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Financial Reporting Framework in Jordan

The information below is selected excerpts from the World Bank's Report on the Observance of Standards and Codes (ROSC) – Accounting and Auditing for Jordan as of 10 June 2004. Footnotes have been omitted.

Jordan's statutory framework for accounting and auditing

8. The Companies Law 22/1997 requires public shareholding companies, general partnerships, limited partnerships, limited liability companies, private shareholding companies, and foreign companies operating in Jordan to prepare annual audited financial statements. All companies registered under the Companies Law should maintain sound accounting records and present annual audited financial statements in accordance with 'internationally recognized accounting and auditing principles.' Auditors are elected for one year with the possibility of renewal. An auditor's performance is evaluated by company shareholders, who at their annual general meeting decide whether to appoint a new auditor or renew the appointment of the existing auditor. The Companies Law also requires the auditor's report to address the following at the annual general meeting:

  • All data and explanations for satisfactory fulfillment of duties have been obtained.
  • The company maintains satisfactory accounting records and documents.
  • The company's financial statements (balance sheet, income statement, and statement of cash flows) are prepared in accordance with internationally recognized accounting and auditing principles.
  • Audit procedures have been sufficiently followed.
  • Financial statements, which are included in the Board of Director's report addressed to the General Assembly, comply with the company's records.
  • All relevant legal requirements have been reflected in the accounts.

9. According to the Jordanian Securities Commission (JSC) Law (23/1997) and Directives of disclosures, auditing, and accounting standards (1/1998), all entities subject to JSC's supervision are required to apply International Financial Reporting Standards (IFRS). However, the explanation included in the directives states that if there is a conflict between international standards and local legislation, the latter shall supersede. The entity should then disclose this decision along with its impact on the financial statements (balance sheet, income statement, statement of cash flows, changes in shareholders equity, and notes to financial statements). The JSC requires all listed companies to file annual audited financial statements (within 90 days from fiscal year-end) and mid-year reviewed financial statements (within 30 days from mid-year-end).

Because the Company Law requires all companies (both listed and unlisted) to comply with 'internationally recognised accounting principles', all companies in Jordan follow IFRSs. As the IFRS for SMEs is an IFRS, the IFRS for SMEs may be used by all companies other than those regulated by the Jordanian Securities Commission (for which JSC requires full IFRSs). No special adoption of the IFRS for SMEs is needed yet in Jordan.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.