An Empirical Study of the Extent of Compliance with the Requirements of IAS 7 by The Jordanian Companies

The International Accounting Standards (IAS) was developed in response to growing globalization of business. One of the main aims of the international standards is to achieve a degree of comparability. This study is an attempt to discover the level of actual implementation of the International accounting standards in Jordan. One of the major issues a user of financial statement may require to be disclosed is the cash flow of an entity for a given period; such requirement is provided by the IAS 7 cash flow statement. This paper is an attempt to look at the implementation of IAS 7 by the Jordanian companies. The main assumption is that, Jordanian companies are preparing a cash flow statement, and they prefer to prepare it according to the indirect method. The study analyzed 40 published financial statements of Jordanian companies, listed with the Securities Exchange Commission of Jordan (SECJ) representing about 22% of the total companies listed at the Amman Financial Market (AFM).The main conclusion is that Jordanian companies are preparing a cash flow statement, and they use the indirect method to prepare it because it is easier for them