Accounting in Uncertain Times: COVID-19 and IFRS in Saudi Arabia's Small and Medium Business

This study examines how uncertainty created by the COVID-19 pandemic reshaped accounting practices in Saudi Arabia's small businesses, particularly focusing on the implementation of International Financial Reporting Standards for Small and Medium-sized Entities (IFRS for SMEs). The research explores how small businesses navigated financial reporting challenges during one of the most uncertain periods in modern economic history. Employing a qualitative approach, this study conducted 42 semi-structured interviews during the third quarter of 2020 with key stakeholders across various industries in Saudi Arabia's small business sector. Due to pandemic restrictions, interviews were conducted via telephone and video conferencing platforms. Data analysis utilized NVivo software for thematic coding and pattern identification. Small businesses in Saudi Arabia faced unprecedented accounting challenges during COVID-19, revealing five primary areas of impact: cash flow disruptions requiring enhanced reporting, new disclosure requirements for pandemic effects, operational challenges affecting financial statements, inventory valuation complexities, and unexpected positive impacts in essential sectors. The study reveals that uncertainty fundamentally altered how small businesses approach financial reporting and stakeholder communication. This research provides the first comprehensive analysis of how accounting practices in small businesses adapted to extreme uncertainty during the COVID-19 pandemic in Saudi Arabia. The findings offer critical insights for understanding accounting resilience during crisis periods and inform strategies for maintaining financial reporting quality during uncertain times.