Impediments and reasons for non-compliance with the accounting disclosure requirements by Saudi corporations: (An empirical study)

Abstract

This study aims at identifying the Impediments and reasons that stand in the way of the overall compulsory requirements of the accounting disclosure by Saudi Arabian corporations. In order to achieve the goals of the study, the opinions of a sample that play a major role in applying the accounting standards were surveyed. The study revealed that the most important reasons of not adhering to those standards were the weakness of the enforcement mechanism, the weakness of the teaching programs and the shortage in qualified accountants. In addition, the results attributed the reasons to the lack of understanding the concepts and objectives of accounting. Furthermore, no important role has been given to those in the private sector when deciding what standards suit them best. In order to overcome these reasons, the study recommended that the Ministry of Commerce or its representatives should remind all companies with the compulsory requirements and the need for applying strong measures of punishments in the event that it was found that they do not adhere fully with these requirements. The study also recommended creating a supervisory and monitoring unit (surveillance unit) to make sure that the accounting disclosure standards are fully implemented. Moreover, in to improve the standard of commitment the study suggested intensive on going teaching programs for publicizing the concepts and objectives of accounting as well as the standards of accounting disclosure. In order for the private sector to respect and adhere to accounting disclosure, the study recommended giving this sector a more significant role in deciding the standards that suit them at all stages of development, revision and implementation of those standards.