Expectation Gap in Applying the IAS 2 [Inventories]: Evidence from Palestine

Abstract

This paper comes as a defacto in order to clarify and measure the level of applying the IAS 2 (inventories) in the approved manner by the Palestinian commercial and industrial corporations. After a large-scale of inspection, this study puts under scrutiny the compliance level with the disclosure requirements as explained in the IAS 2. It also reveals the manner that the theory of the IAS 2 is applied in respect with its applications and policies. This paper is also held altogether with a specially designed questionnaire that answers the paper questions; wherein 120 questionnaire forms were distributed to the targeted respondents (financial managers, accountants, and internal auditors). The returned forms are 97 in which statistically constitute (80.83%) of the study sample. The study objectives thus are achieved by using a number of statistical methods like (Cronbach's Alpha, Descriptive Statistics, OneSample T-Test, and Mann-Whitney U test). The findings show that the industrial publicly held corporations apply inventory accounting policies and methods in the approved manner. As well, they comply with the disclosure requirements in accordance with the IAS 2. What is more, the results reveal that the privately held industrial corporations do not apply inventory accounting policies and methods in the approved manner. These corporations also do not match the disclosure requirements in accordance with the IAS 2. Finally, yet importantly, this study recommends the Palestinian publicly held and privately held corporations to apply the IAS 2 in the approved manner. It also recommends them to comply with the disclosure requirements according to the IAS 2.