Discuss the project of adopting an accrual accounting IPSAS [discuss the stages this project is going through, status in Middle East

There are existences of provisions under the IPSAS in which organizations are adopting the process of the accrual basis of accounting and financial reporting that is encouraged to meet the provisions of the standards as soon as possible to meet the requirements of the project. Currently Saudi companies are working with the different projects of development such as King Salman Energy Park is setting the contribution of the SAR 22.5 billion annually that is approved by Aramco. This project is used to localize 300 small industries to facilitate the global industries related to manufacturing services in the state. Facilities are offered in the commercial and residential areas that are based on the different areas of services to contribute in the development (Grossi & Soverchia, 2011).

Ministry of Finance is issuing the pre budget that is broader part of the policies to build the economics frameworks in the efforts of the government to gain the transparency in the projects. There are some main points on which government emphasis more such as to take the initiatives in the non-oil sector of the country to gain the improvements more than 2.3% that is based on the positive effects of economy.  The government is focusing in the development of the increasing the GDP from the growth of the different key measures that are used to contribute in the overall income of the country. Oil market is not stable in the world market that required improving the policies of the revenue to regulate the policies in the regular funding of the projects. Government strongly prefer to the economic and social development of the spending in the countries. Total expenses are budgeted to be SAR 1,048 billion in 2019 and SAR 1020 in year 2020.

Give your opinion on the forces leading to this adaptation or change

Saudi Arab is adopting the accrual basis accounting program that aims to play an important role to prove the financial data to help the measures of the performance to examine the gaps of the finances in the light of ministry of finance. The Kingdom's change from money to gathering bookkeeping was not only a specialized necessity. It will help create viable monetary approaches. Furthermore, the fruitful move will permit the organization to have an incorporated monetary framework, in light of brought together bookkeeping customs, Al-Jadaan included (Alesani, Jensen, & Steccolini, 2012).

The challenges facing or might face Saudi government in the future

Government of Saudi Arabia is developing different programs that are based on the cash basis and accrual basis to adopt the Accountability of the financial statements Most elements remembered for the budget summaries either embraced collections IPSAS or on the other hand (where proper, as per the idea of an element's tasks) IFRS. Strategies of Saudi Arabia staged methodology is planned to help the administration to move towards the selection of full IPSAS collection norms (Mhaka, 2014).

 In spite of this, challenges were experienced at the degree of individual substances, where issues included: the debilitation testing of humanity and immaterial resources; income acknowledgment; deterioration of advantages over their helpful lives; arrangement of combined budget reports; the bookkeeping treatment of account and working leases; endorsed spending of yearly spending plans; resource acknowledgment; the introduction in fiscal summaries of government commitments; the estimation of reasonable estimation of speculation properties; the installment of yearly rewards and staff motivating forces; evaluation of the probability of recuperation of money related offices and advances; and benefit acknowledgment, including of outside speculations and examinations among spending plan and genuine spend. There was an extra issue of the need to present fiscal summaries in Arabic, as required by government.

The expected benefits of changing to accrual IPSAS in Saudi government agencies

There are followings benefits that are being enjoyed by the adopting accrual base accounting implemented in the accounting transactions. These benefits are:

·         Greater accountability and transparency IPSAS in Saudi Arabia

There are evidences that are approved by the greater work in the financial statement that are important in the promotion of work that are allocated to own the statements of the financial reporting across the world.

·         Better decision making IPSAS in Saudi Arabia

Financial position and financial implications are reported with the policy measures to take the better decision and judgments in the business policies. Stakeholders and authorities are assisted in the planning of the future.

·         Economical and social advantages IPSAS in Saudi Arabia

There are key drivers that are important to take in the adoption of the IPSAS to attract the investment in the public projects especially in the emerging economies. Financial statements that are prepared according to the IPSAS provide the confidence and comparability for the new investor in and out of the boundaries to improve the welfare and social improvements.

·         Improved efficiency IPSAS in Saudi Arabia

Financial reports that are prepared according to the IPSAS are used to increase the effectiveness and efficiency increase the effectiveness and auditing the processes in the sectors that are used to improve the effectiveness.

·         Professional access IPSAS in Saudi Arabia

The adoption of IPSAS performs an important role in the enhancement of the skills that are used in the finance functions. It represents the functions that are related to the increment of the productivity and professional skills.

All these benefits and furthermore are enjoyed by the companies in Saudi Arabia who are adopting the methodologies that are based on the accrual basis of accounting by IPSAS (Alesani, Jensen, & Steccolini, 2012). 

References of IPSAS in Saudi Arabia

Alesani, D., Jensen, G., & Steccolini, I. (2012). "IPSAS adoption by the World Food Programme: an application of the contingency model to intergovernmental organisations. International Journal of Public Sector Performance Management , 2 (1), 61-80.

Grossi, G., & Soverchia, M. (2011). "European Commission adoption of IPSAS to reform financial reporting. Abacus , 47 (4), 525-552.

Mhaka, C. (2014). "IPSAS, a guaranteed way of quality government financial reporting? A comparative analysis of the existing cash accounting and IPSAS based accounting reporting. International Journal of Financial Economics, , 3 (3), 134-141.