Compliance with Requirements of International Financial Reporting Standard for Small and Medium-sized Entities Approved in the Kingdom of Saudi Arabia: An Exploratory Study

Abstract

The purpose of this study is to reveal the extent of commitment to apply the requirements of International Financial Reporting Standard to small and medium-sized entities approved in Kingdom of Saudi Arabia and to reveal the statistically significant differences between opinions of study sample members due to the two variables, i.e., years of experience and the job title regarding the extent of commitment to applying standard requirements.
A questionnaire consisting of a set of statements was implemented to measure the study variables.
This study was conducted on a stratified random sample. The field study was conducted on a random accessible sample of 356 individuals of financial managers, accountants and internal auditors working in small and medium-sized entities that apply the standard, and a sample of legal auditors in Riyadh.
The study indicates that there is a commitment to apply the requirements of the International Financial Reporting Standard to small and medium-sized entities approved in the Kingdom of Saudi Arabia. However, the application of requirements was uneven, as it was high in the field of accounting recognition and measurement, whereas it was moderate in the presentation of the financial statements and the application of accounting disclosure requirements in the financial statements.
This is one of the first studies that dealt with the extent of compliance with the requirements of International Financial Reporting Standard for small and medium-sized entities approved in the Kingdom of Saudi Arabia.
The current study is limited to the financial managers, accountants and internal auditors working in small and medium-sized entities, and the legal auditors in Riyadh.