The Impact of IFRS on Accounting Education in Saudi Arabia

The implementation of International Financial Reporting Standards (IFRS) in the Saudi economy has presented the higher education field with new challenges and opportunities. With the advancement of the business sector in the country and its entrance into the global market, the new requirements guide the development of educational approaches. The preparation of students for the demands of the labor market must be aligned with the new standards. The present literature review examines contemporary scholarly publications and studies investigating the quality of Saudi accounting education and its ability to shift toward new standards to satisfy the expectations of the labor market.

A significant number of scholarly publications pay particular attention to the assessment of the quality of Saudi accounting education against its ability to meet the international standards and the requirements of the labor market inside the country. Overall, the importance of implementing and enforcing IFRS in both accounting workplace and education is validated by the growth of the business sector and the number of companies. As demonstrated in Figure 1 (See Appendix 1), the recent growth in the number of listed Saudi companies is likely to attract more international investors if the country implements IFRS (Nurunnabi, 2018).

Moreover, as found by Mah’d, and Mardini (2020), the quality of accounting education in Middle Eastern and North African countries is insufficient when assessed against contemporary standards. In particular, these countries’ universities do not employ international educational standards and fail to prepare competent and skilled accountants (Mah’d and Mardini, 2020). This study found that the representatives of these regions’ academic settings anticipate future changes and improvements of educational systems to fill the gap and meet the international requirements. Similar quality-related findings have been reported by Srdar (2017), who has identified the gap between learning and teaching in accounting education. In particular, the quality of knowledge and practical skills observed in the graduates of Saudi Arabian universities does not match the demand and overall expectations of the labor market. In its turn, employers expect universities to train their students appropriately, so that prepared candidates apply for jobs in the future.

There have been several attempts made to improve the quality of education by implementing alternative methods of teaching. As reported by Bilal and Abdelrhman (2021), one of such apporoaches is an extensive implementation of E-learning. This method helped to increase the level of access to education and the overall quality of students’ outcomes by bridging the gaps in learning capabilities and teaching offer and helping students overcome some obstacles to learning (Bilal and Abdelrhman, 2021. However, in regards to the quality of specifically accounting outcomes, no particular improvements have been identified. This tendency might be explained by the failure of universities to update their curricula in accordance with international standards in both education and accounting.

Indeed, such an assumption might be validated by the findings of Senan (2019), who identified that the demands for accountants’ skills under the pressure of the recent updates in education and accounting are subject to continuous complications and improvement. According to the scholar, “the skills required by accountants have changed drastically due to the present fiercely dynamic business environment and the adaption of IFRS,” which is why “they do more than keeping numbers and often serve as consultants to the top management” (Senan, 2019, p. 1921). Overall, the quality of accountants’ skills had been satisfactory before IFRS had been implemented, although the overall development of accounting needed improvement. As researchers agree, the introduction of IFRS to the Saudi economy is cost-effective and provides multiple benefits in the long run (Albaradei, Almushaiqeh and Almalki, 2021; Herath and Alsulmi, 2017; Nurunnabi, 2017; Nurunnabi, 2018). Moreover, students in Saudi Arabia are more willing to pursue accounting careers since this profession becomes more advanced and demanded guidance by international standards (Ebaid, 2020). Students also positively perceive modernized educational methods, which help them advance their skills (Trabulsi, 2018).

The advice of the current scholarly literature in relation to the improvement of Saudi Arabian universities’ accounting education is based on evidence from other spheres such as business schools and the particular observation of Saudi labor market specifics. Since similar to accounting education, the business school also faces challenging in preparing competent candidates for employers, the methods for bridging the gap in learning and teaching in business school settings might be applicable to accounting (Zureigat, AlMotairy, and Abdullah, 2019). As the researchers note, there should be three aspects addressed by university authorities and administration to improve the quality of education, namely new content, new perspectives on existing content, and new teaching methods (Zureigat, AlMotairy, and Abdullah, 2019).

In addition, Ibeaheem, Elawady, Ragmoun (2018) suggest that there is a need “to find a kind of coordination and continuous development between university and business owners in order to foster cooperation and provide the right type of graduates” (p. 77). In such a manner, the universities will be able to adjust their curricula to the demands of the organizations, thus providing them with skilled and competent graduates. Furthermore, the new curricula should include the emerging demands toward accounting students’ skills, which expand beyond practical ones, and include such generic skills as cognitive and behavioral (Senan, 2019). As shown in Figure 2 (See Appendix 2), these skills include interpersonal communication, abilities to analyze and evaluate information, manage, interpret, and report data, and others.

In summation, the conducted review of scholarly literature indicates that the overall state of Saudi accounting education does not meet the requirements of the local labor market. The implementation of IFRS that is aimed at the improvement of the economy in the country becomes both an obstacle and an opportunity for Saudi Arabian accounting universities to develop. Through updating of curricular, implementation of new learning content and teaching methods, as well as cooperation with the organization, accounting educational institutions will be able to fill the gap and satisfy the students’ desire and employers’ need for high-standard accounting skills.

References

Albaradei, A. G., Almushaiqeh, A. T. and Almalki, A. A. (2021) ‘Preventing financial fraud in Saudi Arabia: A suggested framework, Arab Journal for Scientific Publishing, 2663, p. 5798.

Bilal, A.O. and Abdelrhman, M.A. (2021) ‘The effectiveness of E-learning in enhancing the quality of accounting eductaion in Saudi Universities: A case study on Princess Noura bint Abdul Rahman University’, PalArch’s Journal of Archaeology of Egypt/Egyptology, 18(4), pp.1516-1532.

Ebaid, I.E.S. (2020) ‘Accounting students’ desire to work as Certified Public Accountants (CPA): Empirical evidence from Saudi Arabia. International Journal of Auditing and Accounting Studies, 2(2), pp. 193-211.

Herath, S. K. and Alsulmi, F. H. (2017) ‘International financial reporting standards (IFRS): The benefits, obstacles, and opportunities for implementation in Saudi Arabia’, International Journal of Social Science and Business, 2(1), pp.1-18.

Ibeaheem, H. A., Elawady, S. and Ragmoun, W. (2018) ‘Saudi Universities and higher education skills on Saudi Arabia’, International Journal of Higher Education Management, 4(2), pp. 69-82.

Mah’d, O. A. and Mardini, G. H. (2020) ‘The quality of accounting education and the integration of the international education standards: Evidence from Middle Eastern and North African countries’, Accounting Education, pp.1-21. Web.

Nurunnabi, M. (2017) ‘IFRS and Saudi accounting standards: A critical investigation’, International Journal of Disclosure and Governance, 14(3), pp.191-206.

Nurunnabi, M. (2018) ‘Perceived costs and benefits of IFRS adoption in Saudi Arabia: An exploratory study’, Research in Accounting Regulation, 30(2), pp.166-175.

Senan, N. (2019) ‘Convenience of accounting education for the requirements of Saudi labour market: An empirical study’, Management Science Letters, 9(11), pp.1919-1932.

Srdar, N. A. (2017) The gap between learning and teaching in accounting education: The Saudi Arabian experience (Doctoral dissertation, University of Portsmouth).

Trabulsi, R.U., 2018. ‘Accounting students’ attitudes toward traditional and modern teaching methods: The Saudi context’, Academy of Accounting and Financial Studies Journal, 22(5), pp. 1-6.

Zureigat, Q., AlMotairy, O. and Abdullah, F. Z. B. (2019) ‘Business School curriculum and impact: A Saudi case’, Journal of Entrepreneurship Education, 22(4), pp.1-11.

Appendices

Appendix 1

Number of companies listed on the Saudi stick exchange.
Figure 1. Number of companies listed on the Saudi stick exchange. Source: Nurunnabi, 2018, p. 170.

Appendix 2

Framework of generic skills.
Figure 2. Framework of generic skills. Source: Senan, 2019, p. 1920.

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NerdyRoo. (2022, August 17). The Impact of IFRS on Accounting Education in Saudi Arabia. Retrieved from https://nerdyroo.com/the-impact-of-ifrs-on-accounting-education-in-saudi-arabia/

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"The Impact of IFRS on Accounting Education in Saudi Arabia." NerdyRoo, 17 Aug. 2022, nerdyroo.com/the-impact-of-ifrs-on-accounting-education-in-saudi-arabia/.

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NerdyRoo. "The Impact of IFRS on Accounting Education in Saudi Arabia." August 17, 2022. https://nerdyroo.com/the-impact-of-ifrs-on-accounting-education-in-saudi-arabia/.

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NerdyRoo. 2022. "The Impact of IFRS on Accounting Education in Saudi Arabia." August 17, 2022. https://nerdyroo.com/the-impact-of-ifrs-on-accounting-education-in-saudi-arabia/.

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NerdyRoo. (2022) 'The Impact of IFRS on Accounting Education in Saudi Arabia'. 17 August.

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