Using XBRL to deposit financial statements in Saudi Arabia

11th of March, 2015

Agenda

• What is Qawaem?

• Qawaem Objectives

• Qawaem Features

• e-Filing Workflow

• What is XBRL?

• Benchmark

• List of Achievements & Statistics

• Next Steps

2

What is Qawaem?

3

• Qawaem is a program to deposit and view financial statements electronically

using XBRL

• Financial statements validation

• View financial ratios

• User management with rights and responsibilities control

• Deposit companies information such as board of directors’ information,

announcements, and dividends

• Notifications services to firms and accountants

• Help MCI to supervise and control firms by applying business rules (governance

and compliance)

What is Qawaem?

Qawaem Objectives

5

Qawaem Objectives

• Support the credibility of financial statements to beneficiaries such as MCI,

DZIT, banks and others

• Speeding up the process of submitting financial information to relevant parties

• Preventing firms from issuing many financial statements for the same period for

the same client

• Conduct financial and economical analytical reporting to be used by analysts

and government researchers

• Benchmark reporting within a specific sector

Qawaem Features

7

• Define the fiscal year

Qawaem Features

• Accounting firm authentication

Qawaem Features

• Numbers validation across all statements

Qawaem Features

• Totals calculation

Qawaem Features

• MCI governance and compliance rules

Qawaem Features

• Financial Statement (Before)

Qawaem Features

• Financial Statement (After)

Qawaem Features

e-Filing Workflow

15

e-Filing Process (1) - Accounting firm

16

Co

mp

any

Acco

un

ting

MC

I

Signing contract

Registration user

Filing Financial

Statements

Review

Save Financial

Statements

Audit Financial

Statements

Notify Company

and Auditor

Start

End

NO

Yes

Filing process (2) - Companies

17

Co

mp

any

Acco

un

ting

MC

I

Signing contract

Filing Financial

Statements

Review

Save Financial

Statements

Audit Financial

Statements

Notify Company

and Auditor

Start

End

NO

Yes

ReviewNo

Yes

What is XBRL?

18

• eXtensible Business Reporting Language (XBRL) is one of a family of “XML”

languages which is becoming a standard means of communicating

information between businesses

• XBRL is about electronic transfer of business reporting data.

• To able using XBRL we need to have both: Instance document & Taxonomy

• Three taxonomies have been developed: banks, insurance, and other

companies

What is XBRL?

Benchmark

20

5 entities analyzed in the benchmark study

21

Country Entity Key highlight of benchmark

• Self sustained entity• Revenues of $100+ M & operating income of ~$10M in 2013

• Enables New Zealand to rank world #1 for starting a business and protecting investors (World Bank)

• Focus on the creation of a trusted business and regulatory environment

• Focus on financial markets and regulations

• Focus on simplifying the interaction between businesses and government

List of Achievements & Statistics

List of Achievements

• Launched the program on 1st of January, 2015. The implementation was less

than a year

• Migrated more than 10,000 historical financial statements of 2013, 2012, 2011

• Developed three main taxonomies: Banks, insurance and other companies

• Conducted workshops in Riyadh, Jeddah and Dammam to train the accounting

firms

• Developed access channels for banks, DZIT and other government agencies

• Developed all required business rules to apply governance and compliance

Business entities statistics

• Types of main business entities:

Joint stock companies: about 1,100

Limited liabilities companies: about 48,000

Sole proprietorship: about 1,150,000

• Joint stock companies and limited liabilities companies are mandated by law to

submit their annual financial statements

• There are about 147 licensed accounting firms

Statistics of financial statements deposited in Qawaem in 2015

# Legal entity Number of companies

1 Limited Partnership 6

2 Limited Liability Company with Mixed Ownership 22

3 General Partnership 5

4 Limited Liability Company 216

5 Joint-Stock Company with Mixed Ownership 2

6 A Branch of Foreign Limited Liability Company 7

7 A Branch of Foreign Joint-Stock Company 6

8 Foreign Limited Liability Company 10

9 Limited Liability Company with GCC Ownership 6

10 Joint-Stock Company 52

11 Foreign Joint-Stock Company 1

12 Joint-Stock Company with GCC Ownership 2

13 Sole proprietorship 100

Total 435

The total of Financial Statements that have been deposited in Qawaem is 467

Next Steps

26

Next Steps

• Develop a new taxonomy to cover the non-profit organizations

• Develop a BI tool to do financial analysis and reporting among companies

• Develop ranking reports among business entities in revenue, cost and others

within the same sector

• Design customized financial reports for banks

• Establish a B2B credit bureau company to exchange trade credit information

among business entities