24
ALRAQABA . ISSUE 16
Practical Problems in Applying the
International Standards
Due to the changes that have occurred in the world, such as globalization, global trade liberalization,
information technology, andother changes, it has become necessary to unify audit, review, andaccounting
standards to organize and facilitate financial and accounting work between countries. Therefore, the
international standards that were issued by the International Federation of Accountants are considered
the basis for this standardization. The International Federation of Accountants issued a set of standards
represented in guidelines, concepts, and procedures to help auditors and accountants to perform their
work skillfully and accomplish their tasks efficiently with high quality. In light of the countries’ adoption of
such standards, they face many problems and constraints. The following are the most important:
Amal Hamad Al Ajmi
Services and Social Affairs Audit Sector-Ministries.
1. Resisting change by human nature, as individuals
tend to prefer stability. Resistance to change is
one of the biggest problems faced by institutions
that convert to applying international standards.
Therefore, the senior management of the institution
must consider convincing staff members about
the transformation process and encourage the
adoption of changes instead of resisting them.
2. Islamic culture has a great influence in the
field of public accounting. In the doctrines
of Islamic finance, interest is not calculated
on loans due to the prohibition of the fixed
rate of return. To cope with these cultural
influences, a set of financial transactions were
developed to comply with Islamic legislation,
such as alternatives to traditional commercial
mortgage arrangements and new ways of
financing interest-free businesses.
3. Significant increase in the level of disclosures
is required in the clarification that complements
the financial statements when changing the
international financial reporting standards.
4. The scarcity of professionally and practically
qualified human resources with sufficient
knowledge of international standards that can
properly apply the international accounting
standards. Many users of international
standards do not deal with such standards
comprehensively, but they rather deal with
them partially and according to their needs.
5. The necessity to amend the institution’s
financial and accounting system to meet the
requirements to apply international accounting
standards when adopting them.
6. Translate the standards into the national
language while maintaining the original
meaning. The international standards’ official
version is written in English, and it is translated
into Arabic. The translated version of the
standards cannot be a reliable reference
because they are not endorsed by the body
that issued them.
7. The successive developments witnessed by
international standards, whichmagnifies the need
for the use of professional accounting offices to
help the financial business entities to apply them.
8. Methods to address the differences that occur
between the local and the international accounting
standards when applying various accounting
applications. In addition to the inconvenience of
some standards to local conditions.
9. Some international standards are general
and do not consider the specification of each
country. They cover cases of an international
character that most countries need and do not
consider a specific case that meets the need
for a specific country or a limited group of
countries.
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