This study aims to explore the connection between quality accounting education and high standards of accounting practice in Saudi Arabia. The goal is to find out whether accounting education plays any role in strengthening Saudi Arabia’s economy in line with the country’s Vision 2030. In 2012, Saudi Arabia adopted the International Financial Reporting Standards (IFRS) to attain global accounting standards. However, studies show that the curricula of the higher education institutions have not been modified to integrate IFRS. The researcher will compare accounting education offered at Dammam University to the accounting education in other institutions in Saudi Arabia before making recommendations for Dammam. The research seeks to explore how the country can benefit from improved accounting education to attain quality standards, which may boost the country’s economy. The study will take economic, psychological, and sociological approaches to account for education (Wilson, 2014). The researcher believes that high accounting standards can facilitate the achievement of Vision 2030 in Saudi Arabia. Consequently, the research will gauge academic education and professional training to determine, which is better in furthering Saudi Arabia’s Vision 2030.In only 3 hours we’ll deliver a custom Accounting Education and Practice in Saudi Arabia essay written 100% from scratch Get help
Accounting involves the systematic recording of the financial transactions of a business. It may also involve the aspect of summarising and reporting such transactions to oversight bodies. Oversight bodies include auditors and tax collection agencies. Therefore, accounting is a key function for every business since it helps to keep track of the movement of finances. The roles played by accountants in a government ministry include financial reporting, data collection, assurance services, and internal and external auditing (GetieMihret & WondimYismaw, 2007).
Information is an important asset for the government of any country. Economies can benefit from accurate and reliable data regarding financial matters. Emerging economies face difficulties in attempting to attain sustainable economic growth by formulating and implementing development plans. These developments depend greatly on relevant and reliable information regarding the economy. However, the role of accounting information in assisting in developing and implementing economic decisions has received criticism. Critics such as Unver (2014) regard accounting information as deficient, irrelevant, and, sometimes, lacking enough credibility due to the absence of properly defined reporting procedures and mechanisms.
Saudi Arabia is in the process of formalizing its accounting and auditing mechanisms. However, the role of these mechanisms in shaping decision-making on financial matters is not widely recognized. The result is often that financial reporting does little to influence investment decisions and/or how resources are allocated. As a result, investors are then less inclined to provide the necessary capital to invest in the country.
This research seeks to investigate whether the place of accounting education in shaping how financial decisions are made in Saudi Arabia can help to boost the country’s economy and hence contribute to the attainment of its Vision 2030. Additionally, this research will offer a comparison between academic (accounting] education) and professional training to evaluate the one, which would be more effective in facilitating Saudi Arabia’s dream. The country has over 34 universities offering accounting education. The high number of institutions offering accounting education explains how important the profession is to the economy of the country.
Research problem statement
While Saudi Arabia ranks high (position 19) in the world regarding accounting standards, it still ranks considerably lower when to compared to countries with similar GDPs. Importantly, despite having many tertiary institutions offering accounting education, the country still registers dismally regarding the quality of education. Saudi Arabia is currently ranked positions 37 and 45 regarding the quality of math education and quality of management schools, respectively (AlMotairy, 2013). These ratings are low for a country with a huge GDP as Saudi Arabia. The researcher believes there is a strong link between the low quality of education and the not-so-impressive auditing and reporting standards of the country and consequently the poor economy.
Purpose of the research
The purpose of this research is to explore the nexus between the quality of accounting education and the current accounting standards in the country. Further, this research seeks to show that accounting education will play a key role in promoting the achievement of Saudi Arabia’s Vision 2030. In other words, by improving the quality of accounting education, Saudi Arabia will be better placed to pursue its Vision 2030 goals. Therefore, the researcher intends to offer a holistic assessment of the current accounting education curriculum. Areas of concern include the curriculum itself, the question of gender, ensuring sustainability, as well as an appraisal of the recent developments. The research also intends to offer a comparison between the current standards in the United Kingdom to those of Saudi Arabia.Academic experts
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The following key research questions have been proposed for this study:
- Does quality accounting education at Dammam University reflect the national auditing and reporting standards?
- How do accounting standards in other institutions of higher learning compare to those of Dammam University?
- Is the current accounting education in Saudi Arabia effective?
- Is Will improving the quality of education in Saudi Arabia facilitate its economic development and hence the achievement of its Vision 2030?
The purpose of this research is to explore the role of accounting, specifically, accounting education in Saudi Arabia. The study will focus on the existing status of accounting to predict how improving accounting education can transform the status of the country. This study does not seek to assert that accounting is the single most significant element of economic advancement. Nevertheless, it will show that accounting plays a key role in the process of development. This research will explore the said role. The researcher expects that the results of the study will attain several objectives, which include:
- To determine whether accounting is a reflection or a product of the environment
- To investigate whether accounting education has a positive role in the economic advancement of any country
- To show that the present accounting system does not rhyme with the changing economy of Saudi Arabia, as well as the economic development of the country.
The rationale of the research
The researcher is of the view that understanding the relationship between the current accounting standards and the quality of education will be of great help to policymakers in shaping future courses of action. Relating accounting education directly to the accounting standards is something that has not been done before in Saudi Arabia. Therefore, this research is unique since it brings out a new outlook on the Saudi Arabian economy through enhanced accounting education. The researcher hopes to come up with formidable recommendations at the end concerning the strategies that the country can put in place in its education system to realize its Vision 2030. The researcher strongly believes that Saudi Arabia’s key to achieving its Vision 2030 is a good accounting system. Therefore, to achieve this accounting system, proper education is needed. The researcher further acknowledges the need for more research in the field to explore the connection between accounting standards and the quality of education in Saudi Arabia.
Accounting has an indispensable role in the modern-day economics. Every society needs a form of financial information to sustain itself. Therefore, accounting plays this vital role of availing information, which is used for financial planning and control. The recent increase in commercial transactions and industrialization in emerging economies should drive countries to pay keen attention to the importance of accounting for their economic development. Despite the fact that many individuals and organizations recognize the importance of efficient capital utilization in achieving rapid industrialization, little focus is given to the potential positive impact of accounting education in promoting the fulfillment of Saudi Arabia’s development plans.
Yusoff, Othman, and Yatim (2014) assert that any systematic effort to raise the quality of accounting in a developing country should be based on accurate studies aimed at identifying needs that are specific to the respective country (Ismael & Babiker, 2016). Such studies should also be used to identify the particular accounting needs of the country regarding its economic development. The knowledge of accounting that is specific to a particular country is critical because many developing countries have been shown to lack awareness regarding the significance of accounting for economic development.
The choice of this topic was inspired by the researcher’s desire to understand why Saudi Arabia’s accounting standards rank lower compared to its counterparts with similar Gross Domestic Product (GDP). The researcher had observed that the education standard of the country is even lower, ranking below countries with considerably lower GDPs. Therefore, it occurred to the researcher that low-quality accounting education could be undermining the country’s progress in raising its accounting standards to be at par with those of its peer countries. Therefore, the researcher believes that the findings of this study will help the relevant authorities in upgrading the existing institutions to match the current demand for a quality accounting. These institutions include government financial authorities and education centers that are currently offering accounting studies.
Importance of quality accounting for the economy
Little research has been done regarding the impact of quality accounting on the economic development of Saudi Arabia (Al-Twaijry, Brierley & Gwilliam 2003; Al-Twaijry, Brierley & Gwilliam, 2004). This section will seek to identify literature that explains how accounting standards are related to economic advancement. The literature review further seeks to explore the nexus between accounting education and the bookkeeping standards of a country. Special emphasis is deliberately given to emerging economies because Saudi Arabia is among the upcoming economic nations.15% OFF Get your very first custom-written academic paper with 15% off Get discount
Taufu’i (2006) reveals how quality accounting standards are imperative in promoting the economic development of a country, particularly those classified as emerging economies. Relevant and reliable accounting information assists countries to make informed financial decisions (Arena, Arnaboldi & Azzone, 2006). Auditing, both external and internal, is particularly important in estimating a country’s financial progress, as well as monitoring how finances are being utilized (Ahmad et al. 2009; Yee et al. 2008). The common practice of performing internal audits emerged in the 1940s. Auditing had become an important tool in monitoring progress in financial institutions (Yee et al. 2008; Al-Shammari, Brown & Tarca, 2008). Government institutions also rely on internal auditing to determine how finances are moving across the government’s departments (GetieMihret, James & Mula, 2010). Auditing, whether external or internal, requires excellent accounting skills. Arena, Arnaboldi, and Azzone (2006) also recognize internal auditing as an important tool for monitoring the financial status of institutions. Failure to maintain strong auditing mechanisms not only threatens a country’s GDP but can also lead to the bankruptcy of financial institutions.
Getie, James, and Mula (2010) argue that organizational performance depends on formidable financial reporting mechanisms. Because the financial departments of a government function in much the same way as corporate institutions, they can benefit immensely from internal audits. Neu, Everett, and Rahaman (2013) have also identified the importance of auditing in stemming out undesired practices such as corruption. Internal auditing can add value by assisting organizations to attain economic effectiveness and efficiency. Therefore, accounting experts believe that financial reporting adds value not only by preserving the existing worth but also by preventing capital wastage through fraudulent activities and operational inefficiency. Neu, Everett, and Rahaman (2013) also believe that internal audits minimize the expenses incurred when contracting external contractors. Additionally, proper accounting standards can help organizations to augment the productivity of labor, thus increasing the return on capital invested (Crawford, 2013).
Accounting practice is effective if it meets the intended outcome that it is expected to bring about (Getie & Wondim, 2007). Getie and Wondim (2007) argue that accounting practice in the public sector should be evaluated based on the extent to which it avails relevant and reliable accounting information. If applied effectively, accounting information can lead to the identification and correction of problems early. Alzeban and Gwilliam (2014) assert that the traditional role of internal auditing in Saudi Arabia is primarily concentrated around monitoring financial compliance and internal control. However, the role of internal auditing has expanded in importance during recent times to assume a consulting role within the risk management departments (Alzeban & Gwilliam, 2014). The researcher presumes that this shift in significance implies the growing importance of accounting as a practice in Saudi Arabia’s public sector.
Alzeban and Gwilliam (2014) carried out a study to establish the qualifications of employees who work in financial departments in Saudi Arabia. The country’s public sector is keen on ensuring that accountants and auditors possess the required qualifications. Of all the employees involved in the study by Azeban and Gwillam (2014), 63% reported that they had a Bachelor’s Degree in accounting. Haniffa and Hudaib (2007) argue that proper accounting practices reinforce trust in financial reporting. According to Sale, Salter, and Sharp (2007), striving to achieve international accounting standards is of great importance to emerging economies. For instance, Egypt has benefited from opening up its economy and adopting Western accounting practices.
Role of Accounting Education
In 2012, Saudi Arabia announced its intention to shift to international financial reporting standards (IFRS) (Albader, 2015). This announcement by SCOPA has made it necessary to carry out studies aimed at identifying the impact of such a transition. Of importance are the mechanisms that educational institutions plan to incorporate, namely, IFRS, into the existing curriculum to raise accounting standards. According to Coetezee and Schmulian (2012), the business environment has witnessed transformation worldwide due to the rapid advancement in technology and globalization. As a result, the skills expected of accounting graduates require a major shift to adapt to the changing market. Traditionally, employers have criticized accounting education as not being adequate to match the demand of the job market (Bui & Porter, 2010). In addition, efforts by the International Accounting Standards Board (IASB) body to create a uniform IAS has resulted in an additional need to advance reforms to the current accounting education (Tyrrall, Woodward & Rakhimbekova, 2007). Therefore, the need to prepare accounting graduates to match the existing market demand for qualified accountants is obvious (Albader, 2015).
Jackling, Howieson, and Natoli (2012) opine that raising accounting standards will not just influence future accountants but will also facilitate the development of current accountants. According to Alkhtani (2010), external auditors have expressed concerns regarding the qualifications of the current accountants. This claim evidences that accounting institutions are not producing qualified graduates, especially with respect to IFRS. Professional judgment is crucial when applying certain IFRS standards. As a result, it is important to emphasize quality accounting education, especially based on its role in boosting the economy of a country such as Saudi Arabia (Alkhtani, 2010). Alberdan (2015) took the view that lack of expertise and skills among professional accountants can be attributed to the absence of effective training by institutions that offer accounting education. AlMotary and AlTorky (2012) found that over 65% of all universities surveyed had not incorporated IFRS within their accounting curricula. The United Nations Conference on Trade and Development (2008) has also cited lack of appropriate education as one of the major challenges bedeviling the process of implementing IFRS. AlMoitairy and Stainbank (2014) discussed the need for appropriate training of professional accountants according to international education standards (IES). Consequently, adopting a strong professional accountancy training program can help to resolve some of the challenges facing the adoption of international accounting standards in Saudi Arabia.
The choice of research design, as well as data collection methods, has a great impact on the quality of data that is gathered in any given study. Subsequently, the design affects the research findings and outcomes. Therefore, it is important to adopt the most suitable research design and data collection methods. The methodology should also reflect time limitations, resources available, the research scope, and target population (Sekaran & Bougie, 2010). This study will rely on mixed methods design, which appreciates the use of both quantitative and qualitative data (Creswell & Clark, 2011). This study targets to gather primary data from accounting scholars as to the initial target group. For this reason, a survey design method will be employed (Creswell 2014). Using questionnaires will be convenient in this research due to the large coverage of participants it offers when compared to other research tools. According to Creswell (2014), besides offering anonymity, questionnaires allow low-cost distribution.Get your customised and 100% plagiarism-free paper on any subject done for only $16.00 $11/page Let us help you
This study will also rely on qualitative data by conducting interviews using open-ended questions to come up with an in-depth analysis of issues related to the impact of quality accounting education on accounting standards at the national level. A qualitative approach allows the greater richness of descriptions from respondents. It can reveal issues that are not identifiable using the quantitative approach. Miles, Huberman, and Saldina (2014) assert that qualitative data helps in identifying themes and patterns.
The initial collection of data will begin by using paper mail and email questionnaires. This strategy will ensure wider access to the study population. The questionnaires will be sent to the higher education institutions across Saudi Arabia that offer accounting literacy, including Dammam University. Next, semi-structured interviews will be conducted with accounting scholars. The researcher will allow the scholars to be part of the interview during the filling of questionnaires. Only those who agree will be included in the interview session. The open-ended interview questions will be informed by responses collected from participants who fill the questionnaires. The final stage will involve interviews with board members of the Saudi Arabia Accounting Association (SAA) to discuss the role played by SAA in improving accounting education in Saudi Arabia.
For the questionnaire part, data will be collected by sending out online questionnaires to students of 16 out of 25 tertiary institutions that offer accounting studies in Saudi Arabia. For the remaining nine institutions, paper-based questionnaires will be supplied to students by the researcher or through a hired facilitator. Paper questionnaires will be deployed in case the turnout is low concerning online responses. To avoid duplication of data, academicians will be requested to fill the paper questionnaire only if they had not participated in the online survey. Interviews will involve participants who filled the questionnaires and/or are willing to take part in the interview. SAA board members will also be interviewed. The researcher will travel to the designated places for the interview. For the SAA board members, the places of the interview are designated to be within Riyadh.
The analysis of data will include descriptive and inferential statistics concerning quantitative data. For qualitative data, thematic or content analysis will be employed. Regarding descriptive statistics, frequency distributions and the mean will be used to offer an overview of the perceptions held by most academics concerning the quality of accounting education. Standard deviation measures will be then be used to identify variations and hence ensure the most accurate results are obtained. For inferential statistics, the Mann-Whitney U (inferential tests) will be performed to check differences in the opinions and perceptions of academics regarding the quality of accounting education, including how it can be improved. The Mann-Whitney U test is instrumental in collecting ordinal data, as well as comparing independent samples. Content analysis for its part will be used on transcribed data to search and analyze meanings. In content/thematic analysis, codes are assigned to selected text bundles before being grouped according to similar research questions. This approach helps in identifying recurrent themes. Next, the researcher will evaluate the coded themes to establish accurate patterns.
Descriptive statistics will be presented by combining textual and tabular forms. On the other hand, results from qualitative data will be presented in the form of themes or patterns. Additionally, graphs and figures will be employed to illustrate more clearly the connection between themes and constructs.
Resources and ethical considerations
Resources for this study include time (about 4 hours a day for 10 days) during which the surveys and interviews will be conducted. The researcher will also incur expenses in printing questionnaires and traveling from one institution to another conducting the interviews. Other resources to be utilized in this study include software packages such as the Mann-Whitney U test.
Before the study, permission will be sought from the institutions, and subsequently from the participants. Additionally, participants will be provided with enough information regarding the purpose and scope of the study before being requested to participate. By taking these steps, the researcher hopes that participants will reach an informed decision on whether to take part in the study. The researcher will also be keen not to infringe on the personal privacy of the participants nor interfere with their privacy values.
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