Ehab K. A. Mohamed

Accounting knowledge and skills and the challenges of a global business environment

The rapid spread and acceptance of globalization and the enormous developments in information technology, has led to dramatic changes in the business environment. These changes have brought new challenges not only to business but also to business education. Business schools that prepare future managers in different disciplines are responsible for closing the gap between the skills acquired by its graduates and the required skills by the global markets. This paper identifies the challenges facing accounting education in providing students with the knowledge and skills that raise their competency level to meet that required by the market. These challenges warrant that the competency level of accountants should be improved. Current accounting education and the skill levels of accountants are not in line with what is required in the dynamic environments of global business. A strategic plan for closing the gap between the acquired and required skills is presented to help prepare students for facing and dealing with the challenges of the new global business environment.

A survey of internet financial reporting in Oman

Purpose – The purpose of this paper is to investigate the extent and variety of practices of internet financial reporting (IFR) by companies listed on the Muscat Securities Market (MSM) in Oman. While IFR is fast becoming the norm in most western countries, there is little empirical evidence of the phenomenon in the Middle East region. This paper attempts to fill some of the gap in the literature by providing evidence of IFR practices in Oman.Design/methodology/approach – The 142 companies listed on the MSM were investigated to ascertain whether they maintain websites and/or if these sites are being used for communicating financial information.Findings – Only 84 of the listed companies were found to operate websites, with even less (only 31) engaging in IFR. However, IFR is not restricted to the publication of annual financial statements only as the companies also disclose financial highlights through their websites.Practical implications – The results of this study indicate that IFR is still at an embryo...

Internet Financial Reporting (IFR) in the GCC: extent and practices

Internet Financial Reporting (IFR) is fast becoming the norm in most western countries; however, little is known about IFR practices in developing countries. This paper investigates the extent and variety of practices of IFR by companies listed on the Muscat Securities Market (MSM) in Oman and the Bahrain Stock Exchange (BSE) in Bahrain. This paper attempts to add to the literature on IFR by providing evidence of IFR practices in Oman and Bahrain. The 142 companies listed on the MSM and 51 companies listed on the BSE are investigated to ascertain whether they maintain websites and/or if these sites are being used for communicating financial information. Only 124 of the listed companies on both markets are found to operate websites, with even less (only 63) engaging in IFR. However, IFR is not restricted to the publication of annual financial statements only as the companies also disclose financial highlights through their websites. The results of this study indicate that IFR is still at an embryonic stage in Oman and Bahrain, and there are lots of opportunities and challenges for all stakeholder parties in corporate reporting.

Management accounting and performance measurement practices in service sector in Oman

The importance of management accounting practices in measuring multidimensional aspects of performance is rapidly increasing. However, little is known about such practices in the service sector and even less is known about the practices in developing countries. This paper reports on the performance measurement practices of four Omani service organisations. More specifically, it sought to understand and explain what factors affected the design and use of multidimensional performance measurement systems in the firms studied. The results indicate the way of using the performance measures models of the companies analysed differs depending on managements views and discretion, economic and social constraints, and competition.

Optimizing business education: a strategic response to global challenges

Purpose – The purpose of this paper is to identify the challenges facing business education in providing students with the knowledge and skills that raise their competency level to meet that required by the market.Design/methodology/approach – The paper presents a framework for closing the gap between the business education delivered by universities and the current needs of the business community.Findings – There seems to be a perception that education can fix all the problems. That results in a perceived gap between what is expected from business education and what is actually provided. The rapid spread of globalization and enormous developments in information technology (IT) has led to dramatic changes in the business environment and business education needs to be responsive to these changes.Practical implications – There is a general consensus that business curricula need improvement given the considerable challenges that face businesses today including dealing with emerging globalization, new economic...

Banking policies and regulations: comparative study of Kuwait, UAE and Qatar

The major objectives of regulating the banks are to reduce the risk of failure and to achieve some desired social goals. Regulations are designed to prevent commercial banks from becoming too risky and to maintain public confidence in the countrys financial system. The economic argument for such regulation is that banking, by its very nature, is prone to market failure. In recent years, the central monetary authorities of six GCC countries have made many regulatory changes in order to achieve certain social and economic goals. The monetary authorities of GCC countries have strengthened prudential norms. Asset classification and provisioning norms have moved closer to international standards. Banks are required to maintain capital to risk weighted assets ratios of at least 8% required by the BIS. Local banks use International Accounting Standards. Overall, the Central Monetary Authorities in these countries are very proactive in terms of supervising and monitoring their regulations on banking sectors.

Auditors’ perceptions of the impact of continuous auditing on the quality of Internet reported financial information in Egypt

Purpose - – The purpose of this paper is to explore the perceptions of auditors in Egypt toward the role that continuous auditing (CA) can play in offsetting the challenges facing the quality of Internet-reported financial information. The paper also examines the impact of audit firm type and years of experience on these perceptions. Design/methodology/approach - – Ninety-six auditors working in the Big 4 and large local audit firms are surveyed to attain their perceptions on the issues examined. Chi-square, Mann–Whitney and Findings - – The overall results indicate that the majority of auditors in Egypt agree that implementing CA can offset the challenges associated with the Internet financial reporting (IFR) environment. The results also reveal that there are significant differences between auditors working in Big 4 audit firms and those working in local firms regarding the perceptions of the effect of CA on some aspects of the timeliness of information. Research limitations/implications - – The paper extends the stream of research on both CA and IFR that confirms that the widespread use of the Internet in disclosing financial information continues to be a worrisome problem for auditing firms. Practical implications - – The paper provides insights into the challenges facing auditing in the IFR environment and how implementing CA can help offset these challenges. Originality/value - – To the best of our knowledge, this paper is the first to examine issues related to CA in the IFR environment in the Middle East and, in particular, Egypt.

The implication of information technology on the audit profession in developing country: Extent of use and perceived importance

Purpose - Information technology (IT) largely affected contemporary businesses, and accordingly, it imposes challenges on the auditing profession. Several studies investigated the impact of IT, in terms of the extent of use of IT audit techniques, but very studies are available on the perceived importance of the said issue in developing countries. This study aims to explore the impact of implementing IT on the auditing profession in a developing country, namely, Egypt. Design/methodology/approach - This study uses both quantitative and qualitative data. A survey of 112 auditors, representing three of the Big 4 audit firms as well as ten local audit firms in Egypt, is used to gather preliminary data, and semi-structured interviews are conducted to gather details/qualitative-pertained information. A field-based questionnaire developed by Bierstaker and Lowe (2008) is used in this study. This questionnaire is used first in conducting a pre-test, and then, the questionnaire for testing the final results is developed based on the feedback received from the test sample. Findings - The findings of this study reveal that auditors’ perception regarding client’s IT complexity is significantly affected by the use of IT specialists and the IT expertise of the auditors. Besides, they perceive that the new audit applications’ importance and the extent of their usage are significantly affected by the IT expertise of the auditors. The results also reveal that the auditors’ perception regarding the client’s IT is not affected by the control risk assessment. However, the auditors perceive that the client’s IT is significantly affected by electronic data retention policies. The results also indicated that the auditors’ perception regarding the importance of the new audit applications is not affected by the client’s type of industry. The auditors find that the uses of audit applications as well as their IT expertise are not significantly affected by the audit firm size. However, they perceive that the client’s IT complexity as well as the extent of using IT specialists are significantly affected by the audit firm size. Research limitations/implications - This study is subject to certain limitations. First, the sample size of this research is somehow small because it is based on the convenience sampling technique, and some of the respondents were not helpful in answering the surveys distributed for this research’s purpose. This can be attributed to the fear of the competitors that their opponent may want to gather information regarding their work to be able to succeed in the competition in the market so they become reluctant to provide any information about their firm. Even some people who were interested to participate were not having enough time because the surveys were distributed during the high season of their audit work and there was limited time for the research to be accomplished. Hence, it is difficult to generalize the results among all the audit firms in Egypt because this limits the scope of the analysis, and it can be a significant obstacle in finding a trend. However, this can be an opportunity for future research. Second, the questionnaire is long and people do not have enough time to complete it. This also affected the response rate. In addition to this, the language of the questionnaire was English, so some respondents from the local audit firms were finding difficulty in understanding some sophisticated IT terms. Practical implications - This study makes some recommends/suggestions that can well be used to solve some practical problems regarding the issues concerned. This study focuses on accounting information system (AIS) training during the initial years of the auditors’ careers to help staff auditors when they become seniors to be more skilled with AIS expertise needed in today’s audit environment. Clear policy statements are important to direct employees so that IT auditors evaluate the adequacy of standards and comply with them. This study suggests increasing the use of AIS to enhance individual technical and analytical skill sets and to develop specialized teams capable of evaluating the effectiveness of computer systems during audit engagements. This study further recommends establishing Egyptian auditing standards in this electronic environment to guide the auditors while conducting their audit work. Social implications - Auditors should prioritize causes of risks and manage them with clear understanding of who receives them, how they are communicated and what action should be taken in a given community/society. So, they have to determine and evaluate all risks according to the client’s type of industry (manufacturing, non-financial services and financial). Auditors also have to continually receive feedback on the utility of continuous auditing (CA) in assessing risk. In particular, it is better for the auditor to determine how the audit results will be used in the enterprise risk management activity performed by the management. In addition, privacy has several implications to auditing, and so, it has to be reflected in the audit program and planning as well as the handling of assignment files and reports. Alike, retention of electronic evidence for a limited period of time may require the auditor to select samples several times during the audit period rather than just at year end. Originality/value - As mentioned, this study is conducted within a developing country’s context. The use and importance of IT is reality of time. However, very few studies are devoted to explore the use/importance of IT in auditing in developing countries, and thus, this study carries a significance to have better understanding about it. Moreover, knowledge of how IT is used, the related risks and the ability to use IT as a resource in the performance of audit work is essential for auditor effectiveness at all levels including developing countries.

Solar energy cost efficiency: a simulated case study in the Egyptian context

Electric energy coming from fossil fuels represents around 85% of total electricity requirements in Egypt. However, the supply of energy in the Arab world is expected to run dry in the coming 30-50 years. With the increase in energy needs, rise in fossil fuel prices, and swelling of greenhouse gas emissions, the use of renewable and more environment-friendly energy sources to supply power is gaining increased attention. Egypt has great potential in utilising solar energy to generate energy products and electricity. However, solar energy is still abandoned in Egypt due to its high costs. This paper examines the relative significance of several accounting and economic factors, such as depreciation schemes and financing options, in reducing solar energy costs. These factors are considered as a substitute for direct subsidies which are difficult to implement for various reasons. The results of the study provide a number of policy implications that can be applied to make solar energy closer to cost-competitiveness and contribute to solve the energy problem in Egypt.

Is Corporate Fundamental Analysis Transparent to Shareholders in Transitional Markets? Perspectives from Egypt

This study examines the extent to which the disclosed fundamental financial information is transparent to shareholders in Egypts stock market. The methodology employs the partial adjustment model to compare between three cases: disclosed, undisclosed and integrated fundamental financial information. The speed of adjusting market-to-book ratio can fairly be used to examine the issue of transparency. The results show that the disclosed financial information is relatively more transparent to the shareholders than the other two cases (undisclosed and integrated). Therefore, the disclosed financial information can fairly be used in the course of fundamental analysis in the Egyptian stock market.