The adoption of IASs in the Maltese accounting context : a study of the legal and practical adherence problems

Abstract

The study has two main objectives. The first objective is to establish the adherence levels of Maltese companies to IASs, in the presentation of financial statements. The second objective is to find out which factors may be associated with these adherence levels. (Those factors which may be potentially influencing such adherence levels) A random sample of 258 financial statements was taken. Six IASs were then selected as a basis on which the adherence levels were to be tested. The financial statements were examined to extract the adherence levels. After that, a set of statistical tests, using SPSS, were performed to analyse whether any associations exist between the company type/size/auditor and the adherence levels of the companies tested. From the study it emerges that although progress has been registered, the problem of low adherence levels to IASs still exists. The findings also suggest that there is an association between the type of auditor and the adherence levels of the companies analysed. The trend that emerges :from such an association is that companies audited by the relatively large audit firms are adhering well to IASs, whereas companies audited by the relatively small auditors are achieving relatively low adherence levels. Conversely no association exists between the company type/size and the adherence levels. It also emerged that the problem of poor adherence levels is only affecting small private firms. Finally, recommendations were made to reduce the number of IASs that small companies are required to adhere to, and to establish a serious enforcement and training programme in order to improve the levels of adherence to lASs