Corporate governance and IFRS in Saudi Arabia

Prior researchers have identified heterogeneity in the economic factors after the adaptation of IFRS. The empirical evidence of capital market effects are considered in the research. The research conducted by Christensen et al. (2009) reported all the restatements to convey IFRS adaptation, cost of equity capital, and the market liquidity.

Daske and Gebhardt (2006) conducted research on the increased quality of IFRS financial reporting and the positive relationship was identified for the firm sizes, transparency, public subsidiaries, and independent board membership. The other consideration of the research was an analysis of positive impact due to the implementation of corporate governance and IFRS on the transparency of disclosure and financial statements (Alsuhaibania, 2012). The research investigated the common hypothesis for the internationally recognized financial reports about the cost of capital and accounting standards. Wang (2010) analyzed the prepared financial statements on the basis of Chinese GAAP and the research was highly related to the stock prices and the information content of IFRS. 

In another research Byard et al (2010) examined the effect of mandatory adoption of IFRS in the European Union and the whole process was related to the analysis of information environment and financial analysis. The analysis investigated mandatory adoption rates due to voluntary adoption of IFRS. The forecast errors and dispersion decreases in transparent financial reporting were also analyzed. The results of their research indicated the importance of accounting standards, enforcement regimes, incentives and impact of IFRS adoption (Alsuhaibania, 2012). Daske et al. (2008) investigated the economic consequences for the mandatory international financial reporting standards (IFRS). The research identified an impact on the cost of capital, market liquidity, and time relation with the average condition in the firms. The research also adopted local accounting standards and benefits of IFRS by the strong regulatory environment (Verriest, Gaeremynck, & Thornton, 2013).

Defond (2011) reported the essential components of accounting standards and comparable financial statements. The study investigated foreign mutual fund investment and ownership conditions for the mandatory IFRS credibility. Aksu & Espahbodi, (2015) investigated the impact of IFRS adoption and the Corporate governance principles on the Borsa Istanbul (Aksu & Espahbodi, 2015).

 The research defined voluntary and mandatory regulations for the governance practices and to enhance the disclosure quality in the emerging market. The analysis considered different conditions including dominant family ownership, code law traditions, and lax rules for the analysis of quality effects. The results of the research showed that an increase in transparency and disclosure (T & D) improved the scores in Borsa Istanbul firms. The multivariate analysis demonstrated the significant positive effect of corporate governance (Aksu & Espahbodi, 2015).

Ozili, (2016) worked on the earning quality and IFRS research in Africa, the other consideration was future direction, issues, and the recent pieces of evidence. The research was based on African literature and generalized concepts of development due to the implementation of IFRS. The objective of the work was related to the simulated debates and to improve the outputs of earning quality research. The research identified interaction between the earning quality and the policy and higher level of earning quality research were used for the interaction (Ozili, 2016). Mine, et al. (2012) identified the positive effect of the adoption of IFRS in Istanbul, Turkey (Mine, Muradoglu, Cetin, Tansel, 2012). The research monitored the role of the financial reporting system and foreign ownership with a low positive effect on the market.