Accounting disclosure in financial statements and its impact on current and prospective investors decisions

Authors

  • Abbas Fadel Chiyad Lecturer, Accounting Department, Shatt Al-Arab University College, Basra, Iraq

Keywords:

Accounting disclosure, financial reports, Iraq Stock Exchange, accounting information

Abstract

The aim of this article is to clarify the relationship between the quality of accounting information contained in the financial statements published by joint-stock companies and financial institutions operating in the Iraqi Stock Exchange, considering those lists an essential tool for accounting disclosure, and the audience of users of those financial statements, including current and prospective investors, and how to improve the quality of that accounting information. What are the financial statements and their usefulness for their users and what are the characteristics or qualities of the accounting information and the annexed and supplementary explanations and disclosures and the relationship between them and investors in terms of the timeliness of their presentation and dissemination The article also indicates the position of shareholders in the Iraqi market and demands the dissemination of more detailed information about those companies' economic activities and the relevance of financial statement to disclose the information to be available and the ways in which it is prepared in accordance with international accounting standards.

References

There is interest from shareholders in the principle of accounting disclosure of all elements of the balance sheet and income list to the appropriate and sufficient extent to contribute to improving investors' decisions.

The data provided by the shareholders are clear, transparent and credible about the debits and credits independently within the balance sheet list and the degree of cash liquidity of the cash flow statement.

All items of the income statement of revenues and expenses resulting from its operational operations are presented, and details of those items are presented in the statements attached to the statements. Also, unusual items of revenues and other expenses are presented before deducting the tax expense.

Joint stock companies disclose events subsequent to the date of balance sheet preparation that include budget adjustment or only accounting disclosure such as winning lawsuits, decreasing investment value or selling inventory.

The level of accounting disclosure in the financial statements is always associated with the statements of changes in equity in accordance with the applicable accounting policies for foreign transactions and currency conversion.

Financial institutions, especially shareholders, adhere to the principle of transparency in accordance with IFRS issued by the FASB, which helps in financial stability, especially if financial statements contain comparative figures for several years prior.

The existence of certain laws that help to protect investors from individuals or companies and that positively affect the size of their investments and increase the desire of current and prospective investors to increase their confidence in those laws.

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Published

2024-04-26

How to Cite

Abbas Fadel Chiyad. (2024). Accounting disclosure in financial statements and its impact on current and prospective investors decisions. Czech Journal of Multidisciplinary Innovations, 28, 22–33. Retrieved from https://peerianjournal.com/index.php/czjmi/article/view/818

Issue

Vol. 28 (2024): CZJMI

Section

Articles

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