The UAE has increased its trade with western nations significantly in recent years (Looney,
2003), with the establishment of “free trade” zones to establish the UAE as the
headquarters for Middle East trading. This brings pressure to adopt globalized forms of
accountability and financial reporting, particularly those of its “influential trading
partner(s)” (Haswell and McKinnon, 2003, p. 8). The UAE’s trade links with countries in
the European Union (EU) are strong, with over $US9.5 billion in trade in 2003, as
compared to trade with the US of only a little over $US2 billion (Dubai Chamber of
Commerce and Industry, 2003). In the context of these trading relationships, and the EU’s
requirement for listed consolidated entities to adopt IFRS from January 2005, the UAE’s
move towards adoption of IFRS is understandable.