Accounting Disclosure of Digital Currencies in Saudi Arabia: Balancing Digital Dominance With the Lack of Accounting Frameworks

Abstract

This study serves as a focal point for research into the determinants of digital currency disclosure within the realm of financial technology. It aims to evaluate how this disclosure influences the information content found in financial reports, aligning with the guidelines set by the International Financial Reporting Standards (IFRS). The ultimate objective is to enhance the market value of shares in companies listed on the Saudi stock market. To accomplish this, the researcher conducted a survey involving a sample of 150 participants, including accountants, auditors, chief financial officers, and academics specializing in accounting and auditing. Through the utilization of appropriate statistical methods via SPSS, the study provides valuable insights into the impact of digital currency disclosure on financial reports quality within the Saudi stock market. Results show that disclosing the risk management processes for cryptocurrencies and tightening control measures can boost the market value of shares. Transparent disclosure of digital currencies also provides investors with objective assurances on the accuracy of financial data, reducing instances of fraud and earnings manipulation by management. The field study further unveiled notable discrepancies among participants' perspectives on the nature and drivers of digital currencies as financial technology tools. Differences were observed in the impact of digital currencies on accounting frameworks and practices, as well as the varying opinions on disclosure requirements. Interestingly, the study highlighted the moral implications of disclosing digital currencies on stock price movements in the Saudi stock market. Ultimately, the research emphasized the significant influence of digital currency disclosure determinants on rationalizing investors' decisions in the stock market.