IDEAS home Printed from https://ideas.repec.org/a/pal/ijodag/v14y2017i3d10.1057_s41310-017-0020-0.html
   My bibliography  Save this article

IFRS and Saudi accounting standards: a critical investigation

Author

Listed:
  • Mohammad Nurunnabi

    (Prince Sultan University)

Abstract

Despite a substantial move toward convergence between principles-based International Financial Reporting Standards (IFRS) globally, there has been little research examining the differences between national standards and IFRS. The purpose of this study is to investigate the differences between IFRS and Saudi accounting standards (Saudi GAAP) issued by the Saudi Organization for Certified Public Accountants (SOCPA). Saudi Arabia is a member of G20 and the largest oil exporter in the world. The study finds that there are major differences between Saudi GAAP and the 15 IFRS standards studied: IAS 1 Presentation of Financial Statements; IAS 7 Statement of Cash Flows; Zakat and IAS 12 Income Tax; IAS 16 Property Plant and Equipment; IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors; IAS 17 Leases; IAS 19 Employee Benefits; IAS 21 The Effects of Changes in Foreign Exchange Rates; IAS 24 Related Party Disclosures; IAS 34 Interim Financial Reporting; IAS 36 Impairment of Assets; IAS 38 Intangible Assets; IAS 40 Investment Property; IAS 41 Agriculture; and IFRS 9 Financial instruments. To the best of our knowledge, this is the first study on differences between Saudi GAAP and IFRS, and the findings thus make a valuable contribution to accounting regulation literature. The findings are innovative and will be helpful to local standard setters (SOCPA), international standard setters (IASB), and preparers and investors. The findings suggest that urgent training is required for the effective implementation of IFRS in Saudi Arabia.

Suggested Citation

  • Mohammad Nurunnabi, 2017. "IFRS and Saudi accounting standards: a critical investigation," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 14(3), pages 191-206, August.
    • Handle: RePEc:pal:ijodag:v:14:y:2017:i:3:d:10.1057_s41310-017-0020-0
    DOI: 10.1057/s41310-017-0020-0
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41310-017-0020-0
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1057/s41310-017-0020-0?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Al-Sehali, Mohammed & Spear, Nasser, 2004. "The decision relevance and timeliness of accounting earnings in Saudi Arabia," The International Journal of Accounting, Elsevier, vol. 39(2), pages 197-217.
    2. Nurunnabi, Mohammad, 2014. "‘Does accounting regulation matter?’: An experience of international financial reporting standards implementation in an emerging country," Research in Accounting Regulation, Elsevier, vol. 26(2), pages 230-238.
    3. Nurunnabi, Mohammad, 2015. "The impact of cultural factors on the implementation of global accounting standards (IFRS) in a developing country," Advances in accounting, Elsevier, vol. 31(1), pages 136-149.
    4. Alon, Anna & Dwyer, Peggy D., 2014. "Early Adoption of IFRS as a Strategic Response to Transnational and Local Influences," The International Journal of Accounting, Elsevier, vol. 49(3), pages 348-370.
    5. Prather-Kinsey, Jenice, 2006. "Developing countries converging with developed-country accounting standards: Evidence from South Africa and Mexico," The International Journal of Accounting, Elsevier, vol. 41(2), pages 141-162.
    6. Chamisa, Edward E., 2000. "The Relevance and Observance of the IASC Standards in Developing Countries and the Particular Case of Zimbabwe," The International Journal of Accounting, Elsevier, vol. 35(2), pages 267-286, July.
    7. Murphy, Ann B., 2000. "The Impact of Adopting International Accounting Standards on the Harmonization of Accounting Practices," The International Journal of Accounting, Elsevier, vol. 35(4), pages 471-493, 010.
    8. Zeghal, Daniel & Mhedhbi, Karim, 2006. "An analysis of the factors affecting the adoption of international accounting standards by developing countries," The International Journal of Accounting, Elsevier, vol. 41(4), pages 373-386, 012.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nasser A. Alsulayhim, 2019. "The Relationship between Working Capital Management and Profitability," International Business Research, Canadian Center of Science and Education, vol. 12(8), pages 142-152, August.
    2. Nurunnabi, Mohammad & Donker, Han & Jermakowicz, Eva K., 2022. "The impact of mandatory adoption of IFRS in Saudi Arabia," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 49(C).
    3. Adamu Pantamee Abdurrahman & Shafi Mohamad & Amena Sibghatullah & Ooi Chee Keong & Vu Minh Hieu & Putri Mutira, 2022. "Role of Corporate Social and Environmental Responsibilities in addressing Sustainable Development Goals: Evidence from Malaysian Manufacturing Firms," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 247-256, May.
    4. Manal Alidarous & Fouad Jamaani, 2021. "The Concurrent Effects of IFRS Mandate and Formal Institutional Quality on the Aftermarket Performance of IPO Firms in Emerging Countries," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(3), pages 320-344, May.
    5. Muath Abdelqader & Khalil Nimer & Tamer K. Darwish, 2021. "IFRS compliance in GCC countries: Do corporate governance mechanisms make a difference?," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(4), pages 411-425, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Poudel, Ghanshyam & Hellmann, Andreas & Perera, Hector, 2014. "The adoption of International Financial Reporting Standards in a non-colonized developing country: The case of Nepal," Advances in accounting, Elsevier, vol. 30(1), pages 209-216.
    2. Nurunnabi, Mohammad & Donker, Han & Jermakowicz, Eva K., 2022. "The impact of mandatory adoption of IFRS in Saudi Arabia," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 49(C).
    3. Pignatel, Isabelle & Tchakoute Tchuigoua, Hubert, 2020. "Microfinance institutions and International Financial Reporting Standards: An exploratory analysis," Research in International Business and Finance, Elsevier, vol. 54(C).
    4. Cătălina Florentina PRICOPE, 2016. "The role of institutional pressures in developing countries. Implications for IFRS," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(607), S), pages 27-40, Summer.
    5. S. Susela Devi & R. Helen Samujh, 2015. "The Political Economy of Convergence: The Case of IFRS for SMEs," Australian Accounting Review, CPA Australia, vol. 25(2), pages 124-138, June.
    6. Tyrrall, David & Woodward, David & Rakhimbekova, Almagoul, 2007. "The relevance of International Financial Reporting Standards to a developing country: Evidence from Kazakhstan," The International Journal of Accounting, Elsevier, vol. 42(1), pages 82-110.
    7. Mujeeb Saif Mohsen Al-Absy & Ku Nor Izah Ku Ismail, 2019. "Accountants¡¯ Perception on the Factors Affecting the Adoption of International Financial Reporting Standards in Yemen," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(4), pages 128-142, July.
    8. Pr. Benhayoun Issam & Pr. Zejjari Ibtissam, 2023. "Determinants of IFRS for SMES Adoption Worldwide [Les déterminants de l'adoption de l'IFRS pour PMEs au monde]," Post-Print hal-04209334, HAL.
    9. repec:dau:papers:123456789/2091 is not listed on IDEAS
    10. Nnadi, Matthias & Soobaroyen, Teerooven, 2015. "International financial reporting standards and foreign direct investment: The case of Africa," Advances in accounting, Elsevier, vol. 31(2), pages 228-238.
    11. Maradona, Agus Fredy & Chand, Parmod, 2018. "The Pathway of Transition to International Financial Reporting Standards (IFRS) in Developing Countries: Evidence from Indonesia," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 30(C), pages 57-68.
    12. Akisik, Orhan & Gal, Graham & Mangaliso, Mzamo P., 2020. "IFRS, FDI, economic growth and human development: The experience of Anglophone and Francophone African countries," Emerging Markets Review, Elsevier, vol. 45(C).
    13. Albu, Cătălin Nicolae & Albu, Nadia & Alexander, David, 2014. "When global accounting standards meet the local context—Insights from an emerging economy," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(6), pages 489-510.
    14. Bonito, Ana & Pais, Cláudio, 2018. "The macroeconomic determinants of the adoption of IFRS for SMEs," Revista de Contabilidad - Spanish Accounting Review, Elsevier, vol. 21(2), pages 116-127.
    15. Salma Damak-Ayadi, 2007. "De L'Efficacite Des Mesures De Convergence Pour Preparer Le Passage Aux Ias/Ifrs En France," Post-Print halshs-00544879, HAL.
    16. Bello Usman Baba, 2013. "Assessing Nigeria’s Journey towards IFRS Adoption," Information Management and Business Review, AMH International, vol. 5(10), pages 505-513.
    17. Helen Hong Yang & Colin Clark & Changyu Wu & Alan Farley, 2018. "Insights from Accounting Practitioners on China's Convergence with IFRS," Australian Accounting Review, CPA Australia, vol. 28(1), pages 14-27, March.
    18. Samuel, Sajay & Manassian, Armond, 2011. "The rise and coming fall of international accounting research," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 22(6), pages 608-627.
    19. Beata Zyznarska-Dworczak Ivana Mamić Sačer, 2019. "Accounting Systems in Poland and Croatia - comparative study," Zagreb International Review of Economics and Business, Faculty of Economics and Business, University of Zagreb, vol. 22(1), pages 55-72, May.
    20. Parmod Chand & Arvind Patel & Michael White, 2015. "Adopting International Financial Reporting Standards for Small and Medium-sized Enterprises," Australian Accounting Review, CPA Australia, vol. 25(2), pages 139-154, June.
    21. Oleh Pasko, 2018. "Theories of Regulation in the Context of Modern Practice of Accounting Regulation," Oblik i finansi, Institute of Accounting and Finance, issue 2, pages 37-46, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:ijodag:v:14:y:2017:i:3:d:10.1057_s41310-017-0020-0. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.