The Impact of Integrated Reporting on Earnings Quality: The case of Iraq

Abstract

The present study aims to carry out an analysis of the influence of integrated reporting on
earnings quality in the Iraqi commercial banks listed in the Iraqi stock exchange from 2015 until
2024. The empirical approach is adopted in the present study. A sample of (10) Iraqi commercial
banks constitute the research sample. The level of integrated reporting is measured through the
(IR Score) that is based on the International Integrated Reporting Council (IIRC) framework.
Earnings quality is measured through the Loan Loss Provisions (LLP) model. The statistical
analysis results reveal that there is a statistically significant influence of integrated reporting on
enhancing earnings quality. The results indicate that the increase in the level of integrated
reporting leads to improving earnings reliability. The results also indicate that the bank size and
return on assets have a positive influence on earnings quality. On the other hand, the results
reveal that financial leverage (debt) has a negative impact on earnings quality. In light of the
findings, the present study recommends the Iraqi commercial banks and the Iraqi Central Bank to
adopt practices of integrated financial reporting, enhance governance and internal monitoring
systems, and manage the funding structure in a more efficient manner in order to enhance the
quality of financial reports and secure investors’ confidence.