The effect of accounting quality on financial performance - a study on a sample of private Iraqi banks

Abstract

 The research aims to highlight the importance of accounting quality and its impact on financial performance, by explaining the concept and importance of accounting quality and trying to understand the theoretical and applied impact on financial performance. This was done through the use of a sample of (110) observations from Iraqi banks listed on the Iraq Stock Exchange for eleven commercial banks for the period from 2014 to 2023. The research variables were measured quantitatively, as the quality of accounting was measured through four indicators (weak internal control, re-presentation of financial statements, binding laws, regulations and instructions in the field of accounting and auditing, the company's reliance on small audit offices), while financial performance was measured through two indicators (return on assets, Tobin's Q), and the use of the statistical program SPSS²⁷ to test research hypotheses. The results show that there is a statistically significant impact relationship of accounting quality in the financial performance of the banks in the research sample.

The most important conclusion reached is that the quality of accounting contributes to enhancing the financial performance of companies by improving operational efficiency and increasing returns, which enhances investors' confidence and supports their investment decisions. Accounting quality is a sustainable strategy that promotes financial stability, enabling companies to achieve their goals and adapt to market variables more efficiently. In light of the conclusions reached, the researcher recommends that companies should pay attention to enhancing the quality of accounting by adopting high-quality accounting standards that ensure transparency and credibility in the preparation of financial statements, which contributes to improving the relationship with stakeholders and enhances their confidence by providing appropriate and credible financial information that reflects the real performance of the company, which supports attracting more investments.