IFRS adoption in Islamic countries

The main objective of this project is to analyse the value relevance regarding the preference for IFRS accounting information adoption in Islamic countries. From the study, tested on 30 companies established in the Islamic countries of Emirates and Qatar: I have obtained a positive association between the adoption of IFRS and the adoption of AAOIFI standards; I have demonstrated the similarities and differences between them; and, I have shown how this could be applied in Islamic companies and institutions. The study showed significant differences between international standards and Islamic standards, my study has found that Islamic accounting standards are general they are not classified in groups and do not cover all aspects of accounting. This case study finds the following four conclusions: 1. It is critical to adapt traditional methodologies to assess value relevance in developing markets to make sense of the data; 2. Smaller companies typically lead to higher market earnings and returns per share than their larger counterparts; 3. Positive news typically affects market shares more than negative news; 4. Investors typically pull out of the market when positive news comes, and invest again after negative news. This proves to be a valuable insight in the roles of AAOIFI, IFRS, and the emerging Islamic financial markets.