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IFRS and Saudi accounting standards: a critical investigation

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  • 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
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    References listed on IDEAS

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    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.
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    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.

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