The Impact of Financial Information Quality on Investment Decisions: An Applied Study of Private Banks Listed on the Iraqi Stock Exchange

Abstract

This study aims to investigate and analyze the impact of quality of financial statement on investment decisions in private banks listed on the Iraq Stock Exchange from 2009 to 2018. The study examines the influence of financial statement comparability, understandability, and timeliness on return on equity. The research design used in this study was ex post facto, and data collection involved acquiring secondary data from the financial statements of 18 private banks in Iraq. To analyze the data, multiple linear regression techniques were employed. The study results indicate that financial statement comparability, understandability, and timeliness had a statistically significant and positive impact on the return on equity of private banks listed on the Iraq Stock Exchange, each at a significance level of 5%. The practical application of the research findings is noteworthy. The insights gleaned from the study can guide private banks in improving the quality of their financial statements. The implications of the study suggest that enhancing the quality of financial statements can result in higher investor trust and greater transparency in the field of investment. It is important to prioritize efforts to elevate the quality of financial statements. This entails a dedicated emphasis on transparency, a key factor that not only enhances the clarity of financial information but also plays a pivotal role in fostering improved investor confidence and facilitating more informed decision-making processes.