The impact of the external auditor’s professional specialization in enhancing financial performance and its reflection on the company’s going concern
Thesis submitted to the Board of the Faculty of Management and Economics – University of Karbala, which is part of the requirements for the degree of Doctor of Philosophy in Accounting
By
Marwa Muhammad Hassan Al-Aridi
Supervised Under
Assistant Professor Dr Amal Mohammed Salman Al-Tamimi
Abstract:
The research aims to shed light on the intellectual framing of the professional specialization of the external auditor, know its importance, study the extent of the impact of its elements on financial performance, and then explain the theoretical and practical impact of each of them on the continuity of the company, by applying it in 12 private commercial banks whose shares are listed on the Iraqi Stock Exchange for the period Extending from (2016-2022) and 83 views.
The variables were measured quantitatively by relying on the annual financial reports of a sample of Iraqi banks listed on the Iraqi Stock Exchange, relying on the weighted market share measure that is extracted through the product of multiplying the market share percentage by the portfolio share percentage to measure the level of professional specialization of offices and companies. The audit practiced auditing the banks in the research sample, and Tobin’s Q model was relied upon to measure the financial performance of the banks in the research sample by dividing the ratio of the market value of the company’s outstanding shares plus total liabilities by the total assets at book value. Altman’s model was also relied upon to evaluate the extent of the ability of the research sample banks to Continuity in practicing its commercial activities, and the research hypotheses were tested using the anova test and path analysis by using both the Statistical Package for the Social Sciences (SPSS) program and the statistical analysis program (Eviews), as well as the Amos statistical program to test the reversal of the relationship.
Among the most important findings of the research, the applied results of the research showed that there is an acceptable level of professional specialization for the audit offices and companies that worked on auditing the financial reports of banks (the research sample), which is a positive indicator for improving the professional competence of auditors and increases the ability and efficiency of auditors in detecting financial fraud and reducing Audit risks, but it did not affect the progress and improvement of the company’s performance. The results of the statistical analysis also showed that financial performance inversely affects the company’s continuity, while the results of the statistical analysis showed that there is a direct effect of the professional specialization of the external auditor on the company’s continuity, and its effect is not reflected through the mediating variable (performance). The most important recommendations emphasized by the research are the need to confirm and follow up on the Iraqi Stock Exchange for banks and other economic sectors, and the importance of assigning specialized auditing offices and companies due to their professional competence and their ability to detect violations and assess the risks of material misstatement and management practices in manipulating profits, which contributes to enhancing disclosure. And transparency in financial reports, which in turn is reflected in enhancing the company’s performance on the one hand and improving its reputation in the stock market on the other hand, thus increasing the chances of its continuation and survival.
