Evaluating the Compatibility of Iraq’s 2024 Unified Accounting System with International Financial Reporting Standards ( IFRS)

Abstract

This study evaluates the alignment of Iraq’s 2024 Unified Accounting System with International Financial Reporting Standards (IFRS), focusing on three conceptual dimensions: identifying financial report users, defining reporting objectives, and clarifying the fundamental elements of financial statements. Although accounting provides essential economic information to reduce uncertainty and improve decision-making, variations in regulatory environments and user needs have historically created differences across national accounting systems. In Iraq, reliance on a traditional rule-based model has limited the relevance of financial reports for external stakeholders.

The 2024 Unified Accounting System attempts to bring Iraqi accounting closer to international practices; however, it faces challenges in identifying primary users, formulating decision-oriented objectives, and clearly defining financial statement elements. The study used a quantitative survey methodology, distributing 400 questionnaires to accountants, auditors, financial controllers, and academics in both public and private sectors, with 200 valid responses (50%). A five-point Likert scale measured perceptions regarding user identification, reporting objectives, and conceptual alignment with IFRS. Reliability testing showed strong internal consistency (Cronbach’s alpha = 0.84).

Results indicate that although the system identifies internal and external users, only 30% of respondents believe that primary users—investors and creditors—are clearly prioritized, signaling moderate alignment with IFRS. Reporting objectives were also found to be weak, with only 25–32.5% agreeing that they emphasize decision usefulness or cash-flow information. Moreover, the conceptual definitions of assets, liabilities, equity, revenues, and expenses remain unclear, with only 7.5–20% perceiving them as IFRS-consistent. The system continues to rely on historical cost rather than fair value, reducing the usefulness of financial information.

The study concludes that Iraq’s 2024 Unified Accounting System is not yet fully compatible with IFRS and recommends revising its conceptual framework and engaging academic experts to improve alignment with global standards.