The Fundamental Issues with Financial Derivatives within the Framework of International Accounting Standard No. (39) and Their Relative Responsibility for the Current Global Financial Crisis

There are several factors that lead to the current and extremely dangerous financial and economic crisis, foremost amongst which is the way financial derivatives are dealt with and accounted for under international standards, especially International Accounting Standard No. (39), in addition to other factors that either complemented or were a natural extension of the aforementioned standards such as lack of oversight and poor transparency. Working towards the development of appropriate standards and sound accounting practices will result in a balanced, fair international financial system where accounting will then succeed where policy has failed; unfortunately reality points to the supremacy of the former trend where financial derivatives, its standards and accounting reflects the exploitative aspirations of economic policies. After reviewing these factors and analyzing the core issues and its impact on the current financial crisis, the study reached a number of conclusions that formed a basis upon which appropriate recommendations have been proposed.