Development of Accounting Regulations and Practices in Kuwait: An Analytical Review

• Author: Yasean Tahat,Theresa Dunne,Hesham Almujamed,Mohamed Omran,
• Published date: 01 September 2017
• DOI: http://doi.org/10.1002/jcaf.22295
• Date: 01 September 2017

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© 2017 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22295

Development of Accounting

Regulations and Practices in

Kuwait: An Analytical Review

Hesham Almujamed, Yasean Tahat, Mohamed Omran, and Theresa Dunne

INTRODUCTION

The extant litera-

ture highlighted the

crucial role played by

the external environ-

ment on a country’s

accounting system

(Dunne et al., 2008).

For instance, the

stage of economic

development, type of

economy, growth pat-

tern of the economy

and culture can

affect a country’s

accounting practices.

Doupnik and Salter

(1995) argue that the

stage of development

affects the type of

business transactions

conducted in a coun-

try and the type of

economy determines

which transactions

are more prevalent.

Several international

accounting studies

have examined the

factors that can affect

the development of

an accounting sys-

tem (Assenso-Okofo,

Ali, & Ahmed, 2011;

Elsayed & Hoque,

2010; Mardini,

Tahat, & Power,

2013; Mashayekhi &

Mashayekh, 2008).

These studies

identify a number

of factors that can

affect a country’s

accounting practices,

including (a) the

political and eco-

nomic system; (b) the

legal system; (c) the

accounting profes-

sion; (d) the taxation

system; and (e) cul-

ture. The vast major-

ity of prior research

in this field has

focused on developed

countries, particu-

larly in the Western

world, while other

regions such as the

Middle East in gen-

eral, and Kuwait in

particular, have been

relatively overlooked.

To provide an institutional insight into Kuwait’s cur-

rent accounting practices and regulations and their

potential for advancement, this study addresses a

number of key institutional issues including eco-

nomic and political influences, the legal system

classification, and cultural settings. The study

adopts an institutional approach in order to facili-

tate an understanding of the role institutional

factors have played on accounting practices and

regulations in Kuwait. Economic, political, and

legal factors are found to be directly linked to

specific features of the accounting system. Kuwaiti

Parliament is a key player in the formation of all

economic and political policies issued regarding

business practices in general, and accounting

ones in particular. The professions need to assert

themselves and make sure that their voices are

not lost in a sea of competing concerns regarding

regulatory reform. Our analytical review brings

together a diverse body of knowledge and attempts

to understand accounting environment in Kuwait as

a coherent hole. Such a holistic approach should

facilitate a clear understanding of current practices

and serve to guide future accounting regulatory

reform. This study should be of interest to acade-

micians, practitioners and regulators, who seek

to develop accounting practices, disclosures and

regulations. © 2017 Wiley Periodicals, Inc.

Editorial Review