The extent of commitment of Iraqi banks to the International Financial Reporting Standard (IFRS) 7: Financial Instruments: Disclosures
DOI:
https://doi.org/10.61841/jvz25978Keywords:
International Financial Reporting, IFRS, Financial Instruments, DisclosuresAbstract
With the obligation for Iraqi entities to fully comply with International Financial Reporting Standards (IFRS) evidently declared in Iraqi companies in order to provide more transparent information to the users of financial statements. The purpose of this study is to assess the extent of Iraqi banks’ commitment to fully applying the International Financial Reporting Standard 7 disclosure requirements.
The researcher uses the method of factor analysis and variance analysis to achieve that goal. In compliance with the disclosure standards of IFRS 7, the analysis found that the relative value of transparency in the financial statements (income statement, financial position statement, and cash flow statement) is not comparable. With obvious confirmation of the lack of statistical significance between the existence and size of the relevant statements as per the income statement, the financial position statement, and the banks' cashflow statement in Iraq. The study findings confirm conclusions from prior studies that claim poor disclosure quality in light of IFRS 7 as a continuing phenomenon, pointing to this as a result of deliberate lack of commitment by banks to fully comply with disclosure requirements stipulated by IFRS 7.
Downloads
References
Amoako, G. K., & Asante, S. (2012). Compliance with International Financial Reporting Standard 7 (IFRS 7): A study of
listed banks in Ghana. Research Journal of Finance and Accounting, 3(4), 66-73.
Armstrong, C. S., Guay, W. R., & Weber, J. P. (2010). The role of information and financial reporting in corporate
governance and debt contracting. Journal of Accounting and Economics, 50(2), 179-234.
Banks, E. (2014). Liquidity risk—managing funding and asset risk (2nd ed.). Palgrave: Macmillan.
Bamber, M., McMeeking, K., & Petrovic, N. (2016). The determinants of applicability compliance and quantity of
mandatory disclosure under International Financial Reporting Standard 7, Financial Instruments: Disclosures. MS-15-12-
737 Working Paper series.
BCBS. (2014). Basel Committee on Banking Supervision. International Convergence of Capital Measurement and Capital Standards. A Revised Framework.
Bean, A. (2016). An exploration of the usefulness of the disclosures of derivatives in company annual reports. Doctor of
Philosophy Thesis. Queensland University of Technology.
Birt, J., Ranking, M., & Song, C. L. (2013). Derivatives use and financial instruments disclosure in the extractives industry.
Accounting and Finance, 53(1), 55-83.
Bischof, J. (2009). The effects of IFRS 7 adoption on bank disclosure in Europe. Accounting in Europe, 6, 167-194.
Cipullo, N., & Vinciguerra, R. (2014). The impact of IFRS 9 and IFRS 7 on liquidity in banks: Theoretical aspects.
International Conference on Accounting Studies ICAS 2014. 164, pp. 91-97. Kuala Lumpur, Malaysia: Procedia - Social
and Behavioral Sciences. Retrieved from https://www.sciencedirect.com
Camfferman, K., & Zeff, S. A. (2007). Financial reporting and global capital markets: A history of the International
Accounting Standards Committee, 1973-2000. New York: Oxford University Press.
Cosmulese, G. C. (2017). Comparative studies on the disclosure of information about intellectual capital in financial
reports of entities in different parts of the world. Prospects of accounting development: The young researcher's view.
ASEM, 45-53. Retrieved from https://ase.md/files/catedre/cae/conf/conf_con_22.11.17.pdf
Deloitte. (2015). Financial Instruments Disclosure. IAS Plus. Retrieved from
https://www.iasplus.com/en/projects/completed/fi/fi-disclosures
Dunne, T. (2003). Derivatives reporting: The implications of recent accounting standards for corporate governance and
Accountability. PhD Thesis. University of Dundee, UK.
El-Daher, C. (2003). Financial sector, Iraq United Nations/World Bank Joint Needs Assessment
Ernst & Young. (2008). Observations on the implementation of IFRS 7 in corporate entities. United Kingdom: EYGM
Limited.
Giner, B., & Arce, M. (2012). Lobbying on accounting standards: Evidence from IFRS 2 on share-based payments.
European Accounting Review, 21(4), 655-691.
Hassan, M. S., Percy, M., & Stewart, J. D. (2006). The value relevance of fair value disclosures in Australian firms in the
extractive industries. Academy of Management Journal of Accounting and Finance, 2, 21-41.
Hoogervorst, H. (2013). Breaking the boilerplate. IFRS Conference, Amsterdam.
Hopwood, A. G. (1994). Some reflections on 'The harmonization of accounting within the EU.' European Accounting
Review, 3(2), 241-254.
Hossain, I. (2014). Regulatory compliance of IFRS #7 of the banks' disclosures: A case study of the nationalised banks of
Bangladesh. Banglavision, 13(1).
IASB. (2004). ED7 Financial instruments: Disclosures. London: International Accounting Standards Board.
Jobair, M., Hossain, M. I., & Ahmed, M. K. (2014). Compliance of IFRS 7: A study on the state-owned specialized banks
of Bangladesh. European Journal of Business and Management, 6(21), 46-53.
Johansen, T. R., & Plenborg, T. (2013). Prioritizing disclosures in the annual report. Accounting and Business Research,
43(6), 605-635.
Jorissen, A., Lybaert, N., Orens, R., & van der Tas, L. (2012). Formal participation in the IASB's due process of standard
Setting: A multi-issue/multi-period analysis. European Accounting Review, 21(4), 693-729.
Jorissen, A., Lybaert, N., Orens, R., & van der Tas, L. (2013). A Geographic analysis of constituents' formal participation
In the process of international accounting standards setting, do we have a level playing field? Journal of Accounting and
Public Policy, 32(4), 237-270.
Looney, R. (2005). Postwar Iraq’s Financial System: Building from Scratch. Middle East Policy Council, 12(1).
Mahoney, J. P., & Kawamura, Y. (1995). Review of 1994 disclosure about derivative financial instruments and fair value
of financial instruments. Financial Accounting Series. FASB.
Murcia, F. D., & Santos, A. D. (2010). Evidence of International Financial Reporting Standards (IFRS) implementation
in Brazil: The case of derivatives. Working Paper. University of Sao Paulo, Brazil.
Papa, V., & Peters, S. (2013). User perspective on financial instruments risk disclosures under IFRS - derivatives and
hedging disclosures. London: CFA Institute.
Ryan, S. G. (2012). Risk reporting quality: Implications of academic research for financial reporting policy. Accounting
and Business Research, 42(3), 295-324.
Socoliuc, M., Grosu, V., & Hlaciuc, E. (2017). Romanian enterprises behaviour in the process of improvement of
economic and financial disclosure quality. Economic Annals, 167, XXI.
Strouhal, J. (2009). Reporting frameworks for financial instruments in Czech: Czech Accounting practices versus
International Financial Reporting Standards. WSEAS Transactions on Business and Economics, 6, 352-361.
Suddaby, R., Cooper, D. J., & Greenwood, R. (2007). Transitional regulation of professional services: Governance
dynamics of field-level organizational change. Accounting, Organizations and Society, 32(4), 333-362.
Tahat, Y., Dune, T., Fifield, S., & Power, D. (2016). The impact of IFRS 7 on the significance of financial instruments
disclosure: Evidence from Jordan. Accounting Research Journal, 29(3), 241-273. Retrieved from https://
doi.org/10.1108/ARJ-08-2013-0055
Tauringana, V., & Chithambo, L. W. (2016). Determinants of risk disclosure compliance in Malawi: A mixed-method
approach. Journal of Accounting in Emerging Economies, 6(2), 1-44.
Zango, A. G., Kamirdin, H., & Ishak, R. (2015). Mandatory International Financial Reporting Standard 7 (IFRS 7) Disclosure by Listed Banks in Nigeria. Academic Journal of Interdisciplinary Studies, 4(2), 435-440. doi:10.5901/ajis.2015.v4n2p435
Downloads
Published
Issue
Section
License
Copyright (c) 2020 AUTHOR
This work is licensed under a Creative Commons Attribution 4.0 International License.
You are free to:
- Share — copy and redistribute the material in any medium or format for any purpose, even commercially.
- Adapt — remix, transform, and build upon the material for any purpose, even commercially.
- The licensor cannot revoke these freedoms as long as you follow the license terms.
Under the following terms:
- Attribution — You must give appropriate credit , provide a link to the license, and indicate if changes were made . You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- No additional restrictions — You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Notices:
You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation .
No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.
