The impact of the application of IFRS in improving the informational content of financial reports and its reflection on the value of the company

 (A comparative analytical study in a sample of Iraqi and Jordanian companies listed in the financial market)

Submitted by the student

Ali Razoki Abood

To the Council of the College of Administration and Economics – University of Karbala

It is part of the requirements for obtaining a master’s degree in accounting sciences

Supervised by Dr. Jassim Idan Barak  Mamouri

Abstract

     Companies in general, especially industrial companies, whether local or international, strive to achieve the desired goal of achieving profits that enable them to continue practicing their activities, due to the importance, position and global reputation that brings the attention of local and foreign investors, and to provide the best services to their customers. By creating healthy environment and better working conditions which enables the company to place its name among the ranks of international companies, so it has become necessary to work on the application of International Financial Reporting Standards (IFRS), due to the requirements imposed by these standards in the preparation, presentation, disclosure, measurement and proof of elements of financial reports, Which is concerned with a comprehensive understanding of the nature of accounting work and the economic conditions surrounding it, in addition to accuracy, sobriety, clarity, transparency and increased confidence in the financial data, as it works to standardize financial reports in an understandable and comparable manner, enabling users to identify the financial events that actually occurred during the reporting period, In order to make appropriate economic decisions regarding them that are economically rational.

      In order to achieve the objective of the study, five Iraqi industrial companies listed on the Iraq Stock Exchange that prepare their financial reports according to the unified accounting system were selected, compared with five Jordanian industrial companies listed on the Amman International Market that prepare their financial reports according to (IFRS) for the period (2015-2019), The value of the company was calculated by means of liquidity indicators represented by (circulation ratio, quick ratio, total debt ratio, debt to equity ratio), and profitability indicators represented by (gross profit margin ratio, operating profit margin ratio, net profit margin ratio And the rate of return on assets), and the study resulted in several conclusions, the most important of which was that the application of (IFRS) affects improving the quality of the informational content of financial reports by adding qualitative characteristics (appropriate and honest representation) of the elements of the financial statements that reflect the real financial events that users can understand. Analyzing them and take an appropriate decision regarding them, and in light of the conclusions, a set of recommendations was reached, the most important of which was that Iraqi companies should pay more attention to disclosure, presentation and preparation of financial reports, especially ambiguity surrounding some amounts by creating the right conditions and the ideal real environment to switch to IFRS in the near future.