Scientific Journal Of King Faisal University
Basic and Applied Sciences


Scientific Journal of King Faisal University / Humanities and Management Sciences

The Role of Sectorial Specialization of the External Auditor in Activating the Application Procedures of Corporate Governance in Saudi Arabia

(Mohamed A Elsagheer and Abdul-Rahman A Al-Muharfi)


This research aims to study the impact of external auditor’s sector specialization on activating governance procedures of companies in Saudi Arabia. To shape the theoretical framework of the study, the inductive approach is adopted through an analytical study of the literature related to the research or some of its aspects. The deductive approach is also used in the field study of the research through lists of questionnaires to test the hypotheses. Accordingly, a significant result has been reached, that is: the sector specialization strategy may support corporate governance measures by improving external auditor's abilities of planning, fraud detection, reduction of management practices on profitability management, understanding non-financial information, and assessing whether the economic unit may be able to continue or not. The research presented some recommendations as follows: The external auditor’s sector specialization strategy should be adopted. There is also a need to develop governance rules to support the idea of sector specialization of external auditor. Lastly, the different capabilities of audit offices should be coordinated to achieve a perfect application of sector specialization strategy. Key Words: Corporate Governance, Disclouser and Transperacy, Fraud and Manipulation, Sectoral Specialization, Stackholders.