Abstract:
This Paper tries to answer two main questions: (1) do accounting standards have any role in supporting the capital market? And (2) Is it possible for the accounting standards to enhance the Egyptian Accounting System? To answer the first question a detailed explanation of which capital market could standards support and the types needed to support the capital market and the reasons behind the necessity of making the enhancement for the Egyptian Accounting System. A suggested model for the correction of the Egyptian accounting system was developed to increase the efficiency of the Egyptian capital market. Ten Egyptian companies have been selected as a sample for the study to test the hypothesis that the companies in the Egyptian business sector couldn't comply with the requirements of the capital market which leads to the failure of this market. The central finding reported in this paper is that focus should be on the accounting standards related to the disclosure and the support of capital market because it represents 36% of the total accounting standards. The paper concludes with a group of recommendations with emphasis on the approach of the presentation of the financial statements and special consideration should be given to cost/benefit anaylsis approach when preparing standards.
