The increase in the globalization of world economies has an important effect on the language of the business worldwide. European Union in 2002, listed a number of Saudi companies using IFRS as a roadmap. Besides the Saudi companies, many international institutes such as securities and exchange commission (SEC), an international organization of securities commission (IOSCO), the international federation of an accountant (IFAC), world bank, and international monetary fund (IMF) are adopting the IFRS. Some of the previous researches identified the main challenges faced by Saudi Arabia while adopting IFRS in Saudi Arabia. The only Saudi Member of IFRS is the Gulf Cooperation Council (GCC). The Saudi companies in the stock exchange are required to be a member of IFRS and they operate under the Saudi Accounting Standards (SAS) and Saudi Organization for Certified Public Accountants (SOCPA) (Verriest, Gaeremynck, & Thornton, 2013).

Corporate governance is basically a combination of instructions, laws, and policies that induces influence on the management and controlling process of the firms. The framework consists of fairness in the relationship and grant transparency for the shareholders and firms. The complete framework of corporate governance includes internal and external contracts between the shareholders and employees (Mine, Muradoglu, Cetin, Tansel, 2012).

The process considers the responsibilities, conditions, and distribution of the rewards. According to OECD in 2001, corporate governance is referred to the public and private institution, accepted business laws, regulations, and the market process. In previous years, Saudi Arabia has witnessed a number of reforms in governance and standards of internal control are changing rapidly. The main objective of Saudi Corporate governance regulations is to provide guideline, practices, and regulation for the companies (Verriest, Gaeremynck, & Thornton, 2013; Aksu & Espahbodi, 2015).

In the present research, the first analysis is related to the status of IFRS adoption in Saudi Arabia and to find the outcomes of IFRS adoption and lessons learned by Saudi Arabia. The impact of corporate governance is expected to have a significant effect on the performance of companies and characteristics. The main objective of the present study is to explore the performance measures and corporate governance to solve the problems of limited corporate governance practices in Saudi Arabia.

Research statement of Corporate governance and IFRS in Saudi Arabia

 Hypothesis of Corporate governance and IFRS in Saudi Arabia

Saudi Arabia has joined the world trade organization recently (four years ago), therefore it is important to analyze the level of adoption of IFRS in the companies listed in the Saudi Stock exchange. Saudi Arabia has recently launched different programs to have a role in the Foreign Direct Investment (FDI) and the present work will analyze the impact of IFRS adoption in Saudi Arabia. In Saudi Arabia, the role of corporate governance is to mitigate the residual loses.

 In the analysis, we will document compliance choices and disclosure of IFRS on transparency. The second analysis will include voluntary and mandatory items. The investigation will associate with adoption choices of IFRS and corporate governance in the regime of Saudi Arabia. The regression analysis will show transparent IFRS restatement for stronger governance. The optimistic approach will be used to analyze the consequences of IFRS adoption.

 The firms of Saudi Arabia have positively associated with compliance quality and the disclosure is related to the adaptation of IFRS.

The adoption of IFRS in Saudi Arabia has increased the degree of transparency in the region.