Overview on the Convergence of US GAAP into IFRS in Saudi Arabia

Elhaj, Malik R.

doi:10.13189/ujaf.2019.070402

Cited by 4 publications

(4 citation statements)

References 2 publications

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“…For instance, the researchers can use multi-dimensional measures of accounting qualities such as earnings management, earnings smoothing, value relevance of accounting information, earnings persistence and so on. Similarly, as the concept of IFRS is broad, further study can look at the impact of various stages of IFRS implementation, from the early convergence process into its full implementation; the voluntary vs. mandatory adoption of IFRS, or just simply the process of IFRS convergence [42]. It is also interesting to figure out the qualitative aspects of IFRS implementation [44,43,45].…”

Section: Discussionmentioning

confidence: 99%

Linking Institutional Environment to the IFRS and Accounting Quality: A Proposed Framework

Fuad¹,

Zulaikha²,

Juliarto³

2021

ujaf

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Debates on whether the new globally adopted accounting standard outperforms national generally accepted accounting principles have not yet reached the final conclusion. Prior researches were mixed and often yield to contradictory findings. Our study believes that there are numerous institutional backgrounds that contribute to these inconclusive findings. The main objective of this study is to propose a testable framework on the impact of implementation of International Financial Reporting Standards on accounting qualities. The proposed framework based on the assumption that accounting should be linked to its social, political influences and culture. In this regard, we proposed whether the positive effects of IFRS implementation to the increase of accounting qualities may also be enhanced (impaired) by the firms' national culture and corruption at the country level. This study should provide further research some preliminary arguments on how the accounting information quality is not affected by the high-quality accounting standards, per se. Rather, our study conveys worth-looking message that IFRS-accounting quality may also be influenced by those institutional environments. Hopefully, this may provide a way out of the intractable debate of prior research.

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Section: Discussionmentioning

confidence: 99%

Linking Institutional Environment to the IFRS and Accounting Quality: A Proposed Framework

Fuad¹,

Zulaikha²,

Juliarto³

2021

ujaf

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“…The second is the SOCPA consent of the IFRS compatibility with the Saudi accounting standards. The third is the local regulatory framework that removes optional treatments and enhances disclosure requirements in financial reports (Elhaj, 2019).…”

Section: International Financial Reporting Standards In Saudi Arabiamentioning

confidence: 99%

The impact of IFRS adoption on Saudi Arabia

Tlemsani

Hashim

Matthews

2023

JIABR

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Purpose This study aims to examine the implementation of International Financial Reporting Standards (IFRS) in Saudi Arabia. It investigates how the adoption of IFRS has affected four critical areas in the financial statements of publicly listed companies: profit and loss statement, balance sheet, cash flow statement and retained equity statement in Saudi Arabia. The paper also explores the essential factors/drivers that influence the adoption of IFRS and its implication in Saudi Arabia. Design/methodology/approach Data was obtained from Saudi Stock Exchange (Tadawul) listed companies from eleven industries in Saudi Arabia. This cross-sectional study analyses critical financial data across eleven distinctive industries. To identify the impact of adopting IFRS, the researchers use a paired t-test to evaluate seven key elements of financial statements underlying the critical areas: non-current asset, current asset, total assets, shareholders equity, non-current liability, current liability and total liability. The sample captures cross-sectional data from well-developed global industries in Saudi Arabia, pre- and post-implementation of IFRS. Thus, the analysis of the sample data gives a representative picture of the population of the Saudi Arabian industry. Findings The results reveal significant differences between GAAP and IFRS reporting standards in the measurement, recognition and classification of non-current assets and liabilities. The differences are expressed in the variance between the GAAP and IFRS. Specifically, the differences between GAAP and IFRS demonstrated by the t-value are significant and reliable (respectively, 5.3 and 4.1). Additionally, the t-value is validated by the p-value, which in both was significant. Research limitations/implications The outcomes of this research will benefit accounting information users, practitioners, researchers and regulators. Since Saudi Arabia’s policymakers have mandated the full adoption of IFRS in financial reporting, the study contributes to the adoption of IFRS practices throughout the Saudi industry. Adopting full IFRS standards requires widespread IFRS expertise to cope with the transition. Originality/value This study advances research into the perennial issues associated with changes in reporting towards IFRS standards, especially in Saudi Arabia. The contribution to theory and practice enters new and fruitful areas.

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“…Figure 1 provides a visualization of IFRS challenges. [4] explored that the fair value adoption and Zakat rules are the most challenges for SMEs in the financial statements convergence process in addition to lack of adequate guidance by SOCPA and the complexity of IFRS. The Zakat rules need more interpretation and transparency.…”

Section: Literature Reviewmentioning

confidence: 99%