Abstract
The global corporate scandals in the banking industry have gained the government’s attention and other regulatory agencies on the importance of corporate governance, inducing legislation to prevent similar occurrences. Iraq has an emerging economy and corporate governance practices to establish and maintain a quality corporate culture. The study examined corporate governance and political influence on the financial reporting quality (FRQ) of 34 Iraqi banks listed under the 2015 – 2019 stock exchange. Specifically, the study provided a critical literature review on past studies to identify the strength and weaknesses and the literature gap. The study also used secondary data from financial reports. A total sample of 170 observation data was obtained as the analysis unit, selected through market capitalisation. Additionally, multiple linear regression was used to analyse the data using the Stata software. The results showed a positive and significant relationship between board size and FRQ. Conversely, board independence and audit committee independence had insignificant relationships with FRQ. Based on the ownership structure, managerial ownership significantly affected FRQ, whereas the political influence negatively impacted FRQ. Ultimately, the study contributes to the limited literature on the relationship between corporate governance and FRQ in Iraq’s developing economy. Keywords: Corporate Governance, Political Influence, Ownership Structure, FRQ, Iraq. DOI: 10.7176/RJFA/12-20-08 Publication date: October 31 st 2021
Highlights
A listed company’s financial report is a crucial channel for existing and potential investors to make viable decisions
The study examined the impact of board effectiveness, ownership structure and political influence on financial reporting quality (FRQ) of the Iraqi banking sector
Panel data was employed in the study and the Hausman test was used to select between fixed effect and random effect, whereby the fixed effect was selected because the null hypothesis is rejected
Summary
A listed company’s financial report is a crucial channel for existing and potential investors to make viable decisions. The study examines and identifies the link between corporate governance mechanisms and FRQ in board effectiveness, ownership structure, audit quality and political influence in Iraq financial sectors. The study proposed the following: H1 There is a significant relationship between board size and FRQ in the Iraqi banking sector. The study hypothesised as follows: H4 There is a significant relationship between audit committee independence and FRQ in the Iraqi banking sector. 3. Research Data and Methods The study examines the relationship between corporate governance mechanisms, political influence and FRQ of listed banks under the Iraqi Stock Exchange for five years (2015 – 2019). The following regression model was used to evaluate the influence of corporate governance structure and political influence on the FRQ of the banking sector listed under the Iraq Stock Exchange. The study included control variables that may influence the FRQ (firm www.iiste.org size and leverages)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
