Financial Markets, Institutions and Risks (FMIR)
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Item A defense on accounting discretion: an empirical inquiry based on users’ awareness(Sumy State University, 2022) Alharbi, A.M.; Al-Adeem, Khalid RasheedCorporate performance is a key in corporate accounting. One of the earliest accounting measures of corporate performance is accounting income. Accrual accounting enables the measurement of changes in net assets of an entity. Accounting income is neither scientifically determined nor proven. Accounting information often results from approximation and estimation when choice among alternatives is professionally judged, rather than exact measures and perceptions. Divergence in application of accounting policies in corporations under similar conditions may present different results. Some criticize corporate accounting, particularly after scandals related to financial statement fraud, for choices among procedures that accounting standards permit. However, choices in the application of accounting permitted procedures that accounting standards allow are based on professional judgment. Professional judgment enables accounting as a profession and allows accounting professionals to claim status in their respective communities. Exploring users’ awareness of corporate reports in Saudi Arabia in terms of flexibility in using accounting methods when preparing corporate reports and analyzing their understanding of corporate reports, this study surveyed 72 financial statement users. Research has found that sufficient efforts must be made to obtain information when making investment decisions. As accounting income is a result of applied accounting procedures and methods, users perceive information published in the financial reports, including notes, as understandable. Flexibility in applying accounting standards is imperative for adapting to changes in the entity’s business environment. Potential capital market investors must maintain a minimum level of knowledge; otherwise, they might be gambling their wealth or savings against the odds.Item Empirically Investigating Saudi Arabian Accountants’ Readiness to Implement IAS 2(Sumy State University, 2017) Al-Mousa, Muna Ali; Al-Adeem, Khalid RasheedThis study focuses on practicing accountants in Saudi Arabia to examine their readiness to adopt the mandatory International Financial Reporting Standards (IFRS). More specifically, it investigates the International Accounting Standard for Inventories, an indicator for accountants’ understanding of IFRS requirements. To do so, we conduct an online questionnaire survey, which reveals that 52.27% accountants may not be ready for IFRS implementation. The lack of knowledge about certain IAS 2 requirements raises further concerns about accountants’ readiness to implement more complicated IFRS, some of which have no comparable local financial accounting standards. These findings draw attention to the effectiveness of IFRS training courses. Further, 57.20% accountants, all of whom reviewed the Saudi Organization for Certified Public Accountants’ (SOCPA) website, provided appropriate answers, indicating SOCPA’s significant contribution toward the spreading of awareness and knowledge about IFRS. Our findings have implications for practitioners and accounting regulators as well as bodies responsible for standardizing accounting practices in Saudi Arabia. In particular, they suggest steps necessary to increase accountants’ readiness for IFRS adoption, which became mandatory since January 1, 2017, for all listed companies. In conclusion, this study serves as a foundation for future research on the topic, which can be extended to the realm of auditors, and obstacles confronting accountants in IFRS implementation.