ROLE OF ACCOUNTING IN FINANCIAL PERFORMANCE WITH REFERENCE TO BANKS IN SAUDI ARABIA
Abstract
The aim of the study looks into the accounting practices used in Saudi Arabian banks and the bearing they have on financial performances, focusing on the adoption and impacts of new international standards such as IFRS. The secondary data were used for a period of five recent years, and financial reports from some Saudi banks were considered in order to judge their key financial performance by ROA, ROE, and profit margins. It shows that conservative loan loss provisioning, fair value accountancy, and liquidity management are the main factors that determine both financial stability and performance. While the adoption of IFRS has significantly improved transparency, it has at the same time brought its own set of challenges, such as complexity in compliance matters and increased volatility in the financial statements. The study also brings into focus the need for a trade-off between risk management and the requirements for financial transparency and responsiveness to the market. These findings present major implications for the banking practitioners and regulators, as well as for the policy makers who are keen to enhance the financial performance along the dimension of regulatory compliance for Saudi banks.
Keyword : Accounting, Financial Performance, IFRS, Financial Stability, Regulatory Compliance.
This work is licensed under a Creative Commons Attribution 4.0 International License.
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