Sustainability Disclosure in Saudi Corporations' Financial Reports (Field Study)

Abstract

This Study aims to discover the extent of Saudi listed companies' disclosure of sustainable development practices through performing content analysis of a sample of Saudi listed companies. In addition, this paper also aims to determine the advantages and difficulties of sustainable development’s disclosure. The Research sample consists of 141 of companies that were listed on Saudi stock market during the period from 2013 to 2016. The researcher used content analysis approach to analyze the content of published annual financial reports. In addition, the researcher also has conducted a field study on a sample of (140): financial managers, preparers of financial reports, teaching staff from Saudi universities, and auditors to test the hypothesis of the field study. The main results of this paper indicate that Saudi companies disclose about sustainable development in their main annual reports and not in separate reports. In addition, there is a low level of accounting disclosure of the sustainable development practices of the Saudi companies under study. The disclosure information was more quantitative and descriptive. Based on these results, the study recommends that Saudi Organization for Certified Public Accountants (SOCPA) should take the responsibility of issuing an accounting standard for sustainable development practices that organize the accounting aspects of such practices. SOCPA should also encourage companies to issue a separate report for sustainable development with the necessity of being confirmed by an independent auditor with imposing punishments on companies that do not issue such reports.