Research Journal of Finance and Accounting ISSN 2222-1697 !a"er# ISSN 2222-2$%7 &nline# 'ol.%( No.

2( 2)1*

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The Impact of the Development the International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA) on the Tax Legislation in the Jordan
+r. Adel , -atawneh Al-.a/toonah 0ni1ersit/ of Jordan( A22an 3 Jordan A stract4 5his stud/ is to highlight the i2"act of the de1elo"ing the International Financial Re"orting Standards IFRS# and International Standards on Auditing ISA# on the 5a6 7egislation in the Jordan 5his stud/ found that there is a statistical e1idence of the IFRS on the ta6 legislations( with the "resence of so2e wea8 i2"act fro2 the "oint of 1iew of the stud/ sa2"le related to the fair 1alue and the e6tent of its use in the in1est2ents( assets( and the financial instru2ents. And there is no i2"act with statistical e1idence of the e6ternal auditing standards on the ta6 legislations( with the "resence of so2e difficulties related to the e1aluations and the future 1alues which necessitate the e6ternal auditor to ta8e the2 into consideration during the e6ternal audit. 5he stud/ reco22ended that is 1er/ i2"ortant to understand the necessit/ of the awareness for e6ternal auditors with what9s related to the i2"ortance of the 2ost con1enient "lanning and the i2"ortance of anal/tical re1ision in e6ternal auditing acti1ities with what corres"onds with the goals on which e6ternal auditing has :een used in order to achie1e har2on/ :etween IFRS and ta6 legislations. 5he necessit/ of awareness for accountants and e6ternal auditors with the i2"ortance of the fair 1alue and its i2"act on financial data and infor2ation through showing the financial data ris8s that are related to the a""lication of the fair 1alue and its i2"act on re"orting financial re"orts and the accounting ac8nowledge2ent of financial data. 5he stud/ also reco22ended to Increasing the coordination and colla:oration :etween the legal association of accountants and the inco2e and sales ta6 de"art2ent for the "ur"oses of standing on all the o:stacles that occur without the acce"tance of all the certified accounts fro2 e6ternal auditors in the "atrol and without auditing fro2 the IS5+. !e" #ords$ IFRS% ISA% ISTD% J&RDA' Introduction 5he ;orld Financial <risis in 2))$ is considered to :e one of the worst financial crises that i2"acted the world significantl/ after the ;orld ;ar II. ;ith the increase in da2age that was caused :/ this crisis in a nu2:er of facilities( that are large( 2ediu2 or s2all( and in a nu2:er of different econo2ies( se1eral =uestions were addressed4>what are the reasons that lead to the occurrence of the ;orld Financial <risis?>( >+id the ;orld Financial <risis lead to the de1elo"2ent in the financial re"orting standards and e6ternal auditing?>( and >+id the ta6 legislation in the 8ingdo2 get affected :/ these changes?> Se1eral s"ecialists and researchers "ointed out to se1eral econo2ical and financial issues fro2 se1eral countries and showed that there are a nu2:er of reasons that lead to the ;orld Financial <risis@ so2e related the cause to 2oral reasons( others related the cause to 2anagerial and insurance issues( and others saw that accounting and auditing "la/ an i2"ortant role in relation to the occurrence of the ;orld Financial <risis. &n the other hand( there were a nu2:er of =uestions regarding the role of accounting and auditing in relation to the occurrence of the ;orld Financial <risis and the 2ain =uestion on hand was 4>+id the changes that acco2"anied financial re"orting and the 2ethods of "resentation( "re"aration( and 2easuring in the shadow of the financial re"orting standards IFRS# after the ;orld Financial <risis ha1e an i2"act on ta6 legislations s"ecificall/ in what9s related to the legal inco2e and sales ta6es( in which each of the new laws ha1e :een acti1ated since the start of 2)1). 5he Jordanian econo2/ is considered to :e one of the s2allest econo2ies and suffered fro2 a s2all i2"act after the ;orld Financial <risis in relation to other econo2ies in other countries in the world. Aowe1er( the i2"act that was generated fro2 the ;orld Financial <risis re=uired the su""ort of se1eral areas that were related to Jordan to stud/ what is ha""ening around it to reduce the i2"act to the lowest "ossi:le and to a1oid what can :e a1oided( in which the countr/ has tried hard to "rotect the "rice of Jordanian +inar and the Financial( In1est2ent( and Ban8ing sectors. 5he/ also ai2ed to contain all the inflationar/ "ressures to fund the ina:ilit/ in the current account for the :alance of "a/2ents.

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Research Journal of Finance and Accounting ISSN 2222-1697 !a"er# ISSN 2222-2$%7 &nline# 'ol.%( No.2( 2)1*

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5he <entral Ban8 of Jordan has "ointed out instructions se1eral ti2es since the occurrence of the ;orld Financial <risis that the :an8 has wor8ed on re"orting a grou" of wide financial instructions and nonfinancial instructions( which re=uires dra2atic changes in its structure and content( to :eco2e 2ore con1enient( less co2"licated( and 2ore concentrated in order to e2"hasi.e the role of financial 2ar8ets( and to "ro1ide sufficient re"orts with credi:ilit/( and high =ualit/ to "rotect the "u:lic interest and the rights of owners and related "arties.

The pro lem$ 5he "ro:le2 of this stud/ can :e "resented through the following =uestions4 1# Are there 1aria:les with statistical e1idence that are related to the de1elo"2ents and changes in the international financial re"orting standards IFRS# that i2"acted the ta6 legislations in the 8ingdo2? 2# Are there 1aria:les with statistical e1idence that are related to the de1elo"2ents and changes in the international standards on auditing ISA# that i2"acted the ta6 legislations in the 8ingdo2? The o (ective$ 5he stud/ ai2s to achie1e the following4 1# ,easuring the e6tent of e6istence of i2"act caused :/ the financial re"orting standards IFRS# on the ta6 legislations in Jordan. 2# ,easuring the e6tent of e6istence of i2"act caused :/ the e6ternal auditing ISA# on the ta6 legislations. The importance$ 5he i2"ortance of this stud/ is :ased on the i2"ortance of the to"ic it 2edicates in which it ai2s to show the e6tent of the i2"act e6istence to de1elo" the financial re"orting standards and e6ternal auditing in the ta6 legislations and thatCs fro2 the "oint of 1iew of cor"orations that are registered in A22an9s Stoc8 D6change as fro2 1E1E2)12. Literature Revie) ;e cannot discuss the i2"act of the de1elo"ing of the international financial re"orting standards IFRS# and the international standards on auditing on the ta6 legislation in Jordan without e6a2ining 1arious factors that deter2ine accounting rule in the societ/. In this literature re1iew( we are going to e6a2ine and re1iew 1arious 1iews of researchers of e1er/ related conce"t to this to"ic of discussion. Adhi8ari and 5ond8ar 1992# "osit that@ >Accounting re"orting and disclosure standards and "ractices do not de1elo" in a 1acuu2 :ut reflect the "articular en1iron2ent in which the/ are de1elo"ed> 5his i2"lies that Accounting "rocesses and "rocedures are conditioned :/ :oth en1iron2ental and historical factors :ut also :/ the le1el of the societ/ accounting and econo2ic de1elo"2ent. 5herefore( ado"ting accounting as a language of a :usiness 2ust :e clear and well understood to 2eet the need of the users in e1er/ in1est2ent decisions. A nation that has unsta:le econo2/ and econo2/ forecast are "rone to =uestiona:le accounting "ractices as a result of so2e of its drastic changes while on the order hand a consistent and sta:le econo2/ will "ro2ote a sound conce"tual accounting s/ste2 and standards. ,ee8 F Saudagaran( 199)#@ Gernon F ,ee8( 2))1#. I=:al 2))2# are of the o"inions that the >degree of econo2ic ris8 e6"osure to the in1estors and creditors in a countr/ is directl/ related to the degree of econo2ic insta:ilit/ of the countr/.> A countr/9s le1el of inflation is another deter2inant that sha"es accounting s/ste2s and causes accounting di1ersit/@ in 2ost countries( the historical cost conce"t is used for initiall/ recording transactions. In ti2es of generall/ rising "rices( inflation e6erts an enor2ous "ressure on historical cost accounting and attracts a great deal of attention in re"orting the effects of changing "rices as it ha""ened in the late 2)th centur/ in the 0.S. and the 0.H. I=:al( 2))2@ Saudagaran( 2))%#. An Drnst F Ioung sur1e/ of the Glo:al 1))) co2"anies I=:al( 2))2# argued that "olitical s/ste2 and "hiloso"h/ has direct relationshi" with econo2ic s/ste2( the sta:ilit/ of :oth are direct de"enda:le and that if econo2ic sta:ilit/ aids de1elo"2ent of accounting s/ste2 and standards in the sa2e 1ein therefore( "olitical sta:ilit/ re2ains a facilitating factor for de1elo"ing accounting standards . I=:al 2))2# "osits >the "olitical insta:ilit/ of a countr/ is often a result of the deterioration of econo2ic conditions. 5he de1elo"2ent of a co2"rehensi1e and so"histicated accounting s/ste2 is difficult under such a set of circu2stances.> $1

Research Journal of Finance and Accounting ISSN 2222-1697 !a"er# ISSN 2222-2$%7 &nline# 'ol.%( No.2( 2)1*

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7egal s/ste2 is another 1ital factor that e6"lains the di1ersit/ in accounting re"orting and standards. In so2e countries( the setting of accounting standard are the res"onsi:ilit/ entrusted in the "ri1ate sector. Gernon and ,ee8 2))1# further e6"lained the dichoto2i.ation of the accounting world into the following@ so2e countries are with a code-law orientation such as continental Duro"e and South A2erica( while so2e are :ased on co22on-law orientation such as the 0nited Hingdo2 and the 0nited States of A2erica. Saudagaran 2))%# argued that the =ualit/ of education "la/s an i2"ortant role in the ado"tion of accounting standards. Ae further "osits that there is a direct relationshi" :etween the le1el of econo2ic de1elo"2ent and the =ualit/ of accounting education of countr/( also that :oth the "olitical and econo2ic relationshi" with other countr/ are e=ual the function its accounting education which in turn :oost the re"utation of that countr/9s accounting "rofession. <ulture also "la/s an i2"ortant role in the de1elo"2ent of an accounting s/ste2@ Aofstede 19$)# defined culture as >the collecti1e "rogra22ing of the 2ind which distinguishes the 2e2:ers of one hu2an grou" fro2 another.> <ulture in general is a 1er/ difficult construct to define and 2easure. D=uall/ difficult is the relationshi" :etween cultural factors and accounting de1elo"2ent. Se1eral studies conducted :/ Aofstede 19$)#( and Gra/ 19$$# ha1e sought to e6a2ine such a lin8 using traditional constructs of indi1idualis2 1ersus collecti1is2( large 1ersus s2all "ower distance( strong 1ersus wea8 uncertaint/ a1oidance( 2asculinit/ 1ersus fe2ininit/( and <onfucian d/na2is2. Gra/ 19$$# identified the four accounting 1alues of >"rofessionalis2( unifor2it/( conser1atis2( and secrec/> and argued that these 1alues interact with the institutional conse=uences of culture such as ca"ital 2ar8ets in order to ha1e a final set of accounting s/ste2s that include financial accounting re"orting "ractices and "rofessional structure. 7anguage also has a cultural i2"act on accounting di1ersit/. !ierera 199%# su""orted the idea raised :/ Gerhard G. ,ueller that accounting see2s to flourish in Dnglish s"ea8ing countries and languish in others( "articularl/ Ro2ance language countries. Aowe1er( as with 2ost ele2ents of culture( it should :e noted that language is not a causal factor "er se :ut a correlate of other factors too. Saudagaran F ,ee8( 1997#. *"pothesis$ 5his stud/ will :e :ased on the following h/"otheses4 1# 5here is an i2"act with statistical e1idence for the financial re"orting standards IFRS# on the ta6 legislations. 2# 5here is an i2"act with statistical e1idence for the e6ternal auditing ISA# on the ta6 legislations. +ethodolog"$ 5he researcher de"ended on the descri"ti1e and anal/tical 2ethodolog/ to attain the secondar/ data( and on scanning a grou" of resources and :oo8s and "atrols that are related to the stud/. +e1elo"2ents were 2ade on the in=uiries through the awareness on a nu2:er of "re1ious studies and "erfor2ing "ersonal inter1iews with a nu2:er of financial 2anagers and e2"lo/ees in insurance issues( and on a nu2:er of legal auditors. The societ" and sample of the stud"$ 5he societ/ and sa2"le of stud/ consists of all of the financial cor"oration9s which are registered in A22an9s Stoc8 D6change at 1E1E2)12 in which it included all the co2"anies in the :an8ing( insurance( co22ercial and the financial ser1ices sectors. 5his sector is highl/ sensiti1e to the financial re"orting standards and ta6 legislations due to the constant increase in the a1erage i2"osed ta6es on these sectors. The theoretical frame)or,$ 5he ;orld Financial <risis is considered to :e one of the 2ost significant challenges faced :/ the world and it can :e said that the A2erican econo2/ was the initial causer for the occurrence of the ;orld Financial <risis. 5he A2erican econo2/ was followed :/ se1eral econo2ies in the rest of the world and it was further followed :/ a nu2:er of "lans and "roJects to sa1e the world financial s/ste2 and the inter1ention of world leaders to reduce the i2"act of the crisis. 5he A2erican "resident has interfered :/ signing on the "roJect of A2erican law of sa1ing the financial A2erican s/ste2 in 2))9. 5he 7eh2an Brothers Ban8 is considered to :e one of the largest 1icti2s of the world crisis which announced its :an8ru"tc/ on 1KE9E2))$ which lead to the significant inflation of the financial crisis. &n the accounting side of the occurrence of the ;orld Financial <risis( se1eral s"ecialists see that the a""lication of the A2erican accounting standards 1K7 International Accounting Standards *9# which is a:out the fair 1alue is $2

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considered to :e one of the 2ost i2"ortant reasons that lead to the occurrence of the world financial crisis es"eciall/ with the "resence of dou:ts a:out the 2isuse of the standards. Fro2 there( se1eral articles ha1e included the rescuing "lan which included two "arts 1*2 and 1** which are related to the fair 1alue. Article 1*2 re=uires that the SD< should stall the a""lication of the standard 1K7 for an/ cor"oration re"orting financial state2ents@ if the SD< sees that :rings "u:lic :enefit and "rotects in1estors. Based on article 1**( the SD< has 2ade a well- de1elo"ed stud/ a:out the accounting standards related to the fair 1alue in which it included a =uestionnaire after the standards on the :alance of the financial cor"orations( :ased on this accounting 2ethod on :an8s which :an8ru"ted in 2))$. &n the other hand( there were se1eral su""orters that defended the standard of fair 1alue through noticing that sto""ing the fair 1alue standard is not in fa1or of the ca"ital 2ar8ets (and that it would deteriorate the financial re"orting in which there would :e less trans"arenc/ and the a:ilit/ of co2"arison would wea8en. Aence( it would wea8en the trust of in1estors in the ca"ital 2ar8ets and the fair 1alue and the international accounting standards will ai2 to co22unicate with in1estors and therefore it is not in the interest that is related to the ;orld Financial <risis. &n the D0 le1el and on the :asis of a s"ecial in=uir/ that was "re"ared :/ a grou" of financial s"ecialists and the results that were sent to the French "resident to infor2 hi2 with the adJust2ents that were 2ade to the accounting standards related to the fair 1alue( a reduction in the in1estors trust in the Duro"ean :an8ing s/ste2 which won9t i2"ro1e the sustaina:ilit/ of the 2ar8et and the standards that ha1e :een de1elo"ed in order to su""l/ the users of financial data with an honest e6"ression a:out the truth and that the "olitical changes related to the standards will reduce the trans"arenc/( du"licate the acce"ta:le accounting standards worldwide and therefore the co22it2ent to such standards and what acco2"anies it fro2 sufficient e6"lanations would allow the in1est2ent s"ecialists to e1aluate the financial safet/ of cor"orations and the con1incing circu2stance on financial "erfor2ance won9t sol1e the issue. )n contrar/( a nu2:er of s"ecialists ha1e disco1ered the association of co2"anies that are listed in the financial 2ar8et to 2islead its in1estors and the users of its financial state2ent through their irregularities of the 8nown accounting standards through the re"lacea:le accounting standards and the fle6i:ilit/ that is offered :/ the International Accounting Standards( de2anding at the sa2e ti2e the financial 2ar8et to strictl/ o:Ject these illegal acts. So2e s"ecialists 2entioned the e6"loitation of the fle6i:ilit/ in the in1est2ent standards( for e6a2"le the act of certain facilities to transfer its in1est2ents fro2 :eing a1aila:le into :eing intended for trading and the o""osite for the transfer of the financial i2"act for its results on the inco2e state2ent and the state2ent of financial "osition and there:/ affecting the net "rofit or net loss#.&ne of the e6a2"les in which the accounting "ractices are not isolated fro2 the ;orld Financial <risis. <ertain financial s"ecialists figured that the fle6i:ilit/ in accounting standards result fro2 the nu2erous wa/ of accounting 2easures for financial acts and its e1aluations for e6a2"le ( a financial "roduct offered :/ a co2"an/ that is not traded in the 2ar8et which 2eans the a:sence of a fair 2ar8et 1alue. In this case( the auditor "ursues to acce"t the e1aluation of the co2"an/ for the "rice of such a "roduct and thatCs on contrar/ to the standards that re=uires the e1aluation to :e re"orted fro2 a neutral side which generates a conflict of interest and leads to e6ternal auditing and the i2"ortance of e6ternal auditing related to the ;orld Financial <risis. &thers ha1e seen that the ;orld Financial <risis ha1e clearl/ focused its i2"act on the financial co2"onents that consists of the future e1aluation such as the in1est2ent articles and creditors. ,oreo1er( others ha1e related the occurrence of the ;orld Financial <risis to "oliticians that 2a8e the econo2ical decisions and "resent solutions to 2oti1ate econo2ical solutions. Regarding the econo2ical conflicts :etween countries and the transfer of the Financial <risis i2"act fro2 another countr/( there is no wa/ to e1aluate this conflict :ut the =uestion re2aining on hand in the ,iddle Dast a:out the negati1e i2"act on the world countries and the Ara:ic countries recei1ing negati1e i2"acts fro2 the crisis of A2erican rental loans s"eciall/ fro2 the negati1e i2"acts on countries that are not 1er/ in1ol1ed in trading with 0H such as Sudan( Ie2en( S/ria( 5unisia ( ,orocco ( and ,auritania. 5he central A2erican econo2/ in the worldwide econo2/ has con=uered 2ore than 2KL fro2 the worldwide "roduction and since the A2erican 2ar8et is considered to :e the largest consu2"tion 2ar8et of co22odities in the world as it has reached a total co22odit/ i2"orts 1 trillion and 96$ :illion dollars in 2))7 and 2 trillion and 112 :illion in 2))$ . Based on that( those i2"orts re"resent an o""ortunit/ for 2ost of the industrial and de1elo"ing countries. $*

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5he i2"act of A2erican i2"orted co22odities and the A2erican ser1ice i2"orts ha1e reached %)$ :illion in 2))$. In which the A2erican recession status fro2 the end of /ear 2))7 until now is e6"ected to continue till this /ear and will result in the reduction of touris2 :ased on the A2erican touristic i2"orts to $) :illion dollars in 2))$. Based on the retraction "hase that affected the worlds Duro"ean countries( a reduction in e6ternal touris2 occurred and the sa2e goes to Ja"an( Horea( and others. 5he direct in1est2ents that ca2e out of A2erica to the rest of the world in 2))7 reached *1% :illion dollars. Based on that( the crisis has caused the deterioration of cash flows. 5he sa2e goes for the A2erican in1est2ents in the world stoc8 2ar8et which reached 2*% :illion dollars in 2))7. ;ith the lac8 of trust( li=uidit/ and the "re1ention of the A2erican :an8s to lend the cor"orations in A2erica( a reduction in the a1erage lending funds outside the 0nited States and that is a :eha1ior that was acco2"anied :/ se1eral Duro"ean :an8s. +es"ite the actions 2ade :/ Duro"ean and Asian central :an8s to "ro1ide li=uidit/ in the 2ar8ets and su""l/ rescue "lans to other countries( a large su2 of cash was 2ade to insure :an8s and to 2oti1ate the2 to lend inside their countr/. Aowe1er( the res"onse fro2 :an8s until now for lending is still li2ited :ecause of the do2ination of factors of fear and "recaution and the wea8ened trust( es"eciall/ with the unclear 1ision related to the finali.ation of the financial crisis. ;ith all that :eing 2entioned( it has :een clear that A2erica9s da2age has i2"acted de1elo"ed countries such as Duro"e and Asia and the rest of the de1elo"ing countries that are in relation with A2erica. 5he de1elo"ing countries were affected fro2 de1elo"ed countries in touris2( direct in1est2ents( indirect in1est2ents or its transfers or e1en the acce"tance of hel" fro2 the2( which lead to the transfer of the i2"act to the rest of the world countries :ased on the conflict :etween econo2ies. 5his is the sa2e factor that lead to the transfer of the negati1e i2"act of the financial sector to the sectors of real acti1ities such industrial acti1ities( agricultural acti1ities( and the ser1ices in general. ;e can su22ari.e the 2ost significant features that resulted fro2 the ;orld Financial <risis which is e6"ected to continue until 2))9 as follows4 1# 5he increase in the refor2ation of cor"oration9s structure of s2all( 2ediu2( and large si.es in general. 2# 5he decrease in the worldwide de2and on co22odities. *# 5he decrease in the "etrol "rice. %# 5he decrease in stoc8 "rices in the financial stoc8 2ar8ets. K# 5he decrease in the e6change of stoc8s in the financial stoc8 2ar8ets. 6# 5he decrease in the nu2:er of e2"lo/ees in cor"orations due to the ter2ination of their contracts and the "re1ention of renewal of other contracts. 7# 5he s"read of une2"lo/2ent in the econo2ical sectors. $# 5he 2aJor losses of the acti1e "roduction sector of which are 2ost significant li8e the "roduction of electricit/ and the "roduction of cars. 9# 5he reduction in the a1erage econo2ical growth. The anal"tical side of the stud"$ 5he resources for the data collection4 It has :een relied on a grou" of resources of :oo8s and "atrols that are related to the 2atter in order to collect data( and for the :asis of this stud/( a =uestionnaire has :een designed to collect data that is related to the e6tent of financial standard i2"act and the e6ternal auditing standards i2"act on the ta6 legislations. 5he unit of the stud/ anal/sis4 5o achie1e the goals of this stud/ a =uestionnaire has :een designed which consists of4 !art 14 =uestions that contain "ersonal infor2ation and that are the gender( educational =ualification( the e2"lo/2ent "osition( and the /ears of e6"erience. !art 24 =uestions a:out the e6tent of i2"act of the financial re"orting standards on ta6 legislations. !art *4 =uestions a:out the e6tent of the i2"act of e6ternal auditing standards on ta6 legislations. For the "ur"oses of attaining the a1erage 2ean( it has :een s"ecified on the :ase of Fi1e !oint 7i8ert Scale# as follows4

$%

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7e1els of acce"tance 5he relati1e weight 5he relati1e "ercent

'er/ high K 1))L

Aigh % $)L

2ediu2 * 6)L

low 2 %)L

'er/ low 1 2)L

The relia ilit" and sustaina ilit" of the measuring tool$ 5he relia:ilit/ test has :een chosen through the use of <ron:ach al"ha# for the :asis of 2easuring the relia:ilit/ and sustaina:ilit/ of the 2easuring tool used in the stud/ and that is through the =uestionnaire 2ade for 2easuring the degree of consistenc/ and credi:ilit/ :etween the answers of the =uestions. 5his stud/ has reached 7*L which is an acce"ta:le "ercentage :ecause it e6ceeded 6)L. +easuring the normal distri ution of data$ 5he test H-S# has :een used to detect the flow of data for nor2al distri:ution in which it has :een clearl/ shown that the 1alues relati1e to the 1aria:les ha1e e6ceeded the le1el of significance ).)K#. 5o detect the a:sence of the inter1ention in the stud/ for2( the <onditional Inde6 <I# has :een used in which the 1alue has reached 26.7%# and it is less than *)# which lines with the 2easuring :ase which i2"lies that the 1alues that ha1e :een calculated( if less than *)( gi1e significance to the relia:ilit/ of the stud/ for2( and the a:sence of "ro:le2s in relation to the 1aria:les. The statistical methods used$ 5he following statistical 2ethods ha1e :een used through the following =uestionnaires4 1# 5he descri"ti1e statistical 2ethods that re"resented recurrences and relati1e recurrences and that it to identif/ the characteristics of the sa2"le studies. 2# 5he a1erage 2ean has :een used to identif/ the i2"ortance of each article fro2 the articles related to the 1aria:les :ased on the assu2ed 2ean *#. 5hat was 2ade through the co2"arison with the a1erage 2ean of the answers related to the 1aria:les of the stud/. *# 5he standard de1iation has :een used to identif/ the a2ount of dis"ersion of answers fro2 the a1erage 2ean. %# 5he anal/tical statistical 2ethods that were re"resented in the 5-5est to e6"eri2ent the h/"othesis of the stud/. The anal"sis of the characteristics of the sample stud"$ Gender4 5a:le 1 show that the nu2:er of 2ales in the sa2"le of the stud/ has reached %1 with a "ercentage of $K.%2L while the fe2ales in the sa2"le of the stud/ ha1e reached 7 with a "ercentage of 1%.K$L. 5a:le-1 Gender# Gender Recurrence Relati1e recurrence ,ale Fe2ale 5otal %1 7 %$ $K.%2L 1%.K$L 1))L

$K

Research Journal of Finance and Accounting ISSN 2222-1697 !a"er# ISSN 2222-2$%7 &nline# 'ol.%( No.2( 2)1*

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Dducational =ualifications4 5a:le 2 shows that the 2aJorit/ of the 2e2:ers of the stud/ are those who hold :achelors degree in which their nu2:er has reached *K with a "ercentage of 72.92L and then the holders of the 2aster degree. 5a:le-2 Dducational -ualification# Dducational -ualification Recurrence Relati1e Recurrence 7ess 5han Bachelors +egree Bachelors +egree ,aster +egree Aigh +i"lo2a !A+ 5otal ) *K $ * 2 %$ )L 72.92L 16.67L 6.2KL %.16L 1))L

Scientific 2aJor4 5a:le * shows that the 2e2:ers of the sa2"le with a "ercentage of 2KL are those s"eciali.ed in the issues of credi:ilit/ and those with a "ercentage of *7.KL are those 8nown to :e as financial 2anagers. ,oreo1er( the stud/ included internal auditors with a "ercentage of $.**L. 5a:le-* Scientific ,aJor# ,aJor Recurrence Relati1e Recurrence ,anager of credi:ilit/ Financial 2anager 5he head2aster of accounting ,aJor accountant Internal auditor 5otal 12 1$ K 9 % %$ 2K.))L *7.K)L 1).%2L 1$.7KL $.**L 1))L

Iears of e6"erience4 5a:le % shows that those 2e2:ers of the stud/ with K or less /ears of e6"erience ha1e a "ercentage of 6.2KL howe1er( those that ha1e /ears of e6"erience :etween 1)-1K /ears ha1e a "ercentage of %7.92L. ,oreo1er( those who ha1e an e6"erience fro2 1K-19 /ears ha1e a "ercentage of 1%.K$L and those who ha1e 2ore than 2) /ears of e6"erience ha1e a "ercentage of 12.K)L.

$6

Research Journal of Finance and Accounting ISSN 2222-1697 !a"er# ISSN 2222-2$%7 &nline# 'ol.%( No.2( 2)1* 5a:le-% /ears of e6"erience# Iears of D6"erience 7ess than K /ears K-1)/ears 1)-1K /ears 1K-19 /ears ,ore than 2) /ears 5otal

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Recurrence * 9 2* 7 6 %$

Relati1e Recurrence 6.2KL 1$.7KL %7.92L 1%.K$L 12.K)L 1))L

Factors related to the financial reporting standards$ 5he 1aria:le has :een 2easured through the state2ents shown in ta:le nu2:er K and through finding each of the a1erage 2ean and the standard de1iation ( the 2ain factors related to the financial re"orting standards and the i2"act on ta6 legislations on each of the following articles ha1e :een deduced4 5a:le-K 5he directions of the res"ondents to the "aragra"hs related with the e6istence of i2"act after the de1elo"2ent of the financial re"orting standards on the ta6 legislations in the Hingdo24 &rder standard A1erage State2ent Nu2:er de1iation 2ean 6 1.K% 2.)7 <ontinuous adJust2ents and de1elo"2ents in the IFRS# Fle6i:ilit/ that is offered fro2 the a""lication fro2 the IFRS Reduction in trans"arenc/ in the IFRS A:sence of clarit/ in the a""lication of the IFRS Re"lace2ents for the accounting 2easure2ent :ased on the IFRS Insufficienc/ in so2e of the IFRS :eing u"dated with the econo2ical de1elo"2ents Future e1aluation "ro:le2s that is "ro"osed :/ so2e of the IFRS 5he 1ariet/ of the accounting 2easure2ents wa/s of the financial e1ents in IFRS A""lication of the fair 1alue to 2easure assets F in1est2ents in the IFRS A""lication of the fair 1alue in the accountanc/ of deri1ati1es and financial instru2ents General ,ean $7 1

1.$$

2.1)

1) 9 *

2.%K 1.%K 1.9$

2.$6 1.9$ 2.2*

* % K

1.6%

2.21

1.$7

2.)K

1.96

2.)1

1.1$

2.9$

1.7K

2.9%

1)

1.77

2.2%*

Research Journal of Finance and Accounting ISSN 2222-1697 !a"er# ISSN 2222-2$%7 &nline# 'ol.%( No.2( 2)1*

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It has :een shown through ta:le K that the a1erage 2ean for all 1aria:les was less than the h/"othetical 2ean which reached *# which 2eans that the directions of the res"ondents of the sa2"le of the stud/ to the related state2ents of the i2"act of financial re"orting standards on the ta6 legislations was negati1e. Related to standard de1iation it has :een shown through the ta:le that a reduction in the 1alue of standard de1iation shows a reduction in the dis"ersion of the answers of the res"ondents on the =uestions related to the e6tent of e6istence of the i2"act of IFRS on the ta6 legislation. It has :een shown through ta:le K that the a""lication of the fair 1alue to 2easure the assets( in1est2ents( and financial instru2ents has re"resented 2ore of the 2ost i2"acted state2ents( and if the 1aria:les related to those di2ensions didnCt e6ceed the h/"othetical 2ean( an indicator would show that this standard had a great i2"act on the ta6 legislations( and this acco2"anies the latest adJust2ents in each of the inco2e ta6 law and sales ta6 nu2:er 2$# and nu2:er 29# for /ear 2))9 which indicated in 2ore than field in the rule of law that the 2ar8et 1alue is a wa/ to 2easure through which the ta6 accountanc/ can :e deduced. Factors related to the e6ternal auditing standards4 5his 1aria:le has :een 2easured through the state2ents shown in ta:le 6 and through finding each of the a1erage 2ean and the standard de1iation( the 2ain factors related to the i2"act of the e6ternal auditing on the ta6 legislations ha1e :een deduced as follows4 5a:le-6 the directions of the res"ondents to the state2ents related to the i2"act of the e6ternal auditing standards on the ta6 legislations4 &rder Standard A1erage State2ent Se=uence +e1iation ,ean $ 1.9% 2.)1 +u"lication of the inde"endence of the e6ternal auditing in se1eral circu2stances 5he choice of e6ternal auditors :/ :oard of directors A:sence of e1aluation of auditors for future ris8s in an acti1e for2 !resence of deterioration in the "rocedures of e6ternal auditing A:sence of understanding e6ternal auditors for the nature of facilities wor8 in a general con1enient wa/ A:sence of consideration of e6ternal auditing and rules that are a""lied A:sence of the use of anal/tical "rocedures of e6ternal auditing in a general and a con1enient wa/ A:sence of the use of e6ternal auditing :/ =ualified s"ecialists in certain circu2stances <aution of e6ternal auditing in recei1ing financial infor2ation s"eciali.ed in certain facilities $$ 1

2.1)

2.21

2.26

1.9$

1*

1.2$

1.$9

1.*2

2.1K

1)

2.*6

1.9K

1.22

2.16

11

2.K)

1.92

12

2.1$

1.9)

Research Journal of Finance and Accounting ISSN 2222-1697 !a"er# ISSN 2222-2$%7 &nline# 'ol.%( No.2( 2)1* 6 1.76 2.1) Insufficienc/ in the "rocess of "lanning and auditing !resence of deterioration in the e1aluation of the sensi:ilit/ of the accounting e6"ectations of the client !resence of deterioration of the use of sa2"les in e6ternal auditing +u"lication of in1estigation in "rocedures and contracts and co22it2ents with the related client General ,ean 1)

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1.*2

2.2*

11

1.6%

2.11

12

1.$%

2.)%

1*

1.$1

2.)K

It has :een shown through ta:le 6 that the a1erage 2ean for all 1aria:les was less than the h/"othetical 2ean that reached *# and that shows that the directions of the res"ondents of the sa2"le of the stud/ towards the related state2ents related to the i2"act of the e6ternal auditing on the ta6 legislations was negati1e. 5he decrease in the standards de1iation shows a decrease in the dis"ersion of the direction of the res"ondent a:out the =uestions related to the e6tent of e6istence of the i2"act of e6ternal auditing on ta6 legislation. It has :een shown through ta:le 6 the e1aluation of the reasona:leness of accountanc/ and the choice of e6ternal auditors :/ the :oard of directors and the a:sence of the use of the anal/tical "rocedures were one of the highest 1aria:les des"ite that the/ didnCt e6ceed the h/"othetical 2ean( these inde6es follow in coordination( to a certain e6tent( with the o"inions of s"ecialists that ha1e seen that the accounting e1aluations and re"lace2ents related to it fro2 challenges that face e6ternal auditors( as well as the audit of ta6ation wont ac8nowledge these e1aluations which would lead to what is 8nown as ta6 ga". -xperiments of the h"pothesis of the stud"$ The first main h"pothesis$ 5here is an i2"act with statistical e1idence for the accounting "olicies in the ;orld Financial <risis For the "ur"oses of e6"eri2enting the first h/"othesis( the 5est-5 test was used in co2"arison with the a1erage 1aria:les as it has :een shown that the 1alue 5 that has :een calculated a:o1e the 1alue of 5 in the ta:le at SigMM).))# and :ased on it has :een assu2ed that the re"lacea:le h/"othesis and the acce"tance of the nihilis2 h/"othesis ha1e :een reJected. 5his 2eans that the IFRS did not ha1e an/ i2"act with statistical e1idence on the ta6 legislations. The second main h"pothesis$ 5here is an i2"act with statistical e1idence of the e6ternal auditing in the ;orld Financial <risis4 For the "ur"oses of e6"eri2enting the first h/"othesis( 5est-5 has :een used in co2"arison with the a1erage 1aria:les as it has :een shown that the 1alue 5 calculated a:o1e the 1alue 5 in the ta:le at SigMM).))#( and :ased on that the re"lacea:le h/"othesis and the acce"tance of the nihilis2 h/"othesis ha1e :een reJected. 5his 2eans that the e6ternal auditing standards didnCt ha1e an i2"act with statistical e1idence on the ta6 legislations. Results$ ;e can su22ari.e the 2ain results of the current stud/ as follows4 1# 5here is no i2"act with statistical e1idence of the IFRS on the ta6 legislations( with the "resence of so2e wea8 i2"act fro2 the "oint of 1iew of the stud/ sa2"le related to the fair 1alue and the e6tent of its use in the in1est2ents( assets( and the financial instru2ents. 2# 5here is no i2"act with statistical e1idence of the e6ternal auditing standards on the ta6 legislations( with the "resence of so2e difficulties related to the e1aluations and the future 1alues which necessitate the e6ternal auditor to ta8e the2 into consideration during the e6ternal audit.

$9

Research Journal of Finance and Accounting ISSN 2222-1697 !a"er# ISSN 2222-2$%7 &nline# 'ol.%( No.2( 2)1*

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Recommendations$ 1# 5he necessit/ of the awareness for e6ternal auditors with what9s related to the i2"ortance of the 2ost con1enient "lanning and the i2"ortance of anal/tical re1ision in e6ternal auditing acti1ities with what corres"onds with the goals on which e6ternal auditing has :een used in order to achie1e har2on/ :etween IFRS and ta6 legislations. 2# 5he necessit/ of awareness for accountants and e6ternal auditors with the i2"ortance of the fair 1alue and its i2"act on financial data and infor2ation through showing the financial data ris8s that are related to the a""lication of the fair 1alue and its i2"act on re"orting financial re"orts and the accounting ac8nowledge2ent of financial data. *# S/2"osia that shows the i2"ortance of accounting "ractices which clarifies the 2echanis2s of interaction with the fair 1alue to increase confidentialit/ and caution when attaining financial infor2ation( there:/ achie1ing a fair "resentation of financial infor2ation to descri:e the econo2ical issues in facilities. %# Increasing the coordination and colla:oration :etween the legal association of accountants and the inco2e and sales ta6 de"art2ent for the "ur"oses of standing on all the o:stacles that occur without the acce"tance of all the certified accounts fro2 e6ternal auditors in the "atrol and without auditing fro2 the IS5+. K# 5he necessit/ of awareness for the auditors of inco2e and sales ta6es with the i2"ortance of IFRS and the International Auditing Standards IAS#. References4 1. Al-Hashi and Al-Hhati: 2))%#( >Accounting Standards +irected towards the Fair 'alues and the Dcono2ic Inco2e( and its Influence on the Dcono2/>( A7-Na/tuna 0ni1ersit/ for scientific researches and studies( 1olu2e 2#( issue 2#. 2. Al-Suwait/ 2))K#( >Re:uilding <onfidence in the !u:lished Financial +ata >( the auditing 2aga.ine( the institution of Jordanian accountants( issue 21#. *. Al-Hashi 2))$#(>I2"act of Financial <risis on the 'iews of Accounting Standards legislation>( the auditing 2aga.ine( the Institution of Juristic Jordanian Accountants( issue 7K#. %. Al-A::as 2))$#( the Accounting Standard 1K7#( >;as it the D6ecutioner of the Financial <risis( or was it its 1icti2?> ( econo2ic 2aga.ine ( issue K%92#. K. Al-Anna:i 2))2#( >5he safet/ of <redit and Infor2ation s/ste2>( the /earl/ scientific conference for the facult/ of econo2/ and 2anage2ents sciences holding the title of >Infor2ation 5echnolog/> and its role in econo2ic growth ( Al-Na/tuna 0ni1ersit/ in Jordan. 6. Aashad 2))%#( >Iour D1idence for the Ba..el Agree2ent 2#>( Ba.el9s enc/clo"aedia( "art( the union of Ara: :an8s( Beirut( SS.1$9-19). 7. Aa22ad 2))2 ("ro:le2s regarding the a""lication of accounting o1er the fair 1alues in the Dg/"tian en1iron2ent with the a""lications in :an8s( the 2aga.ine of econo2/ and trade( facult/ of trade ( 0ni1ersit/ of Ain Al-Sha2s ( issue 2#. $. +ah2ash 2))*#( >I2"ro1ing and de1elo"ing the <or"orate Go1ernance in Ban8s>( the 2aga.ine of :an8s in Jordan( issue 1)#( 1olu2e 22#( SS. 27-*). 9. Board of International Accounting Standards 2))*# ( the International Standards for !re"aring Financial Re"orts.

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