Abstract
The banking sector is reflected as an essential element in the structure of any economy that leads to the growth of financial capacity for various individuals, organizations, businesses, and countries worldwide. Accounting activities are shown in the financial reports of banks, while the relevant literature has found that creative accounting highly impacts the quality of financial reporting. However, previous studies indicated the limited impacts of creative accounting determinants on the quality of financial reporting, whereas the phenomenon of financial reporting quality is still on the track of generating renewed research interests. The present research investigated the implications of corporate social responsibility on enhancing the impacts of the determinants of creative accounting and the quality of financial reporting in the context of commercial banks. A deductive research approach driven by a survey questionnaire was used as the research methodology to attain the objectives. Accordingly, purposive sampling was used to collect responses from 364 employees of Iraqi commercial banks (with a response rate of 72.8%). The data were analyzed statistically using the SPSS v.25 and AMOS v.24 software. The results show significant impacts of corporate social responsibility in moderating the relationship between the determinants of creative accounting and financial reporting quality of banks towards competitive advantages.
Highlights
This study investigates the association between creative accounting determinants and financial reporting quality and addresses the debate on the implications for sustainable business strategies
The first phase was a confirmatory factor analysis (CFA) to assess the overall measurement model, while the second phase involved structural equation modeling (SEM), which included testing the hypotheses of the study
The present study focused on commercial banks, which are considered as the backbone of the national economy of any nation
Summary
This study investigates the association between creative accounting determinants and financial reporting quality and addresses the debate on the implications for sustainable business strategies. Sustainability reporting is an important communication tool for demonstrating transparency and effective governance and is addressed to stakeholders [2]. The need to provide transparency to stakeholders is a driver of enhanced reporting quality [3]. Financial reporting features agreements with providing reliable, accurate, and timely financial data required by stakeholders for making decisions concerning banks’ operations [5]. The objective of financial reporting is to present financial data to users in order to facilitate informed and objective decisions. The present accounting policy provides some choice concerning accounting techniques and the use of objective judgement to define measurement policies, recognition criteria, and, in some cases, the characterization
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