| RELEVANCE:In recent years, the Oman
| |
| | between less than twenty and more than
|
| economy has undergone a number of
| |
| | twenty five standards disclosed by the
|
| reforms, resulting in a more
| |
| | select companies. All the select public
|
| market-oriented economy. Particularly,
| |
| | limited companies have complied with
|
| the financial impetus extended by the
| |
| | twenty to twenty five accounting
|
| Sultanate of Oman had signaled the
| |
| | standards.iii) Practices of Inventory
|
| beginning of a positive trend. The size
| |
| | Valuation: The sample companies have
|
| of Oman industry is becoming much bigger
| |
| | adopted either the lower of cost or net
|
| and the expectations of various concerned
| |
| | realisable value or moving average
|
| parties are also increasing, which can be
| |
| | methods for the inventory valuation.iv)
|
| satisfied only by good Corporate
| |
| | Practices of Preparation of Cash Flow
|
| Governance.The importance of good
| |
| | Statement: All the select companies have
|
| Corporate Governance has also been
| |
| | presented cash flow and changes in equity
|
| increasingly recognized by the industry
| |
| | statements.v) Corporate Practices of
|
| for improving the firms' competitiveness,
| |
| | Depreciation: The study revealed that the
|
| better corporate performance and better
| |
| | majority of the sample companies (90%)
|
| relationship with all stakeholders(1). In
| |
| | have followed straight line method for
|
| oman also the industries have obliged to
| |
| | the computation of depreciation and the
|
| reform their principles of Governance,
| |
| | remaining followed diminishing value
|
| for which, Oman companies will now be
| |
| | method. Further examination revealed that
|
| required to make more and more elaborate
| |
| | all sample public companies followed the
|
| disclosures than have been making
| |
| | straight line method of depreciation.vi)
|
| hitherto. This necessiates to adhere to
| |
| | Practices of Construction Contracts: The
|
| the uniform and proper accounting
| |
| | sample consists of one construction
|
| standards, as the standards reduce
| |
| | company, which has followed per cent of
|
| discretion, discrepancy and enhances not
| |
| | completion method.vii) Practices of
|
| only the degree of transparency in
| |
| | Research & Development: None of the
|
| sharing of information with the parties
| |
| | select companies has disclosed the
|
| concerned but also reinforces the broader
| |
| | expenditure on research and
|
| role the directors need to play for
| |
| | development.viii) Practices of other
|
| achieving Corporate objectives in the
| |
| | Standards: The study revealed that the
|
| midst of challenges and adversities.Here,
| |
| | accounting practices related to
|
| the Corporate Governance is a voluntary,
| |
| | fundamental errors and changes, effects
|
| ethical code of business concerned with
| |
| | of changing prices, business
|
| the morals, ethics, values, parameters,
| |
| | combinations, hyperinflationary
|
| conduct and behavior of the company and
| |
| | economies, financial statements of banks
|
| its management. The corporate
| |
| | and similar financial institutions and
|
| responsibility begins with the
| |
| | agriculture were not disclosed by any of
|
| directors who are the mind and soul of a
| |
| | the select companies as the companies are
|
| firm.The Board is expected to act as
| |
| | not concerned with such activities.From
|
| conscience-keeper of the corporate vision
| |
| | the analyses of practices and general
|
| and mission, and devise the right type of
| |
| | discussions, some of prime issues of
|
| systems for organizational effectiveness
| |
| | accounting standards in the context of
|
| and satisfaction of stakeholders. Thus,
| |
| | Oman are identified and presented here
|
| the Corporate Governance is a system of
| |
| | under in brief.ISSUES:i) Disclosure of
|
| accountability primarily directed towards
| |
| | Accounting Policies is followed by most
|
| the shareholders in addition to
| |
| | of the sample companies, since it is
|
| maximizing the shareholders' welfare(2),
| |
| | mandatory. The items stated under
|
| where the debate on disclosure/
| |
| | accounting policies or notes are more or
|
| transparency issues of Corporate
| |
| | less same in all the concerns selected
|
| Governance eventually centres around the
| |
| | for the study, but the treatment of some
|
| proper accounting standards and their
| |
| | items were not similar to the other
|
| practices and issues, as the application
| |
| | concerns.The requirement of the
|
| of accounting standards give a lot of
| |
| | disclosure standard is only to disclose
|
| confidence to the corporate management
| |
| | the material facts, what is the material
|
| and make the disclosure more effective
| |
| | or immaterial it would be decided by the
|
| and ensure the good Corporate Governance
| |
| | organization, where the influence of
|
| to promote a healthy investment
| |
| | personal judgement is expected in the
|
| climate.Thus, the study of practices of
| |
| | absence of concrete guidelines.
|
| accounting standards is an important and
| |
| | Therefore, the existence of the standard
|
| relevant issue of good Corporate
| |
| | is doubtful.ii) In few accounting
|
| Governance in the present environment, as
| |
| | standards, such as, valuation of
|
| the standards are viewed as a technical
| |
| | inventories and depreciation accounting,
|
| response to call for better financial
| |
| | the alternative accounting treatment is
|
| accounting and reporting; or as a
| |
| | allowed. This kind of flexibility creates
|
| reflection of a society's changing
| |
| | problems in judging the quality and
|
| expectations of corporate behavior and a
| |
| | reliability of financial statements of an
|
| vehicle in social and political
| |
| | enterprise and the different methods are
|
| monitoring and control of the
| |
| | followed for different companies or for
|
| enterprise(3).STUDY:The old ways of
| |
| | different periods, the possibility of
|
| selective and conservative reporting is
| |
| | inter-unit, intra-industry or
|
| yielding place to more transparent and
| |
| | inter-period comparison is impaired. The
|
| voluntary disclosures, in tune with the
| |
| | lack of comparability renders the
|
| changing times. There is no alternative
| |
| | financial information less useful and
|
| to adopting by the corporate entities of
| |
| | creates confusion in the minds of the
|
| new standards of accountability, where
| |
| | investing public.iii) In case of
|
| the accountability is largely a matter of
| |
| | construction contracts, the standard
|
| disclosure, of transparency, of
| |
| | provides for adoption of either completed
|
| explaining a company's activities to
| |
| | contract method or percentage of
|
| those to whom the company has
| |
| | completion method for recognition of
|
| responsibilities(4) i.e. the disclosure
| |
| | profit on completed contract, which
|
| in simple, understandable and comparable
| |
| | attracts the same limitation of
|
| form, forms clearly the basis for
| |
| | comparability.iv) The hybrid method of
|
| accountability, which can be provided
| |
| | accounting i.e. accounting for income on
|
| only if companies adopt uniform
| |
| | cash basis and expenditure on accrual
|
| accounting policies and disclose adequate
| |
| | (mercantile basis), followed by
|
| information about the accounting
| |
| | corporates, conveniently allows them to
|
| standards followed. Thus, accounting
| |
| | manipulate their reports.v) The standards
|
| standards ensure the comprehensive
| |
| | setting process is closed and narrow and
|
| disclosure of the corporate's
| |
| | the execution is unsound , that causes
|
| accountability, which may be regarded as
| |
| | the various practices and imperfect
|
| a prime issue and a pre requisite for
| |
| | disclosure, which defeats the prime
|
| good Corporate Governance.An examination
| |
| | objective of accounting standards in
|
| of practices of accounting standards, and
| |
| | achieving the good Corporate
|
| their issues in Oman industry may help to
| |
| | Governance.vi) The adoption of IAS in
|
| understand the existing practices of
| |
| | toto without looking into their relevance
|
| accounting standards, which in turn help
| |
| | in the context of Oman industrial
|
| in designing the effective standard
| |
| | environment, lacks the focus on the
|
| practices so as to ensure good Corporate
| |
| | domestic problems and indigenisation.The
|
| Governance leading to a healthy
| |
| | following suggestion are made on the
|
| investment environment.In this context,
| |
| | basis of discussions with the corporates
|
| an attempt is made here to examine the
| |
| | to solve the above issues and to improve
|
| accounting standards and their practices
| |
| | the utility of accounting standards for
|
| in Oman, with a view to strengthen the
| |
| | ensuring good Corporate
|
| accounting standards and improve their
| |
| | Governance.SUGGESTIONS:i) The most
|
| practices for good Corporate Governance.
| |
| | important suggestion for strengthening
|
| The data for the study are obtained from
| |
| | the accounting standards to improve the
|
| the annual reports (published during
| |
| | quality reporting thus Corporate
|
| 2001-'02) of ten Omani companies of
| |
| | Governance values, is focusing on the
|
| different nature, selected from the top
| |
| | local conditions, improving the relevance
|
| companies in terms of assets. The sample
| |
| | i.e. indigenisation of accounting
|
| consisted of 6 private and 4 public
| |
| | standards to make the standards more
|
| companies. The simple per centage method
| |
| | suitable or appropriate to the existing
|
| is used to analyze the data. The
| |
| | industrial phenomenon in Oman.ii) The
|
| authenticity of the data is verified with
| |
| | Capital Market Authority in Oman in
|
| the opinions of management, who are aware
| |
| | consultation with other professionals and
|
| of the company affairs and Corporate
| |
| | regulatory bodies should evolve some
|
| Governance. The corporates' perceptions
| |
| | mechanism to limit the scope of
|
| on the relevance of accounting standards
| |
| | alternative methods available within an
|
| for good Corporate Governance in the
| |
| | accounting standard. Thus,the use of
|
| context of Oman are also
| |
| | uniform accounting standards would
|
| examined.STANDARDS IN OMAN:In any
| |
| | enhance the qualitative and comparability
|
| country, the awareness and
| |
| | dimensions of financial statement and
|
| competitiveness among the corporates
| |
| | reporting.iii) The establishment of
|
| would be strengthened when they
| |
| | harmony among the applicable laws like
|
| understand each other and compare their
| |
| | Companies Act, Income Tax Act, Banking
|
| performance, for which the simple,
| |
| | Regulations etc., which have significant
|
| understandable and comparable disclosure
| |
| | bearing on different items of financial
|
| is an important instrument. The main
| |
| | statements, would give true and fair view
|
| objective of disclosure would be
| |
| | of business.iv) The formulation of
|
| fulfilled and the utility of the
| |
| | comprehensive and indigeneous standards,
|
| disclosure towards good Corporate
| |
| | like accounting for changes in prices,
|
| Governance would be improved when the
| |
| | inflationary economies, segment
|
| disclosure is done on the basis of
| |
| | accounting, accounting for joint
|
| uniform and consistent accounting
| |
| | ventures, earning per share, investment
|
| standards. Thus, the development and the
| |
| | in subsidiaries, associates etc., useful
|
| practice of uniform accounting standards
| |
| | to make accounting standards more user
|
| has become an essential ingredient of
| |
| | friendly and international acceptable.To
|
| Corporate Governance and the various
| |
| | sum up, though the entire industrial
|
| bodies have been contributing their
| |
| | community in Oman has been following the
|
| wisdom to strengthen the standards to
| |
| | International Accounting Standards and
|
| make the Corporate Governance more
| |
| | adopting disclosure practices to ensure
|
| effective in the context of the changing
| |
| | true and fair view of the economic
|
| corporate environment. The corporate
| |
| | activities, still a lot more needs to be
|
| management is also now feeling the
| |
| | done to promote good corporate governance
|
| pressure for reforming accounting
| |
| | and a healthy investment climate. The
|
| practices and level of transparency
| |
| | other middle east countries, which adopt
|
| emanating from alert lenders, regulatory
| |
| | the policy of liberalization and intend
|
| agencies, financial analysts and above
| |
| | to increase in international capital
|
| all, board of directors who realize that
| |
| | market activities due to globalization
|
| it is the quality of information which
| |
| | should learn that reducing the variety of
|
| will determine how efficiently they have
| |
| | approaches in the each accounting
|
| discharged their responsibilities towards
| |
| | standards, formulating the comprehensive
|
| the good Corporate Governance.In Oman,
| |
| | and indigeneous standards and making all
|
| though the financial statements have been
| |
| | accounting standards as mandatory have to
|
| prepared in accordance with International
| |
| | be given top priority for attaining the
|
| Accounting standards issued by the
| |
| | required objectives, otherwise it will be
|
| International Accounting Standards
| |
| | exceedingly difficult for Oman investors
|
| Committee (IASC), interpretations issued
| |
| | to trust the Corporate
|
| by the Standing Interpretation Committee
| |
| | Governance.******************************
|
| of the IASC and the requirements of the
| |
| | *******************************
|
| Commercial Companies Law of the Sultanate
| |
| | * The article is presented in
|
| of Oman and the disclosure requirements
| |
| | Accounting, Commerce & Finance: The
|
| set out in the rules for disclosure
| |
| | Islamic Perspective International
|
| issued by the Capital Market Authority of
| |
| | Conference V, held in Brisbane, Australia
|
| the Sultanate of Oman, the disclosure is
| |
| | during 15-17, June 2004.REFERENCES:1.
|
| inadequate and is a negative phenomenon
| |
| | Tiwary, Ojha, Arun Kumar, "Corporate
|
| to a country which wishes to be
| |
| | Governance in India: What it Means and
|
| strengthened further, because it cannot
| |
| | What it needs?", The Indian Journal of
|
| hope to tap the GDR market with
| |
| | Commerce, New Delhi, Oct-Dec,1998,
|
| inadequate financial disclosures, since
| |
| | p.154.2. Chandratre, KR, "Role of Board
|
| the more transparent activities of a
| |
| | of Directors in Emerging Dimensions of
|
| company governed by the proper accounting
| |
| | Corporate Governance and Impending
|
| standards, the more accurately will its
| |
| | Changes in Company Law, The Chartered
|
| securities be valued(5).The International
| |
| | Secretary, The Institute of Chartered
|
| Accounting Standards followed in Oman
| |
| | Secretary of India, New Delhi, May 97,
|
| industry are Presentation of Financial
| |
| | p. 505.3. R.I.Ticker, "Corporate
|
| Statements (IAS 1); Inventories (IAS 2);
| |
| | Responsibility, Institutional Governance
|
| Cash Flow Statements (IAS 7); Net Profit
| |
| | and the Roles of Accounting Standards" in
|
| or Loss for the period (IAS 8);
| |
| | Michael Bromwich and Anthony G. Hopwood
|
| Fundamental Errors & Changes in
| |
| | (Eds.), Accounting Standards Setting, An
|
| Accounting policies (IAS 9); Events After
| |
| | International Perspective, Pitman Books
|
| the Balancesheet Date (IAS 10);
| |
| | Ltd., London, 1883, p.27., Cited in Lele
|
| Construction Contracts (IAS 11); Income
| |
| | RK, Jawahar Lal, "Accounting Theory",
|
| Taxes (IAS 12); Segment Reporting (IAS
| |
| | Himalaya Publishing House, New Delhi,
|
| 14); Effects of Changing Prices (IAS 15);
| |
| | 96,p.56.4. Sir Adrian Cadbury,
|
| Property, Plant and Equipment (IAS 16);
| |
| | "Developments in Corporate Governance",
|
| Leases (IAS 17); Revenue (IAS 18);
| |
| | The Company Secretary, The Institute of
|
| Employment Benefits (IAS 19); Accounting
| |
| | Chartered Secretary of India, New Delhi,
|
| for Govt. Grants & Govt. Assistance (IAS
| |
| | May 97, p. 497.5. The Report of the
|
| 20); Effects of Changes in Foreign
| |
| | Cadbury Committee on "Financial Aspects
|
| Exchange Rates (IAS 21); Business
| |
| | of Corporate Governance", The Company
|
| Combinations (IAS 22); Borrowing Costs
| |
| | Secretary, The Institute of Chartered
|
| (IAS 23); Related Party Disclosures (IAS
| |
| | Secretary of India, New Delhi, May 97,
|
| 24); Retirement Benefit Plans (IAS 26);
| |
| | p. 573.6. Verma, Garg, Singh, "Disclosure
|
| Consolidated Financial Statements (IAS
| |
| | of Accounting Standards Vis-à-vis
|
| 27); Investments in Associates (IAS 28),
| |
| | Company Characteristics: A Study of
|
| Hyperinflationary Economies (IAS 29);
| |
| | Indian Corporate Sector", The Indian
|
| Banks & Similar Financial Institutions
| |
| | Journal of Commerce, New Delhi,
|
| (IAS 30); Interests in Joint Ventures
| |
| | Oct-Dec,1998,
|
| (IAS 31); Financial Instruments:
| |
| | p.131.***********************************
|
| Disclosure & Presentation (IAS 32);
| |
| | ****************************BIOGRAPHICAL
|
| Earnings Per Share (IAS 33); Interim
| |
| | DETAILS OF AUTHORS:Dr.K.Shankaraiah,
|
| Financial Reporting (IAS 34);
| |
| | Assistant Professor in Accounting
|
| Discontinuing Operations (IAS 35);
| |
| | & D.N.Rao, Lecturer in Finance
|
| Impairment of Assets (IAS 36);
| |
| | College of Commerce & Economics, Sultan
|
| Provisions, Contingent Liabilities &
| |
| | Qaboos University, PB 20, PC 123, Al
|
| Assets (IAS 37); Intangible Assets (IAS
| |
| | Khod, Muscat, Sultanate of Oman.1.
|
| 38); Financial Instruments: Recognition &
| |
| | Dr.K.Shankaraiah:
|
| Measurement (IAS 39); Investment Property
| |
| | A Senior Associate Professor of Commerce
|
| (IAS 40); Agriculture (IAS 41).Though the
| |
| | in Osmania University, Hyderabad, Andhra
|
| Oman industry has been following all the
| |
| | Pradesh, India with 18 years of teaching
|
| International Accounting Standards, in
| |
| | and research experience.
|
| practice, some of them are not free from
| |
| | Working as Assistant Professor in
|
| criticism due to certain inherent
| |
| | Accounting in College of Commerce &
|
| weaknesses. The practices of these
| |
| | Economics, Sultan Qaboos University,
|
| standards in the Oman industries and the
| |
| | Sultanate of Oman.
|
| gaps are discussed in what follows with a
| |
| | Worked as Accounting Section Head in the
|
| view to strengthen them for ensuring the
| |
| | Department of Business Management of
|
| good Corporate Governance.PRACTICES:The
| |
| | Bahrain Training Institute, Ministry of
|
| primary and secondary data collected from
| |
| | Labour & Social Affairs, Kingdom of
|
| the select companies are carefully
| |
| | Bahrain.
|
| examined to find the extent of compliance
| |
| | Participated in various national and
|
| with the accounting standards and issues
| |
| | intenational seminars.
|
| in corporate practices. Some of the
| |
| | Published about 30 articles in various
|
| important findings are as follows:i)
| |
| | journals of national and international
|
| Perceptions on the relevance of
| |
| | repute.
|
| Accounting Standards for Corporate
| |
| | Written books and developed course
|
| Governance: Except one sample of private
| |
| | materials for academecians, researchers
|
| companies which has not disclosed its
| |
| | and tudents.
|
| opinion, all others (90% of the sample)
| |
| | Areas of specialisation are accounting
|
| have expressed the accounting standards
| |
| | and finance.
|
| as more relevant for Corporate
| |
| | Undertaken various research projects and
|
| Governance.ii) Practices of Accounting
| |
| | providing guidance to Ph.D. research
|
| Policies Disclosed in Annual Reports: The
| |
| | scholars.
|
| majority of the sample companies (80%)
| |
| | Member and Resource person of various
|
| disclosed twenty to twenty five policies
| |
| | academic and professional bodies.2. D.N.
|
| and the remaining is equally distributed
| |
| |
|
