Comparison between Saudi Accounting Standards (SOCPA) and IFRS Dissertation

Comparison between Saudi Accounting Standards (SOCPA) and IFRS - Dissertation Example Comparison between Saudi Accounting Standards (SOCPA) and IFRS.The present unrelenting global recession that originated from the US and extended globally revealed the nascent close links that existing amongst international financial and economic sectors.The present unrelenting global recession that originated from the US and extended globally revealed the nascent close links that existing amongst international financial and economic sectors. The wayward acts of business leaders aided by aberrant accountants as depicted in the Enron and WorldCom scandals in 2001 and the subprime mortgage crisis exposed that financial accounting practices have to be strictly scrutinized globally to avoid any such repetition. Subsequently the diverse local accounting associations in accord with the International Accounting Standards Board (IASB) led by the EU instigated the International Financial Reporting Standards (IFRS) (Yoon, 2009). These novel guidelines were intended to have harmonised standardiz ed regulations to steer accountants and organisations worldwide. However, the implementation of IFRS has met a raft of challenges in assorted jurisdictions including the Kingdom of Saudi Arabia due to cultural, social-economic and religious beliefs. The accounting history in Saudi Arabia can be traced to the 14th Hijri century (1930) when through a royal decree it was established that accounting records should be upheld. The issuance of CPA regulations commenced in 1974 and the Saudi Organization for Certified Public Accountants (SOCPA) was initiated in 1992 through a royal decree No.M12... The issuance of CPA regulations commenced in 1974 and the Saudi Organization for Certified Public Accountants (SOCPA) was initiated in 1992 through a royal decree No.M12 (SCOPA, 2011). SOCPA has been responsible for developing and setting accounting standards or compliance with the generally accepted accounting principles (GAAP) of Saudi Arabia as well as CPA exams, training, research, publications etc (Al-Aqeel, 2009). Keywords SOCPA-GAAP, Shariah and Islamic financial model, IAS/IFRS standards, standardisation Research Question What are the main areas of divergence and convergence between the Saudi Organization for Certified Public Accountants (SOCPA) and the International Accounting Standards (IAS) and International Financial Reporting Standards  (IFRS) standards? Aims This study aims at establishing a comparison between the SOCPA accounting standards and the IAS) and IFRS and probable evolution of SOCPA standards in view of the adoption of the universal international guidelines . The study will thus explore the convergence and divergence of the two standards in addition to examining the historical evolution of the accounting and auditing fields in Saudi Arabia. A critical scrutiny of the available literature as well as comprehensive field study will be conducted amongst organisations operating within the country. The Objectives of the Research This study will attempt to cover the gaps in previous studies that have scantily covered the region while offering recommendations on areas that can be transformed for more effective standardisation as well as for further studies. The study will therefore endeavour to understanding the convergence and divergence between