scholarly journals Audit committees in financial institutions in Saudi Arabia: a dichotomy of perceptions of functional independence and the reporting of financial crime

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Reem Ali Almakhfor ◽  
Simon D. Norton
Keyword(s):  
Saudi Arabia ◽  
Financial Institutions ◽  
Saudi Arabian ◽  
Functional Independence ◽  
Audit Committees ◽  
Financial Crime ◽  
Regulatory Body ◽  
Content Type ◽  
Behavioural Factors ◽  
Using Data

Purpose Audit committees (ACs) have an important role to play in banks in Saudi Arabia in detecting and reporting weaknesses which may make financial crime possible. The Saudi Arabian Corporate Governance Code of 2016 comprises recommendations for ensuring the effectiveness of these committees, but cultural and behavioural factors can constitute impediments. This paper aims to explore these factors and makes recommendations. Design/methodology/approach The methodology is qualitative, using data derived from responses to a questionnaire administered to 180 current and former members of internal and external audit teams of Saudi Arabian banks. Findings ACs in Saudi financial institutions enjoy a high degree of functional independence of boards. Boards tend to regard ACs as part of the organisation: in contrast, AC members perceive their first duty as being owed to stakeholders. Disagreements between boards and ACs regarding disclosure of findings of systemic weaknesses which facilitate money laundering (ML) are made publicly available; this engenders transparency and avoidance of collusion. Professional qualifications and experience of AC members have improved substantially in recent years, equipping them to better discharge statutory duties regarding the detection and reporting of suspected ML. Research limitations/implications The regulatory body, the Saudi Arabian Markets Authority, should be diligent in ensuring the presence of non-executive directors in sufficient numbers to counterbalance influence by boards. Disagreements between boards and ACs regarding internal systemic changes to prevent ML and other financial crimes should be formally recorded in minutes and made public as a matter of record. Originality/value Questionnaire responses by past and present members of ACs are unique and contribute to the literature.

Are Islamic financial institutions more resilient against the COVID-19 pandemic in the GCC countries?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Erhan Akkas ◽  
Hazem Al Samman
Keyword(s):  
Saudi Arabia ◽  
Phase Analysis ◽  
Financial Institutions ◽  
Random Effect Model ◽  
Second Phase ◽  
Content Type ◽  
Gcc Countries ◽  
Effect Model ◽  
Islamic Financial Institutions ◽  
The Impact

Purpose This paper aims to investigate and provide an objective appraisal of the impact of the COVID-19 outbreak on Islamic and conventional financial institutions and Islamic windows in the Gulf Cooperation Council (GCC) countries. Design/methodology/approach The panel data techniques are conducted country-wise in each financial institution type: random-effect model, fixed-effect model and Hausman test. Findings The results of the first phase analysis that extends from 1 January 2020 to 30 October 2020 show that Islamic financial institutions are less exposed to the repercussions of the COVID-19 outbreak than the conventional and Islamic window financial institutions in Bahrain, Oman, Qatar, Saudi Arabia and UAE. Moreover, the Islamic financial institutions in Saudi Arabia and Oman have not been affected by the COVID-19 outbreak. The second phase analysis for the COVID-19 outbreak that extends from 1 November 2020 to 17 March 2021 confirms the disappearance of the negative impact of COVID-19 on Islamic financial institutions in Bahrain and Oman. Practical implications The findings present that Islamic banks are not as resilient in the COVID-19 pandemic as in the 2008 financial crisis. It can be suggested that regulatory authorities, financial institutions and other key policymakers in the GCC countries should focus on implementing regulatory reforms related to human capital, innovative products, research and development to further develop individuals, societies and institutions within the framework of Islamic ontology to be more resilient in such crises. Originality/value This paper provides a different perspective from existing literature on the pandemics and financial institutions by comparing the stock prices in Islamic and conventional financial institutions and Islamic windows in GCC countries during the COVID-19 pandemic. Therefore, this paper should be considered as a contribution to filling a gap in the literature.

Implementation of Lean Six Sigma in Saudi Arabian organisations

2017 ◽  
Vol 34 (4) ◽  
pp. 508-529 ◽  
Author(s):  
Saja Ahmed Albliwi ◽  
Jiju Antony ◽  
Norin Arshed ◽  
Abhijeet Ghadge
Keyword(s):  
Saudi Arabia ◽  
Six Sigma ◽  
Best Practice ◽  
Online Survey ◽  
Saudi Arabian ◽  
Lean Six Sigma ◽  
Current Status ◽  
Future Research ◽  
Structured Interviews ◽  
Content Type

Purpose Although the popularity of the Lean Six Sigma (LSS) methodology has illustrated many benefits over the years for those organisations who have implemented it, this strategy has received less attention in developing countries. The purpose of this paper is to critically assess the current status of LSS implementation in Saudi Arabian organisations. Design/methodology/approach This research is based on a descriptive survey questionnaire which has been derived from two systematic literature reviews. The survey was distributed to 400 organisations in Saudi Arabia using Qualtrics online software. In total, 146 responses were received where 102 responses were completed and analysed. Findings The findings of the survey highlighted that the implementation of LSS is still in the early stages in organisations within Saudi Arabia. This was clearly shown by many factors such as years of deploying LSS, LSS infrastructure, level of awareness of LSS, impact of LSS on business functions and so on. Research limitations/implications The primary limitation of this study is that data has been collected from an online survey and therefore no deeper insights could have been captured from the survey. This calls for future research to be undertaken by executing semi-structured interviews in selective organisations within Saudi Arabia. Originality/value This paper contributes to the current status of LSS in Saudi Arabian organisations. It also gives recommendations to guide the future of LSS in Saudi organisations by comparing LSS literature with best practice.

Audit committee ownership and audit report lag: evidence from Australia

2020 ◽  
Vol 28 (1) ◽  
pp. 96-125
Author(s):  
Md. Borhan Uddin Bhuiyan ◽  
Mabel D’Costa
Keyword(s):  
Financial Reporting ◽  
Audit Committee ◽  
Reporting Quality ◽  
Financial Statements ◽  
Audit Committees ◽  
Financial Reporting Quality ◽  
Audit Report ◽  
Content Type ◽  
External Auditors ◽  
Using Data

Purpose This paper aims to examine whether audit committee ownership affects audit report lag. Independent audit committees are responsible for overseeing the financial reporting process, to ensure that financial statements are both credible and released to external stakeholders in a timely manner. To date, however, the extent to which audit committee ownership strengthens or compromises member independence, and hence, influences audit report lag, has remained unexplored. Design/methodology/approach This paper hypothesizes that audit committee ownership is associated with audit report lag. Further, the author hypothesize that both the financial reporting quality and the going concern opinions of a firm mediate the effect of audit committee ownership on audit report lag. Findings Using data from Australian listed companies, the author find that audit committee ownership increases audit report lag. The author further document that financial reporting quality and modified audit opinions rendered by external auditors mediate this positive relationship. The results are robust to endogeneity concerns emanating from firms’ deliberate decisions to grant shares to the audit committee members. Originality/value The study contributes to both the audit report timeliness and the corporate governance literatures, by documenting an adverse effect of audit committee ownership.

scholarly journals Revisiting the corporate image through service quality and relationship marketing: an empirical evidence from Malaysian and Saudi Arabian Takaful customers

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohsin Abdur Rehman ◽  
Sadaf Khan ◽  
Ismah Osman ◽  
Khurram Aziz ◽  
Ghazal Shams
Keyword(s):  
Saudi Arabia ◽  
Service Quality ◽  
Relationship Marketing ◽  
Customer Loyalty ◽  
Corporate Reputation ◽  
Saudi Arabian ◽  
Corporate Image ◽  
Ethical Behaviour ◽  
Content Type ◽  
The Relationship

Purpose This study aims to test a proposed model based on a combination of the relationship marketing and service quality dimensions as predictors of corporate image and customer loyalty via corporate reputation in the Takaful context. More importantly, this study compares the Takaful operators’ services with the perceived service quality and the relationship marketing from the Malaysian and Saudi Arabian customers’ viewpoint. Design/methodology/approach A survey-based study was conducted through a questionnaire, and the data was collected from Takaful customers (362 Saudi Arabian and 350 Malaysian customers) through an online survey. Structural equation modelling is used to test the proposed model. Besides, the perception of Takaful customers between Saudi Arabia and Malaysia is compared through a multi-group analysis. Findings The results from the Malaysian context reveal that positive perceptions of service quality PAKSERV dimensions (personalization, reliability and tangibility) and positive perceptions of relationship marketing dimensions (Islamic ethical behaviour and structural bonds) have a significant influence on the corporate image. Alternatively, in the Saudi Arabian context, results have shown that the positive perceptions of service quality PAKSERV dimensions (assurance and reliability) of service quality and the positive perceptions of the relationship marketing dimensions (Islamic ethical behaviour, structural bonds and financial bonds) have a significant influence on the corporate image. The differences in both countries’ results can also enhance the corporate image on corporate reputation, merely in Malaysia. By contrast, corporate reputation is deemed a significant predictor of customer loyalty, represented as valid for both contexts. Research limitations/implications The proposed research model tested in Takaful Malaysian and Saudi Arabian can be replicated in other contexts – in terms of country and industry. Moreover, the current study reveals the crucial role of corporate image in forming corporate reputation. Future research could be focussed on the importance of other emotional or affective variables that may be involved in determining corporate reputation. Finally, future studies can be carried with another cultural perspective to have more diversified socio-economic implications. Practical implications It is suggested that Takaful operators from both Malaysia and Saudi Arabia need to put maximum effort towards customer loyalty by bringing both the dimensions of service quality and the relationship marketing in compliance with the principles of Islamic business transaction. The findings of the specific dimensions of service quality and relationship marketing will contribute to customers’ perceptions of corporate image and reputation in the Takaful industry. Originality/value The present study tested a blended facet of customer’s overall experience through service quality (PAKSERV) and customer service provider connectivity (relationship marketing) to predict the corporate image of the highly growing financial marketplace (Takaful). Contextually, this study contributes to delineating the factors (corporate reputation) affecting customer loyalty rather than a customer satisfaction tradition. Significantly, Saudi Arabia and Malaysia were chosen for this study, as they are currently the two fast-growing markets for Islamic financial services, especially with regards to the Takaful products and offerings.

RegTech solutions and AML compliance: what future for financial crime?

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Esman Kurum
Keyword(s):  
Money Laundering ◽  
Financial Institutions ◽  
Design Methodology ◽  
Financial Crime ◽  
Strong Positive Correlation ◽  
Content Type ◽  
Compliance Programs ◽  
Time Required ◽  
International Experts

Purpose This study aims to discuss the growing use of RegTech solutions by financial institutions to comply more efficiently with regulation in terms of anti-money laundering compliance and more specifically its influence on the evolution of financial crime in the next ten years. Design/methodology/approach Based on two online Delphi surveys sent to a panel of international experts composed of eight specially recruited professionals and specialists of anti-financial crime compliance and RegTech, five main predictions have been developed. Findings It was found that artificial intelligence would become the most impactful technology for financial institutions to fight financial crime, and that there will be a strong positive correlation between ever-more elaborated compliance programs and the level of sophistication of methods used for money laundering. Furthermore, the panel designated regulators’ recommendations as likely to be less influential than RegTech solutions, and the time required to integrate RegTech solutions for AML compliance as the main future challenge. Originality/value These predictions are meant to provide financial institutions and regulators with useful outlooks. While the reviewed literature focused on the role of regulations on the evolution of money laundering, this study puts stress on RegTech solutions and their impact on both compliance and financial crime.

Implementing IFRS in Saudi Arabia: evidence from publicly traded companies

2020 ◽  
Vol 28 (2) ◽  
pp. 243-273 ◽  
Author(s):  
Mohammad Nurunnabi ◽  
Eva K. Jermakowicz ◽  
Han Donker
Keyword(s):  
Saudi Arabia ◽  
Financial Reporting ◽  
Critical Role ◽  
Saudi Arabian ◽  
Content Type ◽  
Audit Firm ◽  
Big 4 ◽  
Expected Benefits ◽  
The Impact ◽  
Ifrs Implementation

Purpose The Saudi Organization for Certified Public Accountants (SOCPA) requires that International Financial Reporting Standards (IFRS), as endorsed in Saudi Arabia, be used by all listed and unlisted companies. This study aims to provide insight into IFRS implementation problems, based on a survey sent to Saudi Arabian companies listed on Tadawul, the Saudi stock market (i.e. financial hub in the Middle East). Design/methodology/approach The survey focused on the impact that IFRS conversion has had on companies, their accounting and their finance strategies. The benefits and challenges of the adoption of IFRS are analyzed, including matters pertaining to the level of understanding and experience with IFRS, perceptions about the quality of IFRS and the impact of adoption of IFRS on consolidated equity and net income. Findings The survey had a response rate of 72 per cent. The results indicate a majority of respondents support conversion to IFRS as it results in higher quality financial reporting; the most important expected benefits of adopting IFRS include greater reporting transparency and improved comparability with other businesses; other expected benefits include harmonization of internal and external reporting, and increased cross-border investment opportunities; the IFRS process is costly and ties up resources because of its complexity and training needed and companies expect increased volatility in reported financial results that will impact share option plans and/or other incentive plans tied to profits. However, the authors find strong support among preparers of the financial statements for IFRS, as evidenced by higher agreement among respondents to the survey on the benefits of adopting IFRS, rather than on the costs of its adoption. Furthermore, the analysis shows that the likelihood of Saudi Arabian firms that are in favor of adopting IFRS decreases if the audit firm is one of the Big 4. The reason for this negative relationship could be that the cost of transition toward IFRS will be high. Therefore, Saudi Arabian firms will not favor a transition toward IFRS when their audit firm belongs to the Big 4. Most difficult to implement IFRS, as listed by respondents, include those on financial instruments, revenue, leases and employee benefits. Originality/value The authors show how economic and environmental factors play a critical role in the IFRS implementation process. This study should be important to all countries worldwide that are in the process of adopting IFRS.

From east to west and back again: the effects of reverse culture shock on female Saudi Arabian university students studying abroad

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Carmen Winkel ◽  
Laura Strachan ◽  
Siddiqua Aamir
Keyword(s):  
Saudi Arabia ◽  
University Students ◽  
Culture Shock ◽  
Saudi Arabian ◽  
Extended Period ◽  
Government Support ◽  
Data Set ◽  
Reverse Culture Shock ◽  
Content Type ◽  
Returning Home

Purpose The purpose of this study is to explore the experiences of Saudi Arabian university students returning home after having spent time away studying internationally. The investigation focused exclusively on female students who for diverse reasons were unable to complete their studies abroad. Design/methodology/approach A thematic analysis was applied to analyze the seven in-depth interviews conducted by the authors. By using an open coding method analytic patterns across the entire data set were identified and then analyzed. Findings The findings suggest that the students experienced reverse culture shock reintegrating and assimilating into their former lives in the Kingdom of Saudi Arabia and its conservative culture. This was especially surprising considering not one of the participants experienced culture shock when they first traveled to their host country – the USA, Canada or England. Research limitations/implications The study is limited to a small group of seven female undergraduates who are comparatively well educated and come from a middle and upper socioeconomic demographic. As a result, without additional research, the findings cannot be extended to groups outside of this demographic. Practical implications Students who have studied abroad need improved academic and social support networks when they return home, according to the findings. The authors want to raise awareness about the difficulties that students face upon their return. Teachers, counselors, and advisors need to be on the lookout for the symptomatology associated with these types of problems. Social implications Female Saudi students returning home after an extended period of study abroad face a variety of problems. They must fit into a restrictive, partriarchal culture in which they are not legally equal to men. Originality/value To date, there are no studies that shed light on reverse culture shock for students who returned to Saudi Arabia without a degree. Due to the large number of Saudi scholarship holders who study in English-speaking countries with government support, the study is the first attempt in this direction.

Impact of COVID-19 on financial institutions: Navigating the global emerging patterns of financial crime

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Christoph Wronka
Keyword(s):  
Financial Institutions ◽  
Global Economy ◽  
Design Methodology ◽  
Financial Sector ◽  
Financial Crime ◽  
Content Type ◽  
The Past ◽  
The World ◽  
Emerging Patterns ◽  
The Impact

Purpose The current COVID-19 pandemic has already proven to be one of the world’s deadliest crises in modern history with far-reaching impacts on different sectors of the global economy. The financial sector is among the most widely affected by the economic crisis occasioned by the COVID-19 pandemic. One of the most notable effects is related to financial crime. It is against this backdrop that the present study aimed to examine the impact of COVID-19 on financial institutions with the main focus being on financial crime Design/methodology/approach Its twofold objectives were to critically examine the global emerging patterns of financial crime and their association with the COVID-19 pandemic; and to investigate how financial institutions across the world have been responding to, managing, and dealing with the emerging patterns of financial crime brought about by (or linked to) the COVID-19 pandemic. Findings It was found out that as the pandemic ravages the world and pushes people and businesses to the very limits of their endurance, many financial sector stakeholders and players are responding in ways that put the entire financial sector and all its stakeholders at great risk. Specifically, COVID-19 pandemic has led to the emergence of new patterns of financial crime that were either unheard of or were not as rampant in the past. Originality/value Both the descriptive and correlation analyses produced by this study provide new insights into the impact of COVID-19 on financial institutions with a main focus on financial crime.

Cross-country evidence of Islamic portfolio diversification: are there opportunities in Saudi Arabia?

2019 ◽  
Vol 45 (1) ◽  
pp. 36-53 ◽  
Author(s):  
Md Hakim Ali ◽  
Md Akther Uddin ◽  
Mohammad Ashraful Ferdous Chowdhury ◽  
Mansur Masih
Keyword(s):  
Saudi Arabia ◽  
Wavelet Transforms ◽  
Saudi Arabian ◽  
Portfolio Diversification ◽  
Discrete Wavelet ◽  
Policy Makers ◽  
Content Type ◽  
International Portfolio Diversification ◽  
Trading Partners ◽  
Cross Country

Purpose On the backdrop of growing importance of Shariah compliant equity markets, the purpose of this paper is to study cross-country portfolio diversification benefits for investors with major trading partners of Saudi Arabia, namely, USA, China, Japan, Germany and India, who have already invested or tend to invest in Saudi Arabian stock market. Design/methodology/approach The authors have investigated time invariant, dynamic correlations at different investments horizons of the investors among Islamic asset classes by applying relevant econometric techniques like multivariate generalized autoregressive conditional heteroscedastic –DCC and continuous wavelet transforms. For robustness, this study also applied maximal overlap discrete wavelet transform. Findings The findings tend to indicate that the Saudi Arabian investors have portfolio diversification benefits with all major trading partners in the short-term investment horizon. Interestingly, Saudi Arabian market has the least portfolio diversification benefits with the Chinese market. However, in the long run, all markets are correlated, yielding minimum portfolio diversification benefits and most importantly Saudi Arabian investors have portfolio diversification benefits with the Indian Islamic equity market in almost all investment horizons. The findings are highly consistent across different econometric technique estimations. Research limitations/implications The authors are only considering five major trading partners of Saudi Arabia. Also, the authors are using S&P and FTSE shari’ah index. Moreover, the time period of the study is constrained by the availability of shari’ah indices. Econometric limitations are also well documented in the literature. Practical implications The results could be beneficial for the investors, portfolio managers, hedge fund managers and institutional investors and also could be useful for the policy makers in their policy-making decisions. Originality/value Only very few studies have looked into the benefits of international portfolio diversification from the perspective of local investors as well as the portfolio diversification benefits with the major trading partners of Saudi Arabia. One of the novelties of the method is to make the stock investors, practitioners and policy makers aware of the portfolio diversification benefits available at different time scales such as 4, 8, 16, 32, 64 and 256 trading days as investment holding periods to unveil the true dynamics of co-movement between those different assets.

Islamic challenges to advertising: a Saudi Arabian perspective

2015 ◽  
Vol 6 (2) ◽  
pp. 166-187 ◽  
Author(s):  
Akram Abdul Cader
Keyword(s):  
Systematic Review ◽  
Saudi Arabia ◽  
Gender Roles ◽  
Design Methodology ◽  
Saudi Arabian ◽  
Musical Instruments ◽  
Content Type ◽  
And Gender ◽  
The Impact ◽  
Practical Implications

Purpose – The purpose of this study is to synthesize the existing research on Islam and advertising with the perspective of the Salafi authority of Saudi Arabia. This study is an exploration of the impact of the conservative interpretation of Islam on advertising. Design/methodology/approach – This study critically reviews the literature on advertising in Islam, specifically in the context of the conservative religious Saudi Arabia, Islam and advertising and its connection with the interpretations of the religiously conservative segment of Saudi Arabian society. This systematic review covered 42 studies in Islamic advertising and Salafist/Hanbali jurisprudence, ranging from 1980 to 2014. These studies were validated through data triangulation using a meta-synthesis of 39 articles with 5 articles on Salafism and 5 Hanbali juristic texts. Findings – The investigation concludes that there are several factors to be considered when developing advertising messages and content for the conservative segment of Islam. The considerations are as follows: (C1) avoidance of Islamic creedal taboos and displays of immorality; (C2) avoiding usage of musical instruments and taboo entertainment; (C3) women must be dressed appropriately, and gender roles must be in conjunction with Islamic texts; and (C4) avoiding deceptive marketing, defaming competition, and ambiguous transactions. Although there was a general consensus on C1 and C3, few studies discussed C2 and C4. Hanbali jurisprudence, the official school of thought in Saudi Arabia, was found to be in agreement with all four considerations. Additionally, the study synthesizes previous studies and contributes more knowledge to the few existing literature on the topic of Islam and advertising. A better understanding of the conservative interpretation of Islam can contribute to scholarship in the field of Islamic marketing. Research limitations/implications – This paper was limited to the Salafist/Wahhabist interpretation of Islam based on Hanbali jurisprudence found in Saudi Arabia. The findings of this paper can be extended and validated through studying the attitudes of Salafists in different regions toward advertising messages and content. Practical implications – This paper was limited to the Salafist/Wahhabist interpretation of Islam based on Hanbali jurisprudence found in Saudi Arabia. The findings of this paper can be extended and validated through studying the attitudes of Salafists in different regions toward advertising messages and content. Originality/value – This study adds to the limited research on Islamic attitudes and challenges toward advertising in the Middle East. The study reviews existing research and utilizes religious rulings to research the conservative Islamic perspective of advertising.

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