Saudi Arabia Regulations on Corporate Governance

S, Algoere Turki Naif; Ali, Hasani Mohd

doi:10.18488/journal.1.2019.92.229.239

Cited by 8 publications

(8 citation statements)

References 2 publications

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“…As a result, various regulators around the world advocate for the formation of ACs and have established some guidelines regarding their responsibilities and composition (Bhuiyan and D'Costa 2020). Similarly, the Saudi capital market authority issued new corporate governance regulations in 2017, which include the mandatory formation of ACs (Naif and Ali 2019). According to the new regulations, the AC should be composed of three to five members, with at least one independent member and one specializing in accounting; the chair of the AC should be an independent director (Naif and Ali 2019).…”

Section: Audit Committeementioning

confidence: 99%

“…Secondly, non-financial information in emerging markets, such as Saudi Arabia, is frequently limited, and the analysts' forecasts are insufficiently developed, which places a premium on the financial information provided by companies and its timeliness (Aljaaidi et al 2019;Gamra et al 2022). Thirdly, the updated Saudi Corporate Governance Code, published in 2017, emphasized the importance of the AC members' roles and provided more guidance on the selection of these members and the committee's chair (Naif and Ali 2019). Fourthly, many busy directors serve on the boards of non-financial firms in the GCC (Eulaiwi et al 2016); thus, having a significant number of busy members on the audit committee, who also serve on boards of other firms, is more likely in Saudi firms.…”

Section: Introductionmentioning

confidence: 99%

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Does Audit Committee Busyness Impact Audit Report Lag?

Alsheikh

2023

IJFS

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We investigate the effects of both the busyness of audit committee (AC) members and the busyness of audit committee chairs on audit report lag (ARL) among Saudi non-financial firms between 2018 and 2021. In this study, a sample comprising a total of 515 firm-year observations from 140 non-financial firms was used. Measures for the busyness of the AC members and AC chairs, as well as a measure for the ARL, were derived from the previous literature to examine these relationships in Saudi Arabia. Our findings, based on two regression models and random effect estimates, suggest that both the busyness of AC members and the busyness of the AC chairs have positive and significant effects on the ARL. In addition, robustness checks using a different measurement of ARL as well as tests for fixed effect and pooled ordinary least square (OLS) were conducted, and the results confirm our findings. Finally, our findings can help regulators, policymakers, and auditors improve the timeliness of financial information disclosure by Saudi non-financial firms, and they can be expanded to include Gulf Cooperation Council (GCC) nations.

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Section: Audit Committeementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Does Audit Committee Busyness Impact Audit Report Lag?

Alsheikh

2023

IJFS

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“…Additionally, it was also made obligatory that remuneration committee must be set up by the BOD with members not from executive directors and should have at least an independent director Article 60(a). Under the same provision it was added that on BOD’s suggestion, the General Assembly of a corporation must give a guideline for the remuneration committee as well as its responsibilities, process and instructions for choosing its members and their remuneration (Algoere and Hasani, 2019).…”

Section: Current Development In Corporate Governance Lawsmentioning

confidence: 99%

Review of Saudi Arabia company law reforms and its implications on corporate governance framework- an evidence from emerging market

Rizvi

Hussain

2021

IJLMA

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Purpose This paper aims to review the literature of CG regime in Saudi Arabia, an emerging market for several compelling reasons. Most of the earlier literature on corporate governance subjects mainly aimed at large emerging economies. To date, there is a lack of studies examining the following: authorities and obligations, subcommittees and the regulatory system in Saudi Arabia. Therefore, this paper is an attempt to bridge this gap by reviewing the current laws, regulation, trends and key reforms in corporate governance framework in the country as the current amended laws focused to offer more competence and precision to the regulatory setting in line with the development of the Saudi Arabian stock market and the influx of foreign reserves. Design/methodology/approach The current paper has espoused a content analysis approach in which relevant literature was deliberated and studied. Findings The amended CG rules include some developments into corporate governance and substitutes the earlier version of the long overdue regulation of 1965. The new 2017 implemented Code will reinforce the implication of good governance as a condition model for accomplishing good financial management in the country. This study has provided an overview of the evolution and development of corporate governance in Saudi Arabia by highlighting the key reforms. Research limitations/implications This study has implications for the policymakers and institutional bodies to review the current developments and progress in the country’s overall corporate governance framework in an attempt to attract more foreign direct investment. Saudi Arabia is among the nations that have a potential for huge foreign investments due to its plan of expanding its economy “Vision 2030.” Therefore, this paper will aid foreign investors in deciding to invest in the country after reviewing the current developments in an attempt to implement vision 2030. Originality/value This study contributes to existing literature by examining the current trends in CG, with the discussion on the development of company law in Saudi Arabia which emphasizes on sections that borders on corporate governance.

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“…As we predicted, H7 is accepted (except in KSA) as the accounting conservatism practices are rarely used in GCC countries, and conservatism is not used as a tool to protect the investors, and foreign investors have no power in the board of directors in GCC firms. For example, in KSA, as Naif and Ali (2019), the capital market 'Tadawul' is considered one of the good markets for FI, but many issues are pending and not implemented to attract more foreign investors. This result is supported by An (2019) which found no relationship between FI and EQ-CON, but it is not in line with Khalil et al (2020) which found that conservatism practices are attractive practices for foreign investors.…”

Section: Measuring and Analysis Of Eq-con And Fimentioning

confidence: 99%

Earnings Quality and Foreign Investors in Gulf Cooperation Council Countries

Ani

2021

CMR

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This study aims to measure the earnings quality (EQ) in the Gulf Cooperation Council (GCC) countries using a sample of 1827 firm-year observations from 2008 to 2016 by using nine EQ measures. These measures are persistence, predictability, value relevance, earnings response coefficient (ERC), smoothness, earnings surprise, accrual quality, loss recognition timeliness and conservatism. The study also examines the effect of these nine EQ measures on attracting foreign investors. Data are collected from Capital IQ database, and some other data are calculated manually from the capital markets and firms in each country. In this quantitative research, the sample is analysed by using descriptive statistics, correlation, and generalized least squares (GLS) regression to verify the hypotheses and analyse the effect of EQ measures on attracting foreign investors. Findings show distinct effects on attracting foreign investors in different countries. Persistence, predictability, ERC, and accrual quality have a positive effect in Oman, whereas value relevance and ERC have a positive effect in Kuwait. Predictability, accrual quality, ERC, and conservatism negatively affect the Kingdom of Saudi Arabia. Finally, loss recognition timeliness, smoothness, and earnings surprise do not have any effect in all GCC countries.

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Saudi Arabia Regulations on Corporate Governance

Cited by 8 publications

References 2 publications

Does Audit Committee Busyness Impact Audit Report Lag?

Does Audit Committee Busyness Impact Audit Report Lag?

Review of Saudi Arabia company law reforms and its implications on corporate governance framework- an evidence from emerging market

Earnings Quality and Foreign Investors in Gulf Cooperation Council Countries

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