Standards Application and Accounting Transition
Support for the first-time application of IFRS, transition from the standard for small and medium-sized entities to the full set of IFRS, gap analysis, and preparation of the implementation plan.
Advisory
Accounting Advisory Services
HHAB provides accounting advisory services that help the entity apply the accounting standards endorsed in Saudi Arabia, address complex matters, prepare for new standards, and develop accounting policies, closing processes, and systems. The service is provided to address a specific matter or as ongoing support, with a scope and deliverables matched to the entity's needs.
Regulatory and Professional Framework
Endorsed Standards That Evolve Continuously and Require Early Preparation
Article 17 of the Companies Law requires the company to maintain the accounting records and the documents supporting its business, contracts, and financial statements, and to prepare financial statements at the end of each financial year in accordance with the accounting standards endorsed in Saudi Arabia.
The Saudi Organization for Chartered and Professional Accountants publishes the accounting standards endorsed in Saudi Arabia, including IFRS, the financial reporting standard for small and medium-sized entities, and the endorsed updates to those standards.
The Rules on the Offer of Securities and Continuing Obligations require the issuer to prepare its annual financial statements and have them audited in accordance with the accounting and auditing standards endorsed by the Saudi Organization for Chartered and Professional Accountants, and to disclose them within the prescribed periods.
The Saudi Organization for Chartered and Professional Accountants has also endorsed IFRS 18, Presentation and Disclosure in Financial Statements, which applies to annual periods beginning on or after 1 January 2027, with early application permitted, and is applied retrospectively. This illustrates the importance of early preparation for new standards and of analysis of their effects on presentation, disclosure, systems, and the financial reporting cycle.
What the Service Covers
From Applying the Standards to Configuring Systems and Training
The components of the service are designed according to the matter or project concerned, and the final scope is defined in the engagement letter.
New Standards and Amendments
Analysis of the effects of the standards and amendments endorsed by the Saudi Organization for Chartered and Professional Accountants, including preparation for the application of IFRS 18.
Complex Transactions and Calculations
Assessment of contracts and revenue recognition mechanisms under IFRS 15, accounting for leases under IFRS 16, calculation of expected credit losses under IFRS 9, and the actuarial calculation of the end-of-service benefits obligation.
Accounting Policies and Manuals
Preparation or updating of accounting policies and manuals, aligned with the nature of the entity's activity, its transactions, and the applicable financial reporting framework.
Closing Processes and Financial Reporting
Support for periodic closes, resolution of closing matters, and improvement of the cycle for preparing and reviewing financial reports and financial statements.
Systems, Training, and Ongoing Support
Support for the accounting configuration of systems, review of account and report settings, training of accounting teams, and provision of ongoing support where agreed.
Independence and Scope Boundaries
Technical Advice, With Decisions Remaining With Management
Accounting advice is not an audit or a review of financial statements, and it provides no level of assurance on the information, treatments, or deliverables covered by the service.
Management Responsibility
The entity's management remains responsible for selecting accounting policies, approving treatments, assumptions, and estimates, making decisions, and preparing and approving the financial statements.
The Independence Rule
To preserve independence, HHAB does not provide audit or review clients with accounting advice that creates a self-review threat on the matters it audits or reviews. Every engagement is subject to an assessment of independence and conflicts of interest before acceptance.
Forms of Service Delivery
The service may be provided to address a specific accounting matter, to deliver a transition or implementation project, or as ongoing support. The scope of procedures, the deliverables, the duration, and the responsibilities of the parties are defined in the engagement letter.
Zakat and Tax Services Outside the Scope
Zakat and tax services do not fall within accounting advisory services; they are provided under the service scope described on the Zakat and Tax page of this website.
Who This Service Is For
Designed for Entities Facing Accounting Matters That Require a Technical Resolution
From listed companies to small and medium-sized entities, according to the financial reporting framework applicable to each entity.
01
Listed Companies and Companies Preparing for Listing
Entities that need technical support on policies, treatments, new standards implementation, and the quality of the financial reporting cycle.
02
Unlisted Companies
Entities facing complex accounting transactions or needing to develop their accounting policies, closing processes, and systems.
03
Groups and Subsidiaries
Groups that need to unify policies, treatments, and reporting packages across the parent company and its subsidiaries.
04
Small and Medium-Sized Entities and Not-for-Profit Organizations
Entities that need to apply the appropriate financial reporting framework or to move to the full set of standards when needed.
05
Financial and Oversight Leadership
Finance departments, chief financial officers, executive management, and audit committees that need technical analysis or support in applying treatments and policies.
How It Works
From Defining the Matter to Delivery of the Deliverables
The engagement begins by defining the accounting matter or the project objective, and by understanding the entity's activity, the applicable financial reporting framework, the transactions, the systems, and the required deliverables. The scope of the service is then agreed, whether a one-time consultation, an implementation project, or ongoing support, with the topics covered, the responsibilities of the parties, the information required, the timeline, and the deliverables defined.
Working tools, according to the nature of the engagement:
- Gap analysis
- Accounting treatment memoranda
- Contract matrices
- Impact calculation models
- Transition plans
- Checklists
- Workshops
- Review of the accounting settings of systems
The findings and proposed treatments are discussed with management, and the agreed deliverables are then delivered, with implementation support, training, or periodic follow-up provided where included in the engagement scope.
Methodology
The Advisory Work Path
A disciplined methodology that links the requirements of the standards to the entity's actual business and transactions.
1
Establishing the Objective and Scope
Definition of the accounting matter, the financial reporting framework, the required deliverables, and the responsibilities of the parties.
2
Current State Analysis
Examination of the relevant policies, contracts, data, calculations, and systems, and identification of gaps and technical matters.
3
Designing the Treatment
Study of the requirements of the standards and preparation of the technical analysis, calculations, alternatives, and appropriate recommendations.
4
Implementation Support
Preparation of policies, models, journal entries, transition plans, and system requirements, and delivery of the agreed workshops or training.
5
Completing the Deliverables
Discussion of the findings with management, completion of the deliverables approved in the scope, and definition of follow-up procedures or ongoing support.
Deliverables
Documented, Actionable Technical Deliverables
The deliverables included are determined by the nature of the matter or project and the scope of the engagement.
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A gap analysis report: setting out the applicable requirements, the gaps, the effects, and the remediation or transition plan
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Accounting treatment memoranda: documenting the matter, the facts, the technical requirements, the analysis, and the proposed accounting conclusion
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Calculation and analysis models: calculation of the effects of revenue, leases, expected credit losses, end-of-service benefits, and other covered items
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Accounting policies and manuals: accounting policies and procedures designed for the entity's activity and the applicable financial reporting framework
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Implementation and transition plans: execution phases, responsibilities, requirements, and the effects on the financial statements, disclosures, data, and systems
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Systems and training materials: the accounting configuration requirements for systems, checklists, and workshop and training materials, according to the engagement scope
Why HHAB
Disciplined Technical Analysis, With Practical Tools for Implementation
The Professional License
HHAB is a Saudi professional firm licensed by the Saudi Organization for Chartered and Professional Accountants.
The Team and Working Approach
A specialized team that uses technical analysis, treatment memoranda, calculation models, and implementation plans to link the requirements of the standards to the entity's actual business.
Professional Experience
The managing partner has prior professional experience serving listed companies at the Big Four global audit firms.
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HHAB is a Saudi professional firm licensed by the Saudi Organization for Chartered and Professional Accountants.
A team specialized in accounting advisory that works through technical analysis, treatment memoranda, calculation models, and implementation plans, led by prior professional experience serving listed companies at the Big Four global audit firms.
FAQ
Frequently Asked Questions on Accounting Advisory Services
What topics do accounting advisory services cover?
They can cover the application of and transition to standards, the study of complex transactions, the preparation of policies and manuals, the improvement of closing processes and financial reporting, the accounting configuration of systems, and team training. The final scope is determined by the entity's needs.
Is the service intended for listed companies only?
No. The service is provided to listed and unlisted companies, entities preparing for listing, groups and subsidiaries, small and medium-sized entities, and not-for-profit organizations, according to the financial reporting framework applicable to each entity.
Is the service provided as a one-time consultation or on an ongoing basis?
It can be provided to address a specific matter, as an implementation or transition project, or as ongoing accounting support. The engagement letter defines the frequency of the support and the topics and deliverables included.
Does HHAB assist with the first-time application of IFRS?
Yes. The engagement can include gap analysis, identification of policies and elections, preparation of the transition plan, analysis of balances and transactions, determination of presentation and disclosure requirements, and support in preparing the information needed for the application.
Does HHAB support the transition from the standard for small and medium-sized entities to the full set of IFRS?
Yes. The service includes assessment of the differences between the two frameworks, analysis of the effect of the transition on policies, balances, disclosures, and systems, and preparation of the implementation plan and the agreed deliverables.
How does HHAB assist with the application of IFRS 18?
The service can include analysis of classification and presentation in the statement of profit or loss, assessment of totals and subtotals, study of management-defined performance measures, analysis of aggregation and disaggregation requirements, and determination of the effects of retrospective application on comparatives, systems, and reports.
Does the service include the assessment of contracts under IFRS 15?
Yes. It can include review of contract templates, identification of performance obligations and of the transaction price and its allocation, assessment of the timing of revenue recognition, and preparation of a contract matrix and accounting mechanisms that help apply the treatment consistently.
Does the service cover leases, credit losses, and end-of-service benefits?
Yes. It can include the application of IFRS 16 to lease contracts, the calculation of the expected credit loss allowance under IFRS 9, and the actuarial calculation of the end-of-service benefits obligation, according to the engagement scope.
Does HHAB prepare accounting policies and manuals?
Yes. New policies and manuals can be prepared, or existing ones updated, in line with the applicable financial reporting framework and the nature of the entity's activity, its transactions, its structure, and its financial reporting cycle.
Can support be provided for configuring the accounting system?
Yes. The engagement can include analysis of the chart of accounts, the accounting dimensions, and the processing and reporting settings, linking them to the required policies and deliverables, and defining the accounting configuration requirements covered by the engagement.
Does the consultation constitute a binding opinion or an assurance report?
No. Accounting advice is not an audit or a review and provides no level of assurance. Management remains responsible for accounting decisions and for approving the policies, estimates, and financial statements.
Does the service cover zakat and tax matters?
Zakat and tax services are not automatically part of accounting advisory services. These services are provided under a separate scope, and their details are set out on the Zakat and Tax page of this website.
Note: This content is general information and does not constitute accounting advice on any specific transaction or entity. The appropriate treatment varies with the facts, the contracts, the financial reporting framework, and the circumstances of each case. The nature of the procedures, the deliverables, and the responsibilities of the parties are defined in the engagement letter; accounting advice is not an audit or a review, and it provides no level of assurance. The entity's management remains responsible for approving the policies, treatments, assumptions, estimates, and financial statements. Acceptance of every engagement is subject to an assessment of independence and conflicts of interest, and HHAB does not provide a service that creates a self-review threat for a client whose financial statements it audits or reviews. Zakat and tax services are provided under a separate scope described on the Zakat and Tax page of this website.
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