Economic Consequences of Accounting Standards: Implications for the Saudi Organization for Certified Public Accountants (SOCPA)

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dc.contributor.advisor Tippett, Mark
dc.contributor.author Al-Moghaiwli, Mohammed Hamed
dc.date.accessioned 2010-01-21T11:41:45Z
dc.date.available 2010-01-21T11:41:45Z
dc.date.issued 1999
dc.identifier.uri http://hdl.handle.net/2160/4018
dc.description.abstract This study aims at collecting empirical evidence on whether or not financial accounting standards which exist in the Kingdom of Saudi Arabia give rise to economic consequences. Awareness of the potential economic consequences of accounting standards emerged first in the United States of America in the 1970s, but increasingly has attracted a great deal of attention in many different countries over the last twenty years. The impact of accounting standards on management behaviour has been cited as one of the consequences. Factors that affect management's attitudes in choosing among alternative accounting methods are established through the political cost theory and the contracting and agency theories. Using these theories, this study hypothesises that company size, the presence of Government debt and/or donations, the ratio of foreign employees to total employees, the presence of management compensation plans, and insider ownership provide incentives for the management of Saudi joint stock companies to adopt income-increasing or - decreasing accounting policies. The results of the univariate and multivariate tests show that company size, ratios of foreign employees to total employees, and insider ownership are significant determinants of inventory, research and development, and Zakat policies. These findings provide empirical support for the principal hypothesis of this thesis. That is, accounting standards which exist in Saudi Arabia give rise to economic consequences and managers of companies consider these consequences when selecting accounting policies. In summary, this principal conclusion is of critical importance to the Saudi Organization for Certified Public Accountants (SOCPA), given that accounting standard setting processes are still in their early stages of development. It supports the view that SOCPA should acknowledge the possible adverse economic consequences that may result from its accounting standards decisions. In fact, the results of this study justify, in the very least, a wider and more detailed study by SOCPA of the economic effects of its potential accounting standards. The findings may also call into question the financial accounting standards which have been recently promulgated in Saudi Arabia. en
dc.language.iso en en
dc.publisher Aberystwyth University en
dc.title Economic Consequences of Accounting Standards: Implications for the Saudi Organization for Certified Public Accountants (SOCPA) en
dc.type Text en
dc.publisher.department Management and Business en
dc.type.qualificationlevel doctoral en
dc.type.qualificationname PhD en
dc.type.publicationtype thesis or dissertation en


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