The Effect of Accounting Earnings Quality on The Cost of Capital: Iraqi for seeds production firm as a case studyThe Effect of Accounting Earnings Quality on The Cost of Capital: Iraqi for seeds production firm as a case study

Abstract

 The purpose of this study is to investigate the connection between the cost of capital and accounting earnings quality in businesses that are listed on the Iraq Stock Exchange. The quality of earnings indicates how much users depend on accounting data when making financial decisions. As a result, low-quality earnings can raise risk and uncertainty, which raises the cost of capital. The study employed a series of financial variables, including accounting accruals, earnings frequency, and stability, to assess the quality of earnings for a sample of listed firm from 2013 to 2022. The research used EViews 13 for finding and analaysing financial data by correlation and multi-regression.

The study discovered a statistically significant negative correlation between the cost of capital and earnings quality. It shown that businesses with high-quality earnings had a lower cost of capital because investors are taking on less risk. Additionally, the findings demonstrated that certain segments of the Iraqi market are more susceptible to this impact than others. To improve earnings quality, the report suggests strengthening governance procedures and financial disclosure. This will improve the Iraqi stock market's efficiency, draw in investment, and lower the cost of capital.