Publication Date: 2025
International Journal of Economics and Finance Studies (13098055)17(3)pp. 29-52
This study aims to explore the joint effect of accounting fraud and financial performance indicators on the crash risk of stock price for the banking industry. This study considers a dataset of 11 banks traded on the Tehran Stock Exchange and 6 banks traded on the Iraqi Stock Exchange for a period of 2015-2023. This study uses the discretionary accruals method to represent accounting fraud to measure the effect of crash risk of stock price. This study considers the NCSKEW and DUVOL methods to represent crash risk of stock price. This study finds that accounting fraud has a strong positive impact on crash risk of stock price for the respective country datasets. This study finds evidence that supports the concept of the existing bad news hoarding theory for banks. This study finds that accounting fraud affects crash risk of stock price to a higher level for Iraqi banks than Iranian banks. This confirms that institutional differences impact accounting fraud for crash risk of stock price datasets. This study considers control variables to develop a theoretical conceptual framework for better understanding of crash risk of stock price. This study finds that crash risk of stock price to a lower level for banks with higher size, age, and profits. This study finds that banks with higher leverage indicate a higher probability for crash risk of stock price. This study validates the analysis by utilizing the Beneish M-Score method to represent accounting fraud for crash risk of stock price. This study considers a CRASH dummy test to validate the analysis. This study contributes to the existing crisis theory for crash risk of stock price for banking industry by identifying three key points. First, this study introduces a theoretical concept that banking industry institutions impact accounting fraud for crash risk of stock price theory to advance future crisis theory for banking industry study requirements. This study explains that a banking industry study should focus on safety enforcement to develop transparency to enhance audit quality to develop banking industry stability for developing countries like Iraq for banking industry crisis theory. This study introduces a warning message to stakeholders to demand awareness to demand carefulness to demand prudence to demand caution while analyzing banking industry profits that banking industry profits induce for developing country crisis theory for banking industry. Taken together, the results contribute to a better understanding of the impact of accounting fraud on emerging market economies with respect to financial system integrity. © 2025, Social Sciences Research Society. All rights reserved.
Publication Date: 2024
International Journal of Economics and Finance Studies (13098055)16(3)pp. 305-320
Auditors’ personality affects audit quality, as an auditor performance function. Auditing may attract many personalities and require different personalities. This leads to the existence of different categories of personality features resulting in varying audit quality. This study examines the impact of auditor personality traits (agreeableness, extraversion, neuroticism, conscientiousness, and flexibility) on audit quality (auditor judgment and professional skepticism). The research statistical is all certified auditors in Iraq. For data analysis, the collected data were first entered into Excel and then analyzed using statistical software. In this study, ten hypotheses were formulated. The results indicate that extraversion, agreeableness, flexibility, neuroticism, and conscientiousness are positively related to audit quality (auditor professional skepticism). Additionally, extraversion and conscientiousness are in a positive relation with audit quality (auditor professional judgment), while flexibility and agreeableness negatively with audit quality (auditor professional judgment). Out of the ten hypotheses designed, nine were accepted, and only one hypothesis (the eighth) was rejected, indicating that neuroticism does not positively impact auditor professional judgment. © (2024), (Social Sciences Research Society). All Rights Reserved.
Publication Date: 2024
International Journal of Economics and Finance Studies (13098055)16(4)pp. 212-231
Objective: Given that many factors in identifying fraud are consistent with the audit methods used by the auditor, using an efficient and effective audit method such as risk-based auditing can be a big step in identifying fraud in auditing. Therefore, the purpose of this article is to examine the effect of risk-based continuous auditing on reducing fraud. Research Methodology: The statistical population of this study includes financial experts and consultants, as well as professors in economics and finance who have at least 10 years of experience in the fiscal year 2024. Due to the limitation of the statistical population, the subjects were studied using a random-access method, and the questionnaire collected after removing corrupted copies or containing incomplete answers, 133 copies were included in the analysis. Findings: The results of the research questions showed that the tools used in continuous auditing, cooperation with external institutions for continuous auditing, managers’ goals for continuous audit reports, and the type of industry reduce the possibility of fraud. Also, the amount of adjustment in continuous audit reports, the objectives of the internal audit unit, and the number of members of the internal audit committee do not affect the reduction of fraud. In general, the results indicate that risk-based continuous auditing reduces fraud. © (2024), (Social Sciences Research Society). All rights reserved.
Publication Date: 2023
Heritage and Sustainable Development (27120554)5(2)pp. 351-362
Skill, experience, and expertise are three factors that might influence the quality of an audit; forensic accountants can conduct higher-quality audits since they have completed a specialized fraud course. Thus, the purpose of this article is to examine how forensic accounting methods affect the caliber of audits. All of the businesses that are listed on the stock exchanges in Tehran and Iraq make up the statistical population. To determine the sample, 35 enterprises from 2013 to 2020 in Iraq and 100 companies from 2014 to 202 in Iran were chosen using the systematic elimination approach. The study hypotheses were tested using the multi-variate regression model that was based on the combined data. The findings indicated that the quality of audits in Iran and Iraq is positively impacted by forensic accounting techniques. Additionally, the findings demonstrated that the number of independent audit report paragraphs in Iran and Iraq is not significantly impacted by the forensic accounting technique. The importance and application of accounting and forensic auditing are felt more than before due to the lack of professional activities related to forensic accounting in the Iraqi economic environment, the rise in cases of financial embezzlement and corruption, the need for financial discipline along with economic development, and the preservation of public trust in the accuracy of financial information. Thus, doing this research can help enhance the corporate climate in Iran and Iraq by determining the significance and requirement of implementing forensic auditing. © The Author 2022.
Publication Date: 2023
Periodicals of Engineering and Natural Sciences (23034521)11(4)pp. 27-39
The primary purpose of this research is to investigate the relationship between the quality of the external audit and the quality of the financial reporting done by companies that are traded on the Tehran and Baghdad Stock Exchanges. The experience of the auditor in the sector, the auditor's reputation, and the auditor's length of service were utilized as determining factors for the quality of the external audit. In order to determine whether or not the reporting of financial data can be trusted, discretionary accruals are analyzed. The companies that are members of the Tehran Stock Exchange and the Baghdad Stock Exchange make up the statistical population for the current study. They were chosen using the process of systematic elimination, which was applied to 102 firms that were admitted to the Tehran Stock Exchange and 35 companies that were admitted to the Baghdad Stock Exchange. In order to examine the data, multiple regression analyses were performed. According to the findings of the study, the quality of financial reporting at the Baghdad Stock Exchange is not significantly impacted by the standard of external auditing. In addition, the independence of the Tehran Stock Exchange's financial reporting is directly and considerably impacted by the quality of the audits conducted by external parties. The findings, taken as a whole, suggested that in order for enterprises to function properly in Iraq they need a secure and politically stable environment. This, in turn, has an effect on the accuracy of the reports they provide. On the other hand, the profession of auditing in Iraq is still in its formative stages, and auditors need to have a deeper understanding of their respective industries. © The Author 2023. This work is licensed under a Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) that allows others to share and adapt the material for any purpose (even commercially), in any medium with an acknowledgement of the work's authorship and initial publication in this journal.
