This thesis examines the effect of introducing international accounting standards (lASs) on the Jordanian Stock Exchange during the period 1990-1991. Literature on accounting standards in general and lASs in particular is reviewed for the likely effects of lASs adoption in Jordan. A research methodology is developed using data from Jordanian lAS adopting firms (experimental group) and lAS non-adopters (control group) for 1990 and 1991 respectively. Sub-portfolios are then constructed representing the financial sector, the service sector, the industrial sector, low traded firms, heavily traded finns, small finns, large finns, domestic-owned firms, foreign-owned firms, winner firms and loser £inns. For all samples and sub samples, abnormal returns (for lAS adopters and non adopters) are analysed using the traditional market model but also using an average return model and a raw return model. The observed market reactions are then compared with those anticipated (or claimed by supporters of lASs adoption in the literature). The main findings are that lASs adoption does increase the infonnation content of financial statements (as observed in abnonnal returns) but that reaction occurs mainly prior to accounts release. An exception to this general effect is large finns where lAS adoption does not have an observable effect on abnormal returns around announcement date. The research also provides evidence that lASs adoption has little influence on Jordanian domestic-owned firms' share price reactions but a considerable effect on foreign-owned firms' share prices. The research findings are examined for their relevance for other developing countries considering replacing locally - determined accounting standards with lASs.