Accounting systems in Saudi Arabia was shown to be imported from developed countries. Although in Saudi Arabia, the accounting principle and structures were primarily constructed from Western countries, the new accounting system has been reformed to adapt the unique Saudi Arabian environment. The various factors might explain how the new accounting system emerges. This paper will analyze how the three main factors-economy environment, taxation policies and foreign accounting standards and principles affect accounting systems in Saudi Arabia.
2. Economy environment
The commodities of the natural resources have enormous impact on accounting system in Saudi Arabia. Nature products involve minerals, oil and nature gas. According to the Organization of the Petroleum Exporting Countries (OPEC, 2013), 18% of the world’s proven petroleum was discovered in Saudi Arabia. Saudi Arabia now ranks as the largest exporter of petroleum (OPEC, 2013). The oil and gas account for nearly 50 per cent of gross domestic product. Although Saudi Arabia has the largest continuous sand desert all around the world, the earnings of oil and gas occupy most of its export revenues. Because the national revenue in Saudi Arabic rely on the export of petroleum, the revenue valuation focus on the annual production and the global price fluctuation, which is different from other developed countries like U.K. and U.S.A.
Before the oil was discovered in Saudi Arabic, the accounting system did not record the oil revenue. At that time, Saudi Arabic was highly dependent on the basic activities, such as fishing, pearling, agriculture, ship-building and commerce. Although people record the amount or the volume of each production they made in different...
... middle of paper ...
... Accounting and Finance, School of Management The University of Hull
2. Al-Aqeel, E (2013) Historical Introduction On Accounting and Auditing Profession in Saudi Arabia , King Saud University 2nd Semester , 1426-1427
3. SOCPA (2013) Saudi Organization for Certified Public Accountants [WWW] Available from: http://www.socpa.org.sa/Home/Homepage/About-us?lang=en-US [Accessed03/11/13]
4. KPMG (2011) Saudi Arabic [WWW] Available from: http://www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/Documents/thinking-beyond-borders-2011/ies-tbb-2011-saudi-arabia.pdf [Accessed09/11/13]
5. TaxRates.cc (2009-2012) Saudi Arabia Tax Rates [WWW] Available from: http://www.taxrates.cc/html/saudi-arabia-tax-rates.html [Accessed08/11/13]
6. OPEC (2013) Saudi Arabia facts and figures [WWW] Available from: http://www.opec.org/opec_web/en/about_us/169.htm [Accessed12/11/13]
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- The overall objective of this research is to study which the critical success factors that are necessary for achieving success for a small business in Kingdom of Saudi Arabia. Small Business Enterprise or Small-Medium Enterprise (SME), in today's business environment, faces a lot of daily major challenges. Balancing the SME’s effort to address these challenges can be an intimidating task, unless a systematic approach is identified and followed. Recently, SMEs started moving towards the utilization of business success which enables SMEs to learn how to continuously improve the utilization of resources to achieve better productivity and performance.... [tags: Business Management ]
852 words (2.4 pages)
- Chapter 1: Introduction 1.1 Background to the research The construction industry in the Kingdom of Saudi Arabia (KSA) is moving through a process of adaptation to a new environment of economical change. With the change in the KSA economic driving force, the construction sector is driven by competitive pressure to adapt to the recent market requirements and government regulations. The world is also in a continuous state of change and no one is exempt from this process. Increased worldwide competition, technology innovations, insufficiency of resources, all exerts a major pressure in adopting new technologies.... [tags: Saudi Arabia ]
533 words (1.5 pages)
- Introduction In the last century women worldwide have taken great strides in the Women Suffrage Movement. This progressive movement has given women the opportunity to have their voice heard and their ideas projected through voting. As of 2011 however, there are still 3 countries that still currently deny their women the right to vote one of which being Saudi Arabia. Saudi Arabia is a country that has been immensely impacted by strict gender segregation laws sanctioned by the absolute monarchy. For a while it seemed as if Saudi Arabia was not moving in a progressive direction in terms of the Women Suffrage Movement.... [tags: Gender Studies, Saudi Arabia]
1914 words (5.5 pages)
- Exposing the Saudi Arabian Royal Family, U.S. foreign policy, and the poverty currently occurring within Saudi Arabia Preface The current world dependence on oil leaves much to be said about the impact of Saudi Arabia and the Middle East on foreign policy and international politics. Presently the world's largest consumer of oil, the U.S. depends on Saudi Arabia and much of the Middle East for the energy to run its businesses, its homes, and most importantly, its automobiles. In the past few months U.S.... [tags: Essays Papers Oil Saudi Arabia Papers]
4092 words (11.7 pages)
- The American Saudi-Alliance: Delaying the Inevitable. The informal alliance between the United States of America and Kingdom of Saudi Arabia will inevitably collapse. Since initial cooperation in 1943, when American President Franklin D. Roosevelt declared the defence of Saudi Arabia as critical to American interests, the alliance has continued to deteriorate. By developing its capabilities, America is acquiring the means to gather sufficient supplies of oil without having to depend on Saudi oil production.... [tags: U.S.-Saudi Relations Essays]
3057 words (8.7 pages)
- Over the past 200 years, mankind discovered the fossil fuels and they used this source to produce hug energy. This affects the environment in many negative ways and caused many issues worldwide such as urban air pollution and acid rain, oil spills and the high temperature of earth. Saudi Arabia has the biggest oil reserves in the world by 19.66% (the world factbook, 2011) and the second oil producer country in the world with roughly 10.121 million barrels a day – which account for 12% of the total world production of oil in 2010 (Fontinelle,2011).... [tags: Environment, Oil]
1656 words (4.7 pages)
- In recent years, the number of Saudi students who have gone to study abroad for purposes of higher education has increased. Students, especially females, who want to continue higher education, face some problems that stand in the way of their education. A study carried out by Lasoda & Awotedu (2014, 103) found that, 'having to study poses challenges for women due to their family responsibilities and several challenges arise when individuals tend to negotiate the role of university students with their role inside of marriage and the family'.... [tags: saudi arabian women, performance]
1615 words (4.6 pages)
- Abstract Saudi Arabia is one of the few countries that set specific laws regarding women only. A woman is considered to be a second class citizen who must depend on a male relative in all situations. Until recently, women did not have their own identification cards separate from those of their fathers' or husbands'. Women were also limited to certain levels of education such as elementary or secondary school levels. More than that, they were restricted to limited job opportunities. The laws also prohibit a woman from driving a car regardless of her age or whatever situation she may face.... [tags: Saudi Arabia]
5810 words (16.6 pages)
- In the heart of the Middle East is a country known by many Westerners for its oil production and, often, extremist beliefs of groups within the country. The country is Saudi Arabia, and though it is thought of by many as a rather backward country, Saudi Arabia has a rich history and culture, and it is a country that revolves around Islam and the worship of Allah as the one true God. For about fifteen hundred years, Saudi Arabia’s history has centered on one major theme: Islam. Muhammad, the founder of Islam, was born around 570 A.D.... [tags: essays research papers fc]
925 words (2.6 pages)
- Saudi Arabia Geography The Kingdom of Saudi Arabia, occupying most of the Arabian Peninsula, is located in the southwestern corner of Asia. It covers an area about one-fourth the size of the United States. More than half of its total area is desert terrain. The capital of Saudi is Riyadh, which is located in the central region of the country. Language Saudi Arabia's official language is Arabic, although English is also spoken in the Kingdom, most commonly in the business community. Religion The official religion of Saudi is Islam.... [tags: Papers]
618 words (1.8 pages)