The extent of realizing the external auditors of the creative accounting methods and countermeasures in the financial statements issued by Saudi public shareholding companies empirical study on the Saudi environment

Amjad Jameel Al Shorafaa

Abstract

The study aimed to identify the Extent of Realizing of auditors to creative accounting methods and countermeasures in the financial statements issued by public shareholding in the Kingdom of Saudi Arabia. To achieve the objectives of the study questionnaire was developed and distributed to the legal accounting firms licensed to practice the profession in the Kingdom of Saudi Arabia's (146) offices, according to a statement DFI Arabia of Certified Public Accountants, as in 06/04/1436 AH. (100) questionnaire has been distributed, adopted them for the purposes of analysis and study (88) questionnaire comprising a (98%) of the questionnaires recovered. Findings of the study indicated that the auditors have high awareness and understanding of the methods of the exercise of creative accounting, as they realize and understand the counter-measures to creative accounting methods in the financial statements issued by Saudi public shareholding companies. The results also showed exposure of Auditors in the Kingdom of Saudi Arabia under great pressure from the departments of corporations to overlook the creative accounting practices under pressure rotated in the coming periods, and that many of the auditors are forced to overlook the creative accounting procedures under the pressure of competition and the fear of the client and that it has a large proportion of the auditors do not approve of accepting creative accounting practices, despite its presence diaper on their interests and reputation of the profession. And this shows that the auditor is under several conflicting motives as to respond to the pressures of department’s client companies, and loyalty stretched entrusted to them to shareholders, and the pressures of competition in the market and nappy on their interests, and legal responsibilities of possible exposure. The study recommended the necessity of a strong stand-alone device to monitor the legal accounting offices that deal with the public shareholding companies, and work to find solutions to the competitive pressures faced by the audit firms to enhance the independence of solutions. The research recommends further studies have to be conducted for looking at finding neutral parties other than the General Assembly for organizing ways for auditors’ assignment, their replacing and terminating.