The Effect of Governance Rules Application Controls and the Accrual Basis Application Controls on Quality of Financial Reporting: Applying to Jouf University

Taha Khairy Taha Ibrahim,Ebrahim Mohammed Al-Matari

doi:10.3390/su14052831

Abstract

The issue of governance and its applications in Saudi universities is one of the most important issues that has an effective impact on achieving excellence in performance, and achieving societal development for Saudi society. The application of governance rules works to enhance the values of justice, equality, the rule of law, combating corruption, transparency and accountability to contribute to the province on public funds and achieving quality and excellence in performance. So, this study aims to study the impact of the application of governance rules and the accrual basis on the quality of financial reports in Jouf university (Saudi Universities). A total of 348 questionnaires were issued to respondents, with 242 being returned. To put the hypothesized model to the test, structural equation modeling was used. The major findings confirmed the effect of governance rules and accrual foundation of application controls on the quality of Jouf University’s financial reporting. The findings have numerous practical ramifications, including the ability to assist managers in making sound decisions when selecting whether to establish governance rules and accrual basis of application controls in their organization. This is a rare and one-of-a-kind empirical study that investigates the impact of governance rules and accrual basis of application controls on the quality of financial reporting at Saudi universities such as Jouf University. This is the first study to give empirical evidence on the relationship between governance rules, the accrual basis of application controls, and financial reporting quality in the context of universities.

Highlights

It should be noted that Saudi universities have played a significant role in establishing a culture of governance in Saudi society by providing an ethical, behavioral, psychological, and value charter for students of higher education, academics, and administrators, and by achieving distinction in financial and administrative performance, which has facilitated the transfer of governance principles and rules to all members of society surrounding the university from the university
Structural equation modeling was utilized to put the postulated model to the test
The findings validated the impact of the governance rules and the accrual-based application controls on the quality of financial reporting at Jouf University

Summary

Introduction

At the local and global level, attention has increased in recent years to the issue of implementing governance rules and the basis of entitlement in universities, as the rules of governance in universities are based on the standards of disclosure, transparency, accountability, independence, and participation of all those involved in managing university affairs in a manner that enables them to develop financial and administrative performance and protect the interests of all parties, and the increased demand for higher education adopted by the Kingdom of Saudi Arabia in recent years has resulted in pressures to be more effective and responsive to community organizations and to achieve the vision and mission of universities in providing high-quality educational output commensurate with the labor market in the KSA in light of the 2030 vision [1].It should be noted that Saudi universities have played a significant role in establishing a culture of governance in Saudi society by providing an ethical, behavioral, psychological, and value charter for students of higher education, academics, and administrators, and by achieving distinction in financial and administrative performance, which has facilitated the transfer of governance principles and rules to all members of society surrounding the university from the university. The Kingdom of Saudi Arabia will adopt the transition to international reporting standards and apply the basis of merit in the government sector which will lead to the improvement of the quality of financial reports, resulting in keeping pace with the rapid economic developments, making bold decisions, and planning for the future by diversifying sources of income and requiring government sectors to make independent final accounts, cash flow statements, and income statements in a way that enhances the principle of disclosure and transparency for all relevant parties by clarifying public expenditures and public revenues.

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Conclusion