CHAPTER 8 - The Accounting Profession in Saudi Arabia

Abstract

This chapter discusses the accounting profession in Saudi Arabia. This country occupies about four-fifths of the Arabian Peninsula, which is located in southwest Asia between the Red Sea, the Arabian Sea, and The Arabian Gulf. The area of the country is about 870,000 square miles or about one fourth that of the United States. It has most of the geographical features except the internal bodies of water. The country is mostly dry except the Western Province that has spring and summer rain enough for seasonal agricultural activities. Saudi Arabia's economy is still dominated by the oil industry that in 1984 provided over 60 per cent of the government's revenue and approximately 90 per cent of the country's foreign exchange. Until 1950, an accounting profession did not exist in Saudi Arabia because the business enterprises at that time were mostly proprietorships and partnerships. Corporations in Saudi Arabia were formed late in the 1950s. At the present time, there are sixty-four public corporations and 4,350 limited liability companies, besides large numbers of proprietorships and partnerships operating in Saudi Arabia. In Saudi Arabia, professional licenses for accountants are issued by the government. The Ministry of Finance and National Economy was the government department that had the authority of issuing licenses until 1957. Since then, the authority has been transferred to the Ministry of Commerce.