Document Type


Publication Date

Summer 6-17-2022


In 2006, Egypt issued new standards to be in line with the International Financial Reporting Standards (IFRS). The new Egyptian Accounting Standards (EAS) were created with the intention of making financial statements more comparable and transparent, and they replaced the country’s previous 1997 and 2002 standards. This study aims to investigate how these new modifications of the EAS affect the market volatility (MV) and earnings quality (EQ) in such a developing country. Using data from 184 observations from 46 non-financial Egyptian listed firms for the period from 2013 to 2018, our results show that IFRS convergence has no effect on EQ (Mahmoud, 2018; Osinubi, 2020). Earnings quality is also found to be inversely related to MV (Hung & Van, 2020; Wongchoti, Tian, Hao, Ding, & Zhou, 2021), and IFRS has a significant positive impact on MV. The results also confirm no change in EQ and MV after the new EAS. These findings can guide standard setters and regulators that applying high-quality financial standards is not solely sufficient to provide accurate information and that other factors, such as legal enforcement, organization performance, and increasing the cost of compliance, are needed alongside post-IFRS convergence.

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