Overview on the Convergence of US GAAP into IFRS in Saudi Arabia

The purpose of this study is to explore the convergence mechanism and process of SMEu0027s financial statements into the International Financial Reporting Standards(IFRS) including the benefits and the impact of financial reporting on users of financial statements. The paper also explains the early IFRS adoption in Saudi Arabia according to the guideline provided by Saudi Organizations for Certified Public Accountants (SOCPA). The mechanism of the convergence incudes: nature of information to gather during the convergence, the significant IFRS to include in the financial reports, and financial accounts affected by the convergence. The article results find that the fair value adoption and Zakat rules are the most challenges for SMEu0027s in the financial stamens convergence process in addition to lack of adequate guidance by SOCPA and the complexity of IFRS. The Zakat rules need more interpretation and transparency. Therefore, companies spend more effort in financial statements convergence for Zakat purpose. In addition, more collaboration and training are required to improve the quality of financial reporting which would reduce the time consumption and convergence costs including cost of outsourcing (offshoring) financial statements convergence into IFRS.