‬أخرى‪.................................................................................................. ،‬‬

‫‪ .13‬أرجو اإلشاره إلي أي مدى توافق أو ال توافق علي الفوائد التاليه التي يمكن الحصول عليها من‬
‫إعتماد معايير التقارير المالية الدولية في السودان؟‬

‫الأوافق‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫الفوائد‬

‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬يسهل نمواإلستثمار األجنبي المباشر في السودان‬
‫‪.2‬تقليل إمكانية السلوك غير القانوني مثل اإلحتيال‬
‫‪.3‬تعزيز مقارنة التقارير المالية‬
‫‪.4‬ضمان شفافية ومصداقية التقارير المالية للشركات‬
‫‪.5‬أخرى‪..................................................................................................... ،‬‬

‫‪239‬‬
‫‪ .14‬من خبرتك هل تعتقد أن المؤسسات األكاديمية يمكن ان تلعب دورا هاما في تطوير مهنة‬
‫المحاسبة من حيث‪:‬‬

‫الأوافق‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫البند‬

‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬تطوير التعليم المحاسبي األساسي‬
‫‪.2‬التدريب األكاديمي الفعال للمحاسبين‬
‫‪.3‬التدريب المهني الفعال للمحاسبين‬
‫‪.4‬تنظيم حلقات دراسية ودورات تدريبية لموظفي‬
‫الحكومة‬
‫‪.5‬تقديم التوصيات والمشوره لتطوير المفاهيم‬
‫المحاسبية‬
‫‪.6‬تقييم مناهج المحاسبة في المرحلة الثانوية وكذلك‬
‫في المستوى الجامعي‬
‫‪.7‬توفير قاعدة بحث لألغراض المحلية‬
‫‪.8‬أخرى‪................................................................................................... ،‬‬

‫‪. 15‬أرجو اإلشاره إلي أي مدى توافق أو ال توافق ان مهنة المحاسبة في السودان حاليا نشطة فيما‬
‫يتعلق بالمجاالت التاليه؟‬

‫الأوافق‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫المجاالت‬

‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪ .1‬دراسة وتقديم الحلول للمشاكل التي تواجه‬
‫الشركات‬
‫‪ .2‬وضع مدونه لقواعد السلوك‬
‫‪.3‬وضع مبادئ محاسبية تتناسب مع السودان‬
‫‪.4‬تطوير إجراءات فعاله للمراجعة‬
‫‪.5‬تنفيذ برامج بحثية فعاله في المحاسبة‬
‫‪.6‬أخرى‪..................................................................................................... ،‬‬

‫‪. 16‬أرجو اإلشاره ألي أى مدى توافق أو ال توافق على إن إنشاء كل من العناصر التاليه ضروري‬
‫لتطوير الممارسات المحاسبية في السودان؟‬

‫الأوافق‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫العناصر‬

‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬منظمات محاسبية نشطه‬
‫‪.2‬مبادئ محاسبية تناسب البيئه المحليه‬
‫‪.3‬إقرار التدقيق الرسمي‬
‫‪.4‬دعم كبير من الحكومة‬
‫‪.5‬برامج تعليمية فعالة‬

‫‪240‬‬
 ‫‪.6‬التعاون مع المنظمات الدوليه مثل مجلس معايير‬
‫المحاسبة الدولية ‪IASB‬‬
‫‪.7‬التدريب بعد التخرج للمحاسبين‬
‫‪.8‬أخرى‪..................................................................................................... ،‬‬

‫‪.17‬هل توافق على أن الحكومة يجب أن تلعب دورا في تطوير المحاسبة في السودان؟‬
‫ب‪.‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .18‬إذا كانت إجابتك على السؤال أعاله (رقم‪ )17‬نعم‪ ،‬أرجو االشاره إلي أي مدى توافق أو ال‬
‫توافق علي الطرق التالية كوسائل يمكن للحكومة من خاللها تطوير المحاسبة في السودان‪:‬‬

‫الأوافق‬ ‫ال‬ ‫ال أدري‬ ‫أوافق‬ ‫أوافق‬ ‫الطرق‬

‫مطلقا‬ ‫أوافق‬ ‫تماما‬
‫‪.1‬تقديم الدعم المالي لمهنة المحاسبة‬
‫‪.2‬توفير قوانين فعاله للمحاسبة‬
‫‪.3‬إنشاء سلطة الترخيص لوضع معايير‬
‫للدخول في الممارسات المحاسبية‬
‫‪.4‬تشكيل لجنة وطنية واسعة تضم‬
‫محاسبين وغير محاسبين للنهوض بالتعليم‬
‫المحاسبي‬
‫‪ .5‬تشكيل لجنة وطنية واسعة تضم‬
‫محاسبين وغير محاسبين للنهوض‬
‫بالممارسة المحاسبية‬
‫‪.6‬إنشاء هيئات حكومية مسؤوله عن‬
‫النهوض بالممارسة المحاسبية‬
‫‪.7‬أخرى‪........................................................................................................... ،‬‬

‫‪241‬‬
 ‫‪Appendix 4‬‬

‫إستبيان‪ -‬نموذج (ب)‬

‫إرشادات إلكمال االستبيان‬

‫‪.1‬هذا االستبيان سيتم توزيعه علي االكاديميين في الجامعات السودانية‪ ،‬هنالك حاجة لرأيكم كخطوة‬
‫أولية نحو تقييم التقارير المالية والممارسة المحاسبية في السودان‪.‬‬
‫‪.2‬بعض االسئله يمكن إجابتها بوضع دائره علي االجابة المناسبة‪ .‬وبعض االسئلة عن مزيد من‬
‫المعلومات التي نعتقد انها متوفرة لديك‪.‬‬
‫‪.3‬يتضمن االست بيان بعض االسئلة ذات النهايات المفتوحه لتمكنك من التعبير عن رأيك الشخصي‬
‫بطريقة اكثر تفصيال‪.‬‬
‫‪.4‬تم تصميم بعض االسئلة لتتم االجابة عنها وفقا لعدد من المستويات علي النحو التالي‪:‬‬
‫ال أوافق مطلقا‬ ‫ال أوافق‬ ‫ال أدري‬ ‫اأوافق‬ ‫أوافق تماما‬

‫في إجابتك لهذه االسئله أرجو وضع عالمة )‪ (‬في المربع الذي يمثل بشكل وثيق إجابتك‬
‫‪ .5‬ال توجد إجابة صحيحة أوخاطئة لذلك أرجو التعبيرعن رأيك حول جميع االسئلة‬
‫شكرا جزيال لمساعدتكم وتعاونكم‬

‫محتويات االستبيان ‪:‬‬

‫الجزء االول‪ :‬معلومات شخصية‬
‫الجزء الثاني‪ :‬معلومات عن التعليم المحاسبي في السودان‬
‫الجزء الثالث‪ :‬معلومات عن النظام المحاسبي والممارسة المحاسبية في البلد ككل‬

‫الجزء األول ‪ :‬معلومات شخصية‬

‫أرجو وضع دائره حول رقم االجابة التي تتوافق بشكل وثيق مع التقييم الخاص بك‬
‫‪.1‬أعلي مستوى تعليمي نظامي اكملته هو (الرجاء إختيار واحد فقط مع توضيح التخصص)‬
‫أ‪ .‬درجة الماجستير تخصص ‪....................................‬‬
‫ب‪ .‬درجة الدكتوراه تخصص ‪.....................................‬‬
‫ج‪ .‬دراسات ما بعد الدكتوراه تخصص ‪...........................‬‬
‫د‪ .‬أخرى‪ ،‬أرجو تحديدها ‪..........................................‬‬
‫‪.2‬البلد التي حصلت منه علي أحدث درجة علمية هو‪:‬‬
‫أ‪ .‬السودان‬
‫ب‪ .‬بلد عربي اخر‬
‫ج‪ .‬بريطانيا أو الواليات المتحدة األمريكية‬
‫د‪ .‬أخرى‪ ،‬أرجو تحديدها ‪..............................................‬‬
‫‪ .3‬الدرجه العلمية الحاليه في الوظيفة االكاديمية هي‪:‬‬
‫أ‪ .‬محاضر‬
‫ب‪ .‬أستاذ مساعد‬
‫ج‪ .‬أستاذ مشارك‬
‫د‪ .‬بروفسور‬

‫‪242‬‬
 ‫‪ .4‬سنوات الخبره في تدريس المحاسبة والمراجعة‬
‫أ‪ .‬أقل من ‪5‬‬
‫ب‪ .‬من ‪ 5‬وحتي ‪10‬‬
‫ج‪ .‬أكثر من ‪10‬‬
‫الجزء الثاني‪ :‬معلومات عن التعليم المحاسبي في السودان‪:‬‬
‫‪ .1‬من خبرتك‪ ،‬هل تعتقد ان قدرات خريجي المحاسبة من الجامعات السودانيه قد تم إعدادها‬
‫بما فيه الكفاية لمقابلة الطلب علي المهنيين؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .2‬إذا كانت إجابتك على السؤال أعاله (رقم‪ )1‬نعم ‪ ،‬أرجو الذهاب إلى السؤال رقم ‪ ،3‬إذا‬
‫كانت إجابتك ال‪ ،‬أرجو اإلشاره إلى أي مدى توافق أو ال توافق علي األسباب التالية التي قد‬
‫تكون سببا في تلك المشكلة‪:‬‬
‫ال‬ ‫ال‬ ‫أوافق أوافق ال‬ ‫األسباب‬
‫أدري أوافق أوافق‬ ‫تماما‬
‫مطلقا‬
‫‪ .1‬ضعف محتويات الكورسات والمناهج‬
‫‪.2‬غياب دور الحكومة في توجيه التعليم المحاسبي‬
‫والسيطره عليه‬
‫‪ .3‬عدم كفاية اجهزة الكمبيوتر وغيرها من معدات الدعم‬
‫والموارد‬
‫‪.4‬العدد الكبير من الطالب في الفصل قد يقلل من فرص‬
‫المشاركه‬
‫‪.5‬تستند معظم كتب المحاسبة علي بيئة االعمال في الدول‬
‫المتقدمه‬
‫‪.6‬معظم األساتذه لم يعددوا يشعرون بمسؤليتهم تجاه تدريب‬
‫الطالب للعمل‬
‫‪.7‬أخرى‪ ،‬أرجو‬
‫تحديدها ‪...............................................................................................................‬‬

‫‪ .3‬أرجو اإلشاره إلى أي مدى توافق أو ال توافق على الوسائل التالية لتطوير التعليم المحاسبي‬
‫في السودان‬
‫ال‬ ‫ال‬ ‫ال‬ ‫أوافق أوافق‬ ‫الوسائل‬
‫أدري أوافق أوافق‬ ‫تماما‬
‫مطلقا‬
‫‪.1‬التحديث الدوري لكورسات المحاسبة‬
‫‪.2‬إنشاء مركز لتطويرالتعليم المحاسبي برعاية‬
‫الحكومة‬
‫‪.3‬تزويد المؤسسات التعليمية بالكمبيوترات والمعدات‬
‫والموارد‬
‫‪.4‬زيادة أعداد هيئة التدريس والمدربين‬
‫‪.5‬أخرى‪ ،‬أرجو‬
‫تحديدها ‪..........................................................................................................‬‬

‫‪243‬‬
 ‫الجزء الثالث‪ :‬معلومات عن النظام المحاسبي في السودان‪:‬‬

‫‪ .1‬هل تعتقد أن هنالك مبادئ محاسبية متعارف عليها ومقبوله عموما في السودان(‪)GAAP‬؟‬
‫ب‪ .‬ال‬ ‫أ‪.‬نعم‬
‫‪ .2‬هل تعقتقد أن هنالك حوجة لهذه المبادئ(‪ )GAAP‬في السودان ؟‬
‫ب‪ .‬ال‬ ‫أ‪.‬نعم‬
‫‪ .3‬إذا كانت إجابتك على السؤال أعاله (رقم ‪ )2‬ال‪ ،‬أرجو الذهاب للسؤال رقم ‪ ،4‬وإذا كانت‬
‫إجابتك نعم‪ ،‬برأيك ماهي الجهات التي يجب أن تكون مسؤولة عن وضع المبادئ المحاسبية‬
‫المتعارف عليها والمقبولة عموما في السودان(‪)GAAP‬؟‬
‫أ‪ .‬المجلس السوداني للمحاسبين القانونيين (‪)SCCA‬‬
‫ب‪.‬الحكومة‬
‫ج‪ .‬الجامعات‬
‫د‪.‬أخرى‪ ،‬أرجو تحديدها ‪..........................................‬‬
‫‪ .4‬إعتمادا على معرفتك الخاصة‪ ،‬ما مدي فاعلية المراجعيين في إثبات نزاهة القوائم المالية‬
‫في الشركة؟‬
‫أ‪ .‬المراجعون يقومون بعمل ممتاز‬
‫ب‪ .‬المراجعون يقومون بعمل جيد‬
‫ج ‪ .‬المراجعون يقومون بعمل عادل‬
‫د‪ .‬المراجعون يقومون بعمل ضعيف‬

‫‪.5‬فيما يتعلق بمدى مالءمة المبادئ المحاسبية وإجراءت المراجعة الموجوده حاليا في السودان‪،‬‬
‫أرجو اإلشاره الى أي مدى توافق أو ال توافق علي العبارات التالية‪:‬‬

‫ال ال أوافق‬ ‫أوافق أوافق ال‬ ‫العبارات‬

‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪ .1‬بالرغم من أن المبادئ المحاسبية وإجراءت‬
‫المراجعة الموجودة حاليا في السودان مستمده من‬
‫بريطانيا إال انها مالئمه للبيئة المحلية‪.‬‬
‫‪.2‬المبادئ المحاسبية وإجراءت المراجعة الموجوده‬
‫حاليا في السودان تحتاج الى تعديل لتصبح مالئمة‬
‫ومقبولة للبيئة المحلية‪.‬‬

‫‪ .6‬فيما يتعلق بالعوامل البيئية التي تؤثر على الممارسة المحاسبية والتقارير المالية في السودان‪،‬‬
‫أرجو االشاره إلى أي مدى توافق أو التوافق علي العوامل التالية‪:‬‬

‫ال أوافق‬ ‫ال‬ ‫ال‬ ‫أوافق‬ ‫أوافق‬ ‫العبارات‬

‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪ .1‬نوع النظام اإلقتصادي‬
‫‪.2‬القيم الثقافية‬
‫‪.3‬النظام السياسي‬
‫‪.4‬النظام القانوني‬

‫‪244‬‬
 ‫‪.5‬اإلرث اإلستعماري‬
‫‪.6‬التعليم المحاسبي‬
‫‪.7‬طبيعة منشاّت األعمال‬
‫‪.8‬أخرى ‪...................................................................................................‬‬

‫‪ .7‬هل تعتبر أن النظام المحاسبي في السودان يوفر معلومات مناسبة للمستخدميين المحليين؟‬
‫ب‪ .‬ال‬ ‫أ‪.‬نعم‬
‫‪ .8‬إذا كانت إجابتك على السؤال أعاله (رقم ‪ )7‬نعم‪ ،‬أرجو الذهاب الى السؤال رقم ‪ ، 9‬وإذا كانت‬
‫إجابتك ال‪ ،‬أرجو االشاره الى أي مدى توافق أو ال توافق على األسباب المتوقعة التالية لعدم مناسبة‬
‫المعلومات المحاسبية التي يقدمها النظام المحاسبي للمستخدميين المحليين في السودان‬
‫ال‬ ‫ال‬ ‫ال‬ ‫أواف أواف‬ ‫األسباب‬
‫ق أدري أوافق أوافق‬ ‫ق‬
‫مطلقا‬ ‫تماما‬
‫‪.1‬تم إنشاء النظام المحاسبي بناء على نموذج الدول‬
‫المتقدمة واإلستعمار السابق‪( .‬بريطانيا)‬
‫‪.2‬ضعف وعدم كفاية التعليم المحاسبي‬
‫‪.3‬هيمنة الحكومة على الهيئات المحاسبية المهنية‬
‫‪.4‬ضعف القواعد التنظيمية‬
‫‪.5‬غياب التشريعات الحكومية لتنظيم نظام اإلفصاح‬
‫المحاسبي‬
‫‪.6‬أخرى‪ ,‬أرجو‬
‫تحديدها ‪..........................................................................................................‬‬

‫‪ .9‬من أجل توافر معلومات التقارير المالية المطلوبة لتلبية إحتياجات المستخدميين‪ ،‬إلى أي مدى‬
‫توافق أو ال توافق على اإلقتراحات التالية لتطوير التقارير المالية في السودان؟‬
‫ال‬ ‫ال‬ ‫ال‬ ‫أوافق أوافق‬ ‫اإلقتراحات‬
‫أدري أوافق أوافق‬ ‫تماما‬
‫مطلقا‬
‫‪.1‬اإلفصاح عن المعلومات المالية باساس منتظم‬
‫‪ .2‬زيادة المعلومات المفصح عنها بالتقارير المالية‬
‫في الممارسة الحاليه‬
‫‪.3‬تعديل قانون الشركات خاصة القوانيين التي تتعلق‬
‫باإلفصاح‬
‫‪.4‬تنظيم مهنة المراجعة‬
‫‪.5‬تعزيز قوة جمعية المحاسبين السودانيين‬
‫‪.6‬تقليل التدخالت الحكومية في الممارسة المحاسبية‬
‫‪.7‬أخرى‪ ،‬أرجو‬
‫تحديدها ‪...........................................................................................................‬‬

‫‪245‬‬
 ‫‪ .10‬إلى أي مدى توافق أو ال توافق علي التحديات التالية للممارسة المحاسبية في السودان؟‬
‫ال ال أوافق‬ ‫أوافق أوافق ال‬ ‫التحديات‬
‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬النقص في المحاسبين المؤهلين في كل المستويات‬
‫وكل مجاالت المحاسبة‬
‫‪.2‬عدم وجود التقارير المالية الكافية‬
‫‪.3‬عدم وجود معايير المراجعة الكافية‬
‫‪.4‬عدم وجود جمعيات وطنية قوية للمحاسبين‬
‫‪.5‬عدم وجود المحاسبة الكافية في الشركات‬
‫الحكومية‬
‫‪ .6‬يتم النظر إلي الممارسة المحاسبية في المقام‬
‫األول كوسيلة للتهرب من الضرائب‬
‫‪.7‬النقص في متطلبات اإلفصاح المالي‬
‫‪.8‬ضعف مناهج المحاسبة المعتمدة في الجامعات‬
‫المحلية‬
‫‪.9‬النقص في أعضاء هيئة التدريس المؤهلين بما فيه‬
‫الكفاية لتدريس مواضيع متقدمه لتحسين المحاسبة‬
‫والمراجعة‬
‫‪.10‬أخرى‪ ،‬أرجو تحديدها ‪...........................................................................‬‬
‫‪ .11‬هل تعتقد إنه من الممكن إعتماد معايير التقارير المالية الدولية (‪ )IFRS‬حاليا في السودان؟‬
‫ب‪ .‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .12‬إذا كانت إجابتك على السؤال أعاله (رقم‪ )11‬نعم ‪ ،‬أرجو الذهاب إلى السؤال رقم ‪ ، 13‬وإذا‬
‫كانت ال ‪ ،‬أرجو اإلشاره إلى أي مدى توافق او ال توافق على الصعوبات التالية التي تحد من إعتماد‬
‫معايير التقارير المالية الدولية (‪ )IFRS‬في السودان؟‬
‫ال ال أوافق‬ ‫أوافق أوافق ال‬ ‫الصعوبات‬
‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬ضعف القواعد التنظيمية‬
‫‪.2‬ضعف التعليم المحاسبي‬
‫‪.3‬ضعف مهارات المحاسبين‬
‫‪.4‬معظم الشركات شركات عائلية‬
‫‪.5‬تستند معايير التقارير الدولية علي الفكر االنجلو‪-‬‬
‫أمريكي وهو ال يتناسب مع البيئة المحلية‬
‫‪.6‬يجب على البنوك االسالمية والمؤسسات المالية‬
‫ان تتبع معايير المحاسبة االسالمية على الرغم من‬
‫التوافق‬
‫‪.7‬تدريب المحاسبين على فهم وتطبيق معايير‬
‫التقارير المالية الدولية ‪IFRS‬‬
‫‪.8‬إرتفاع تكاليف تطوير البنية التحتية والموارد‬
‫الالزمة لدعم المهنيين العاملين في معايير التقارير‬
‫الماليه الدولية ‪IFRS‬‬
‫‪.9‬أخرى‪ ،‬أرجو تحديدها ‪.......................................................................‬‬

‫‪246‬‬
‫‪ .13‬أرجو اإلشاره إلى أي مدى توافق أو ال توافق على الفوائد التالية التي يمكن الحصول عليها من‬
‫إعتماد معايير التقارير المالية الدولية في السودان؟‬
‫ال ال أوافق‬ ‫أوافق أوافق ال‬ ‫الفوائد‬
‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬يسهل نمواإلستثمار األجنبي المباشر في السودان‬
‫‪.2‬تقليل إمكانية السلوك غير القانوني مثل اإلحتيال‬
‫‪.3‬تعزيز مقارنة التقارير المالية‬
‫‪.4‬ضمان شفافية ومصداقية التقارير المالية‬
‫للشركات‬
‫‪.5‬أخرى‪ ،‬أرجو‬
‫تحديدها ‪..........................................................................................................‬‬
‫‪ .14‬من خبرتك هل تعتقد أن المؤسسات األكاديمية يمكن ان تلعب دورا هاما في تطوير مهنة‬
‫المحاسبة من حيث‪:‬‬
‫ال ال أوافق‬ ‫أوافق أوافق ال‬ ‫البند‬
‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬تطوير التعليم المحاسبي األساسي‬
‫‪.2‬التدريب األكاديمي الفعال للمحاسبين‬
‫‪.3‬التدريب المهني الفعال للمحاسبين‬
‫‪.4‬تنظيم حلقات دراسية ودورات تدريبية لموظفي‬
‫الحكومة‬
‫‪.5‬تقديم التوصيات والمشوره لتطوير المفاهيم‬
‫المحاسبية‬
‫‪.6‬تقييم مناهج المحاسبة في المرحلة الثانوية‬
‫وكذلك في المستوى الجامعي‬
‫‪.7‬توفير قاعدة بحث لألغراض المحلية‬
‫‪ .8‬أخرى‪ ،‬أرجو‬
‫تحديدها ‪..........................................................................................................‬‬
‫‪.15‬أرجو اإلشاره إلى أي مدى توافق أو ال توافق على إن مهنة المحاسبة في السودان حاليا نشطة‬
‫فيما يتعلق بالمجاالت التالية؟‬
‫ال ال أوافق‬ ‫أوافق أوافق ال‬ ‫البند‬
‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪ .1‬دراسة وتقديم الحلول للمشاكل التي تواجه‬
‫الشركات‬
‫‪ .2‬وضع مدونه لقواعد السلوك‬
‫‪.3‬وضع مبادئ محاسبية تتناسب مع السودان‬
‫‪.4‬تطوير إجراءات فعاله للمراجعة‬
‫‪.5‬تنفيذ برامج بحثية فعاله في المحاسبة‬
‫‪.6‬أخرى‪ ،‬أرجو‬
‫تحديدها ‪..........................................................................................................‬‬

‫‪247‬‬
‫‪ .16‬أرجو اإلشاره إلى أى مدى توافق أو ال توافق على إن إنشاء كل من العناصر التالية ضروري‬
‫لتطوير الممارسات المحاسبية في السودان؟‬
‫ال ال أوافق‬ ‫أوافق أوافق ال‬ ‫العناصر‬
‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬منظمات محاسبية نشطه‬
‫‪.2‬مبادئ محاسبية تناسب البيئه المحليه‬
‫‪.3‬إقرار التدقيق الرسمي‬
‫‪.4‬دعم كبير من الحكومة‬
‫‪.5‬برامج تعليمية فعالة‬
‫‪.6‬التعاون مع المنظمات الدولية مثل مجلس معايير‬
‫المحاسبة الدولية ‪IASB‬‬
‫‪.7‬التدريب بعد التخرج للمحاسبين‬
‫‪.8‬أخرى‪ ،‬أرجو‬
‫تحديدها ‪...........................................................................................................‬‬

‫‪ .17‬هل توافق على أن الحكومة يجب أن تلعب دورا في تطوير المحاسبة في السودان؟‬
‫ب‪.‬ال‬ ‫أ‪ .‬نعم‬
‫‪ .18‬إذا كانت إجابتك على السؤال أعاله (رقم‪ )17‬نعم‪ ،‬أرجو االشاره إلى أي مدى توافق أو ال‬
‫توافق على الطرق التالية كوسائل يمكن للحكومة من خاللها تطوير المحاسبة في السودان‪:‬‬

‫ال ال أوافق‬ ‫أوافق أوافق ال‬ ‫العناصر‬

‫أدري أوافق مطلقا‬ ‫تماما‬
‫‪.1‬تقديم الدعم المالي لمهنة المحاسبة‬
‫‪.2‬توفير قوانين فعاله للمحاسبة‬
‫‪.3‬إنشاء سلطة الترخيص لوضع معايير للدخول في‬
‫الممارسات المحاسبية‬
‫‪.4‬تشكيل لجنة وطنية واسعة تضم محاسبين وغير‬
‫محاسبين للنهوض بالتعليم المحاسبي‬
‫‪ .5‬تشكيل لجنة وطنية واسعة تضم محاسبين وغير‬
‫محاسبين للنهوض بالممارسة المحاسبية‬
‫‪.6‬إنشاء هيئات حكومية مسؤوله عن النهوض‬
‫بالممارسة الممحاسبية‬
‫‪ .7‬أخرى‪ ،‬أرجو‬
‫تحديدها ‪.........................................................................................................‬‬

‫‪248‬‬
 Appendix NO (5)

ABBREVIATIONS
Abbreviation Description
AAA American Accounting Association
AAC African Accounting Council
AAOIFI Accounting and Auditing Organization for Islamic Financial Institutions
ABC Activity Based Costing
ACCA Association of Chartered Certified Accountants
AFB African Development Bank
AGC Auditor General Chamber
BSC Balance Score Card
BSSAB British’s Statements of Standard Accounting Practice
CAA Central Accounting Administration
CAO Central Accounting Organization
CBOS Central Bank of Sudan
CMA Capital Market Act
CPA Comprehensive Peace Agreement
EAS Egyptian Accounting Standards
EEC European Economic Community
ESCAA Egyptian Society of Chartered Accountants and Auditors
FIFO First In First Out
GAAP Generally Accepted Accounting Principles
GDP Gross Domestic Product
IAS International Accounting Standards
IASB International Accounting Standard Board
IASC International Accounting Standard Committee
IASCA International Arab Society Certified Accountants
IDA International Development Association
IFA International Federation of Accountants
IFC International Finance Corporation
IFI Islamic Financial Institutions
IFRS International Financial Reporting Standards
IMF International Monetary Fund
IPSAS International Public Sector Accounting Standards
ISA Insurance Supervisory Authority
ISAR International Standard of Accounting and Reporting
KSE Khartoum Stock Exchange
LAAA Libyan Accounting and Auditing Association
LCC Libyan Commercial Code
LIFO Last In First Out
MAASC Mauritania Accounting and Auditing Committee
MENA Middle East and North Africa
NAC National Audit Chamber
OECD Organization for Economic Co-operation and Development
ROSC Report on the Observance of Standards and Codes

249
 SAA Saudi Accounting Association
SAAPOC Sudan Accounting and Auditing Profession Organization Council
SAMA Saudi Arabian Monetary Authority
SCCA Sudan Council for Certified Accountants
SME Small and Medium Enterprises
SOCPA Saudi Organization of Certified Public Accountants
SPSS Statistical Package for Social Sciences
SRS Simple Random Sampling
SUNA Sudan News Agency
TWC Third World Countries
UK United Kingdom
UN United Nations
USA United States of America
WB World Bank

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 Appendix No (6)
Opširni rezime
Arapske zemlje imaju brojne društvene i kulturne sličnosti. Stoga, one predstavljaju
jedno specifično društveno okruženje sličnih verovanja, praksi, običaja i ponašanja.
Socijalno i kulturno okruženje utiče na međunarodno poslovanje i finansijsko
izveštavanje u svakoj zemlji ponaosob. Međutim, postoje značajne razlike u
ekonomskim karakteristikama, kao što su: bruto domaći proizvod (BDP), dohodak po
glavi stanovnika, inflacija i prirodni resursi. Te razlike se uglavnom odnose na
otkrivanje i izvoz nafte u zemljama zaliva. Ovo istraživanje pruža smernice o stanju
finansijskog izveštavanja u arapskim zemljama, a kroz pregled dostupne literature o
faktorima okruženja koji utiču na finansijsko izveštavanje u tim zemljama, fokusirajući
se uglavnom na stanje računovodstvenog obrazovanja, računovodstvene profesije,
regulatornog okvira i obima prihvaćenosti IFRS. Pored toga, istraživanje pruža uporedni
pregled stanja računovodstvenih praksi u nekim odabranim arapskim zemljama.
Nadalje, istraživanje uključuje empirijsku studiju o stanju finansijskog izveštavanja u
Sudanu, kao delu arapskog regiona, čiji je cilj ispitivanje faktora koji prevashodno utiču
na stanje u ovoj zemlji. Stoga, ono je fokusirano na: faktore okruženja koji utiču na
računovodstvenu praksu u Sudanu, stanje računovodstva, računovodstvenu profesiju,
regulatorni okvir, izazove sa kojima se suočavaju računovodstvene prakse, koristi i
determinante usvajanja IFRS u Sudanu, kao i ostale predloge za poboljšanje.

Na kraju empirijske studije treba odgovoriti na sledeća pitanja:

1. Koji su faktori okruženja koji utiču na računovodstvene prakse u Sudanu?

2. Kakvo je trenutno stanje računovodstvene edukacije i računovodstvene prakse u

Sudanu?

3. Kakvo je trenutno stanje regulatornog okvira računovodstva u Sudanu?

4. Koje su potencijalne koristi usvajanja IFRS u Sudanu?

5. Koje su teškoće koje sprečavaju usvajanje IFRS u Sudanu?

6. Koji su izazovi sa kojima se suočava računovodstvena praksa u Sudanu?

7. Koji su predlozi za poboljšanja?

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Pored ispitivanja i opisa gore navedenih elemenata, cilj istraživanja je da ispita sledeće
hipoteze:

H1: Brojni istorijski, kulturni i ekonomski faktori rezultirali su nezadovoljavajućim

stanjem finansijskog izveštavanja u Sudanu i drugim arapskim zemljama.

H2: Vladina dominacija nad računovodstvenim profesionalnim telima u Sudanu čini da

računovodstvena profesija zaostaje za savremenim razvojem u svetu.

H3: Nedostatak sistematskog računovodstvenog obrazovanja otežava razvoj

računovodstvenih praksi u Sudanu.

H4: Računovodstveni sistem u Sudanu pruža neadekvatne informacije za određene

lokalne korisnike, jer je kreiran po modelu naprednih računovodstvenih praksi bivše
kolonijalne vlasti – Ujedinjenog Kraljevstva.

H5: Slabost regulatornog sistema i računovodstvenog obrazovanja, kao i priroda

vlasništva nad poslovanjem, ograničava usvajanje IFRS u Sudanu.

H6: Ograničeno ili potpunije usvajanje IFRS u Sudanu može poboljšati kvalitet
informacija koje pruža lokalni sistem finansijskog izveštavanja.

Metodologija ovog istraživanja bila je usmerena ka postavljenim istraživačkim

pitanjima i postizanju prethodno definisanih ciljeva.Usled činjenice da je prilikom
istraživanja nedostajala adekvatna literatura i našeg osnovnog cilja da se opiše stanje
finansijskog izveštavanja u Sudanu, primenjena je deskriptivna metodologija
istraživanja. Populacije ovog istraživanja sastoje se od računovođa u sudanskim
industrijskim kompanijama i akademika na sudanskim univerzitetima i institucijama.
Podaci empirijske studije prikupljeni su putem upitnika i nestrukturiranih pitanja
intervjua. Zatim su deskriptivne statistike, test Mann–Vhitnei i SPSS statistički paketi
korišćeni za analizu i istraživanje stavova ispitanika i razlika u njihovoj percepciji stanja
finansijskog izveštavanja u Sudanu.

Empirijska studija zasnovana je samo na Sudanu, a razlozi su sledeći:

1. Sudan je matična zemlja istraživača, što je posebno važno po pitanju razumevanja

jezika i kulture. Takođe, kandidat ima i akademsko i praktično znanje iz računovodstva,

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što je rezultat njegovog rada kao predavača na Odseku za računovodstvo i finansije na
Univerzitetu Gadarif u Sudanu. Prikupljanje podataka je stoga bilo olakšano.

2. Literatura na engleskom jeziku u vezi sa finansijskim izveštavanjem u Sudanu

prilično je oskudna. Stoga, ovo istraživanje može pružiti informacije multinacionalnim
kompanijama i svim međunarodnim investitorima.

Istraživanje je podeljeno na pet poglavlja: prvo poglavlje obuhvatilo je računovodstvene

sisteme u arapskim zemljama, drugo poglavlje se bavi osnovnim karakteristikama
finansijskog izveštavanja u Sudanu, dok se u trećem poglavlju pružaju uporedni
pregledi računovodstvenih praksi u arapskim zemljama. Četvrto poglavlje odnosi se na
empirijsku studiju o trenutnim računovodstvenim praksama u Sudanu, dok je poslednje,
peto poglavlje, ponudilo perspektive za poboljšanje sistema finansijskog izveštavanja u
Sudanu. Na kraju istraživanja dati su zaključci.

Istraživanje računovodstvene literature obuhvatilo je tri glavna područja:

računovodstveni sistem u arapskim zemljama, osnovne karakteristike finansijskog
izveštavanja u Sudanu i uporedni pregled računovodstvenih praksi u arapskim
zemljama. Prvo područje obuhvata: računovodstvene sisteme u zemljama u razvoju,
specifičnosti računovodstvenih sistema u arapskim zemljama, uticaj međunarodne
harmonizacije računovodstva i razlozi i prepreke za harmonizaciju. Drugi deo obuhvata:
uticaj istorijskih i faktora okruženja na finansijsko izveštavanje u Sudanu, pravni
regulatorni okvir računovodstvenih praksi u Sudanu, računovodstveno obrazovanje i
profesiju u Sudanu i slabosti u sadašnjem sistemu finansijskog izveštavanja. Treći deo
se sastoji od: računovodstvene prakse u Egiptu, računovodstvene prakse u Saudijskoj
Arabiji, računovodstvene prakse u Libiji i uporedne analize odabranih zemalja.

Iz pregleda literature možemo izvesti sledeće zaključke:

1. Arapske zemlje su društveno i kulturno slične. Stoga, one predstavljaju jedno

društveno okruženje sličnog verovanja, prakse, običaja i ponašanja društva. Socijalno i
kulturno okruženje arapskih zemalja utiče na međunarodno poslovanje i finansijsko
izveštavanje u bilo kojoj od ove dvadeset dve zemlje.

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2. Kompanije u arapskim zemljama koriste različita računovodstvena pravila i propise
za merenje, priznavanje i obelodanjivanje finansijske pozicije i rezultata poslovanja.
Prema tome, nemoguće je uporediti finansijske rezultate različitih kompanija u
različitim arapskim zemljama. Ovo će negativno uticati na strane investicije, listiranje
stranih kompanija i tržište kapitala. Za rešavanje pitanja upoređivanja i pružanja
pouzdanijih, tačnih i valjanih finansijskih računovodstvenih informacija, arapske zemlje
bi kolektivno trebalo da usvoje međunarodnu računovodstvenu regulativu – IFRS.

3. Efikasnost računovodstvenog sistema u ovim zemljama je daleko od

zadovoljavajućeg učinka i nedostaje integracija između računovodstva i ekonomskog
razvoja. Da bi se rešili gorući problemi, ove zemlje moraju posvetiti više pažnje ka
unapređenju kvaliteta svojih računovodstvenih sistema u odnosu na lokalne potrebe i
međunarodne savremene potrebe računovodstva uopšte.

4. Neke od ovih zemalja su osetile potrebu za razvijanjem sopstvenog sistema

računovodstva, dok druge nisu. Stoga je nivo razvoja koji je napravljen u cilju
poboljšanja računovodstva različit od zemlje do zemlje. Neke od njih su usvojile ili
planiraju da usvoje IFRS, dok druge nisu i nemaju plan da ih usvoje.

5. Računovođe u arapskim zemljama nisu dovoljno kvalifikovane za ovu vrstu posla.

Nepostojanje jakih računovodstvenih organizacija i dominacija vlade nad
računovodstvenim telima negativno utiče na stanje računovodstvene profesije u ovim
zemljama.

6. U većini arapskih zemalja računovodstveni obrazovni sistem formiran je po ugledu

na sistem kolonijalnih vlasti ili je duboko pogođen snažnim uticajem egipatskog
računovodstvenog sistema, a koji je formiran pod uticajem bivših kolonijalnih sila. Ovi
obrazovni sistemi svakako ne odgovaraju arapskim zemljama.

Kao što je ranije navedeno, dva upitnika i nestrukturirani intervjui korišćeni su za

prikupljanje potrebnih podataka kako bi se postigli ciljevi ovog istraživanja. Opisi ovih
upitnika i rezultati analize su sažeti u nastavku:

i. Upitnik praktičarima (računovođama u industrijskim kompanijama u Sudanu).

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ii. Upitnik akademicima (profesorima koji predaju računovodstvo i reviziju na
sudanskim univerzitetima).

iii. Nestrukturirani intervju sa sertifikovanim računovođama i odgovornim pojedincima

u regulatornim telima.

Dva upitnika su posebno sastavljena kako bi se postigli sledeći ciljevi:

– Prikazivanje faktora okruženja koji utiču na računovodstvene prakse u Sudanu iz dve

različite perspektive;

– Razmatranje mišljenja o stanju finansijskog izveštavanja, računovodstvene prakse i

podesnosti računovodstvenih informacija za lokalne korisnike u Sudanu;

– Procena stanja računovodstvene profesije i računovodstva u Sudanu i nuđenje

predloga za poboljšanje;

– Determinisanje ključnih izazova sa kojima se suočava računovodstvena profesija u

Sudanu, iz perspektive dve grupe ispitanika;

– Naglašavanje prednosti i teškoća za usvajanje IFRS u Sudanu i

– Analiza uloge akademskih institucija u poboljšanju računovodstvenih praksi u

Sudanu.

Upitnik koji je prosleđen računovođama usmeren je ka odvojenom prikupljanju

informacija o trenutnim računovodstvenim praksama u sudanskim industrijskim
kompanijama. Takođe, i upitnik koji je prosleđen profesorima bio je usmeren ka
odvojenom prikupljanju informacija o računovodstvenom obrazovanju u zemlji i
prikupljanju predloga za poboljšanje. Cilj intervjua bio je da prikaže različita mišljenja i
ukaže na eventualne nedostatke u upitnicima.Na osnovu odgovora dve grupe uzoraka,
izvedeni su sledeći zaključci:

1. Faktori okruženja koji utiču na računovodstvene prakse u Sudanu su:

računovodstveno obrazovanje, kulturne vrednosti, pravni sistem, vrsta ekonomskog
sistema, priroda vlasništva nad preduzećima i politički sistem.

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2. Postojeće računovodstvene i revizorske procedure u Sudanu potiču iz praksi
Ujedinjenog Kraljevstva. Stoga ih je potrebno izmeniti kako bi bile pogodnije i
prihvatljivije za lokalno okruženje. Uprkos postojanju opšte saglasnosti između
praktičara i profesora o modifikaciji postojećih računovodstvenih i revizorskih
procedura u Sudanu, došlo se do razlike u nivou slaganja po ovom pitanju (72%
profesora, 53,52% praktičara).

3. Tradicionalni računovodstveni sistem, koji je do sada primenjen u ovoj zemlji, nije

ispunio zahteve lokalnih korisnika. Ovaj sistem je zasnovan na britanskom
računovodstvenom sistemu. Prihvaćeni računovodstveni zahtevi imaju oblik zakona koji
je još uvek pod uticajem Zakona o preduzećima iz 1925. godine, a koji nije izmenjen od
kada je zemlja stekla nezavisnost. Zakon je zastareo i nepodoban da ispuni zahteve
promenljivog poslovnog okruženja. Računovodstveni sistem u Sudanu je nedovoljno
razvijen da bi pružio odgovarajuće informacije lokalnim korisnicima, a razlozi su:
nepostojanje vladinog zakonodavstva za organizovanje sistema obelodanjivanja u
računovodstvu, slabost regulatornog sistema, zatim to što je računovodstveni sistem
stvoren po modelu naprednih računovodstvenih praksi bivše kolonijalne sile (UK),
slabost i neadekvatnost računovodstvenog obrazovanja, kao i vladina dominacija nad
računovodstvenim profesionalnim telima.

4. Stanje računovodstvene profesije u Sudanu karakteriše: nedostatak kvalifikovanih

računovođa na svim nivoima i u svim oblastima računovodstva i nedostatak snažnih
nacionalnih udruženja računovođa, pa računovodstvena profesija u Sudanu ne prati tok
savremenih dešavanja. Štaviše, vladina dominacija nad računovodstvenim
profesionalnim telima je vrlo štetan faktor u razvoju računovodstvene profesije i
računovodstvene prakse u zemlji u celini. Da bi se poboljšala ova situacija
računovodstvene profesije, predložene su brojne izmene, kao što su: smanjenje uticaja
vladine intervencije u računovodstvenoj praksi, jačanje moći sudanskog udruženja
računovođa, osnivanje organa za izdavanje dozvola za utvrđivanje standarda za prijem u
računovodstvenu praksu, pružanje finansijske podrške računovodstvenoj profesiji i
saradnja sa međunarodnim organizacijama kao što je IASB. Akademske institucije
mogu podstaći unapređenje računovodstvene profesije pružanjem: efikasne akademske
obuke za računovodstveno osoblje, seminara i obuka za državne službenike, efikasnog

256
profesionalnog osposobljavanja za računovodstveno osoblje, preporuka i saveta za
razvoj računovodstvenih koncepata i procenu računovodstvenog kurikuluma na
srednjoškolskom, kao i na univerzitetskom nivou.

5. Računovodstveno obrazovanje u Sudanu ne igra svoju ulogu u poboljšanju

računovodstvene profesije u zemlji i ne može doprineti razvoju efikasnog
računovodstvenog sistema, a razlozi ya to su brojni: slabost računovodstvenih
kurikuluma koji su usvojeni na lokalnim fakultetima i univerzitetima, odsustvo vlade u
vođenju računovodstvenog obrazovanja i kontrole, zatim nedostatak stručnog kadra koji
bi bio dovoljno kvalifikovan da podučava napredne predmete radi poboljšanja
računovodstva i revizije, kao i to da računovodstveno obrazovanje priprema studente za
rutinski računovodstveni rad bez orijentacije ka kreativnom i analitičkom radu, ali i to
da nema naglaska na međunarodnim računovodstvenim i revizorskim standardima u
nastavnom programu univerziteta.

6. Kako bi se računovodstvo u Sudanu unapredilo, predložene su sledeće promene:

nastavni plan i program mora se više fokusirati na primenjive standarde računovodstva i
revizije ili praktičnu primenu nego samo na teorijska pitanja; moraju postojati
neposredni nastavni programi na nivou univerziteta kako bi se naglasila važnost
praktične primene međunarodnih računovodstvenih i revizorskih standarda. Takođe,
neophodno je podržati akademike u Sudanu kako bi bili spremni da ugrade IFRS u
računovodstveni kurikulum, te je važno obezbediti profesionalnim stručnjacima da
učestvuju u izradi sadržaja kurikuluma.

7. Mnogo je izazova sa kojima se suočavaju računovodstvene prakse u Sudanu. Neki se

odnose na slabost regulatornog okvira računovodstva, drugi na stanje računovodstvene
profesije, dok se treći odnose na stanje računovodstvenog obrazovanja.

8. Uprkos mnogim pogodnostima koje se mogu dobiti usvajanjem IFRS u Sudanu,

zemlja ga još uvek ne usvaja usled brojnih poteškoća. One se ogledaju u visokim
troškovima razvoja infrastrukture i resursa za podršku profesionalcima koji rade na
IFRS, zatim u slabosti regulatornog sistema; većina preduzeća su porodična preduzeća,a
islamske banke i druge finansijske institucije bi trebalo da slede islamske
računovodstvene standarde uprkos konvergenciji, kao i to da se IFRS zasnivaju na

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angloameričkoj misli koja nije pogodna za lokalno okruženje, te potrebi za obukom
osoblja za razumevanje i primenu IFRS i nedovoljnoj kvalifikovanosti računovođa.

9. Zbog jednostavnosti zakona i propisa i slabe opservacije u Sudanu, većina

računovodstvenih pitanja nije razmatrana ili standardizovana. Kao rezultat toga,
kompanije i računovođe mogu slobodno da praktikuju vlastita računovodstvena pravila i
standarde. Shodno tome, ne postoji specifični računovodstveni sistem, računovodstvena
pravila, standardi ili politike. U skladu s tim, raznolikost, nedoslednost i kašnjenje u
izdavanju finansijskih izveštaja glavne su odlike računovodstvene prakse u sudanskim
industrijskim kompanijama. Ova situacija je učinila mogućnost upoređivanja veoma
teškom, ako ne i nemogućom.

10. Vlada mora brzo odgovoriti unapređenjem Zakona o preduzećima iz 1925. godine, a
glavna pitanja treba da sadrže: članove u vezi sa utvrđivanjem računovodstvenih
politika, posebne zahteve i propise koji se odnose na obelodanjivanje finansijskih
izveštaja, članove koji obezbeđuju pravovremenu pripremu godišnjih finansijskih
izveštaja koji odražavaju istinit i fer uvid u poslovanje kompanija, zatim sredstva i
zakonodavstvo za nadgledanje i sankcionisanje onih koji ne ispunjavaju uslove, dodatne
zahteve u vezi sa pravilima licenciranja za kvalifikaciju revizora, jasnu listu naknada za
revizore na osnovu različitih standarda (kao što su: radno vreme, visina kapitala
kompanije) i prirodu aktivnosti kompanija i broj zaposlenih.

Područje budućih istraživanja

Rezultati ovog istraživanja ukazuju na potrebu da se ista nastave u budućnosti, a

moguća područja novih istraživanja odnose se na:

1. Studiju o mogućnosti usvajanja jedinstvenog računovodstvenog sistema u sudanskim

kompanijama

2. Više istraživanja o teškoćama koje sprječavaju usvajanje IFRS u Sudanu,

kao i

3. Razloge za razlikovanje između IFRS i AAOIFI.

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 Appendix No(7)

Biography

Mutaz Abdelrahim Abouagla Abdalla was born on March 1, 1973 in Wad Medani,
Sudan. He graduated from the Faculty of Economics and Rural Development of the
University of Gezira in Sudan in June 1999, with an average grade of 3.07 (from a
maximum of 4.00), on the basis of which he was ranked among the top five students in
Accounting and Finance. He completed his Master Degree in December 2004 as the
best student of the generation in the direction of Accounting and Finance at the
University of Gezira, where he passed all the exams with an average grade of 3.48 (of
max. 4.00). During these studies, the candidate dealt with the study Obstacles of Islamic
finance in Sudanese banks. In the academic year 2012/2013 he enrolled in the doctoral
studies in the Faculty of Economics at the University of Belgrade, Serbia. He passed all
the exams with average grade 8.78 (from a maximum 10.0)
Since 2001 the candidate has been employed as an assistant at the Faculty of Economics
and Administration of the University of Gadarif in Sudan. During his professional
career, he conducted exercises on several subjects from the field of accounting and
supervised many complementary researches for undergraduate students. In the period
from 2008 to 2011, he was authorized by the University Administration to be the Head
of Accounting and Finance Department, and as a result, he was simultaneously a
member of the Faculty Council and the University Council. He has a lot of experience
since he participated in the restructuring of curricula for B.Sc. degree for many
Faculties of Economics & Administrative Sciences in the Sudanese universities. In
addition to that he played a significant role in organizing and conducting bookkeeper
training programs along with participation in many scientific conferences.

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 Declaration of authorship

Name and surname of the author: Mutaz A. Abouagla

Index number: 3030/2012

I declare the following points about the doctoral dissertation under the title:

THE CURRENT STATE AND PERSPECTIVES ON FINANCIAL REPORTING IN

ARAB COUNTRIES-THE SUDAN AS A CASE STUDY

 The results are my own research work.

 The dissertation in whole or in part was not proposed for the acquisition of
another certificate according to study programs of other higher education
institutions.
 The results are correctly stated.
 I have not infringed on copyright or used the intellectual property of others.

In Belgrade 10/10/2017

Signature of the author

260
 Declaration on the identity of the printed and electronic version
of the doctoral dissertation

Name and surname of the author: Mutaz A. Abouagla

Index number: 3030/2012

Study program: Business Administration- Accounting

Supervisor: Vojislav Sekerez

I declare that the printed version of my doctoral dissertation is identical to the electronic
version which I handed over to storage in the digital University repository Belgrade.

I allow the publishing of my personal information regarding the academic title Doctor
of Science, such as: name and surname, year and place of birth and the date of defense
of the dissertation. These personal data can be posted on Digital Library website in
electronic catalog and publications of the University of Belgrade.

In Belgrade 10/10/2017

Signature of the author

261
 Usage declaration

I authorize the University library “Svetozar Markovic” in the Digital Repository of the
University of Belgrade to enter my doctoral dissertation under the title:

THE CURRENT STATE AND PERSPECTIVES ON FINANCIAL REPORTING IN

ARAB COUNTRIES-THE SUDAN AS A CASE STUDY

I submitted my dissertation with all the attachments in an electronic format that is

suitable for permanent use and archiving.

My doctoral dissertation is stored in the Digital Repository of University of Belgrade

and available to be used and accessed by all who respect the provisions contained in the
creative commons specific type of license. I decided:

1. Authorship (CC BY)

2. Authorship - non-commercial (CC BY-NC)

3 Authorship - non-commercial - without processing (CC BY-NC-ND)

4.3 Authorship - non-commercial - share under the same conditions (CC BY-NC-SA)
.
5. Authorship - without processing (CC BY-ND)

6. Authorship - share under the same conditions (CC BY-SA)

In Belgrade 10/10/2017

Signature of the author

262