The Impact of Financial Flexibility on the Value Relevance of Accounting Information: an applied study in a sample of companies listed on the Iraq Stock Exchange
Article Sidebar
THIS IS AN OPEN ACCESS ARTICLE UNDER THE CC BY LICENSE
Main Article Content
Abstract
The present study aims to quantify and evaluate the financial flexibility of firms listed on the Iraq Stock Exchange, as well as to assess and analyse the value relevance of their accounting information, and to examine the relationship and impact of financial flexibility on that value relevance. To achieve these objectives, a primary hypothesis was formulated and tested within an applied research framework employing quantitative and mathematical analysis. Annual financial statements of the selected firms and the Exchange’s official bulletins for the period 2014–2023 served as the data sources. The sample comprised nineteen companies listed on the Iraq Stock Exchange. Financial flexibility was measured using the current ratio and the debt‑to‑asset ratio, while the Ohlson (1995) model was employed to gauge value relevance. The findings reveal a statistically significant negative effect of financial flexibility—as proxied by the current ratio—on the value relevance of accounting information, and an economically positive but statistically insignificant effect of financial flexibility—as proxied by the debt‑to‑asset ratio—on the same. Among the key recommendations is that firms should revisit their liquidity policies to strike a balance that ensures financial stability without undermining the value relevance of their reporting, and reassess their leverage strategies as a means to enhance that relevance.
Downloads
Article Details
References
اولاً. المصادر العربية:
أ. النشرات الرسمية
نشرة سوق العراق للأوراق المالية
ب. الرسائل والأطاريح الجامعية
الأسدي، سيف الدين أحمد عواد، (2021) "تحليل مؤشرات المرونة المالية للشركات وتأثيرها في الأداء المالي"، رسالة ماجستير، كلية الإدارة والاقتصاد، قسم العلوم المالية والمصرفية، جامعة كربلاء.
الظالمي، ام البنين عبدالكاظم مايع، (2023)" أثر الإفصاح البيئي عن المواد البلاستيكية وأليات الحوكمة على ملائمة قيمة المعلومات المحاسبية والأداء المالي لعينة من الوحدات الاقتصادية في العراق ودول مجلس التعاون الخليجي"، أطروحة دكتوراه، كلية الإدارة والاقتصاد-جامعة المثنى.
شنشول، محمد حيدر محمد، (2019)" قياس تأثير القدرة الادارية في ملائمة قيمة المعلومات المحاسبية: بالتطبيق على عينة من الشركات المدرجة في سوق العراق للأوراق المالية " رسالة ماجستير، قسم المحاسبة، كلية الادارة والاقتصاد، جامعة بغداد.
ج. البحوث والدوريات
الجرف، ياسر أحمد السيد مُحمد، (2017)"الإفصاح المحاسبي في ظل معايير التقرير المالي الدولية وأثره على ملاءمة المعلومات المحاسبية- دراسة نظرية تطبيقية"، كلية التجارة، جامعة طنطا. https://atasu.journals.elsb.eg 1107-1055
الدباغ، حارث غازي، (2024) " المرونة المالية وأثرها في قيمة الشركة: دراسة في عينة من الشركات المدرجة في سوق العراق للأوراق المالي "، مجلة الريادة للمال والاعمال، المجلد 5، العدد 1، ص: 161-173.
جابر، علي عباس، (2023) " دور المرونة المالية في الحد من التعثر المالي: دراسة تحليلية لعدد من الشركات الصناعية المساهمة في سوق العراق للأوراق المالية للفترة من (2009-2019)"، مجلة الغري للعلوم الاقتصادية والإدارية، مجلد (19)، العدد (3)، ص، 319-319.
عياش، أحمد. (2023). المرونة المالية وتأثيرها على قيمة الشركات المدرجة في السوقين الأردني والفلسطيني. مجلة أبحاث الأعمال، 19(4)، 95-110.
ثانياً. المصادر الاجنبية
Abaku, Boma& Verr, Bernard & Ndiyo, Ayara Ndem. 2024. “Effect of Liquidity and Profitability on Value Relevance of Listed Fina ncial Companies in Nigeria.” International Journal of Research and Innovation in Social Science, Vol. VIII, Issue II, pp. 696–712. DOI: 10.47772/IJRISS.2024.802048.
Ahmed, F. A., Abdullah, A. S. H., Jasim, M. A. H., & Abdulameer, A. H. (2021). The Impact of Financial Flexibility On the Financial Stability of Banks: An Analytical Study of a Sample of Iraqi Banks FOR THE PERIOD FROM 2006 TO Academy of Entrepreneurship Journal, 27(6), 1-11.
Ahmed, Y. A., & Saeed, V. S. H. (2023). The impact of sustainable tax on firm value an applied study in a sample of companies listed on the Iraq Stock Exchange.
Alotaibi, A. (2020). “The Impact of Financial Flexibility on Earnings Quality: Evidence from Emerging Markets.” Journal of Accounting and Public Policy, 39(2), 105–124.
Al-Sulayvani, N. I. M., Saeed, N. K., Ismail, B. Y., & Younus, A. A. (2025). The impact of cash holdings on financial performance: Evidence from Iraq. Asian Economic and Financial Review, 15(2), 256.
Angahar, P. A., & Alematu, A. (2014). Impact of working capital on the profitability of the Nigerian cement industry. European journal of accounting auditing and finance Research, 2(7), 17-30.
Azar, N., Zakaria, Z., & Sulaiman, N. A. (2019). “The Quality of Accounting Information: Relevance or Value‑Relevance?” Asian Journal of Accounting Perspectives, 12(1), 1–21. PDF
Bilyay‑Erdogan, S. (2020). “Does Financial Flexibility Enhance Firm Value? A Comparative Study Between Developed and Emerging Countries.” Business: Theory and Practice, 21(2), 723–736.
Byoun, S. (2008). How and when do firms adjust their capital structures toward targets. The Journal of Finance, 63(6), 3069-3096.
Denis, D. J. (2011). Financial flexibility and corporate liquidity. Journal of corporate finance, 17(3), 667-674.
Hasanaj, Petrit & Kuqi, Beke, "Analysis of Financial Statements: The Importance of Financial Indicators in Enterprise", Humanities and Social Science Research; Vol.2, No. 2, 2019
Islam, M. R., Wang, M., & Dewri, L. (2019). “Financial Flexibility – A Synthesis of Literature Review.” International Journal of Accounting and Financial Reporting, 9(1), 239–262. PDF
Lambrinoudakis, C., Skiadopoulos, G., & Gkionis, K. (2019). Capital structure and financial flexibility Expectations of future shocks. Journal of Banking & Finance, 104, 1-18.
Marwick, A. E., Fontaine, C., & boyd, d. (2020). Reality and reputation: Influence and authenticity in the social media landscape. In P. J. Boczkowski & Z. Papacharissi (Eds.), Trump and the media (pp. 19–45). MIT Press.
Melianti, M. K.(2022). Financial Flexibility and Business Risk Effect on Capital Structure: Insight from Indonesian Energy Listed Companies Vol.1.
Mirlohi, S. Mojtaba, & Nikoukar, Samaneh. (2024). Effective machine learning methods for feature selection. Journal of Electrical Systems, 20(3), 9675–9689.
Mutumanikam, P. R., & Adelin, D. (2024). The Impact of Financial Leverage on Firm Performance in Emerging Markets: An Empirical Analysis. Dinasti Accounting Review, 2(1), 40–46. https://doi.org/10.38035/dar.v2i1.1037
Nelwan, M. L., Simatupang, C., & Tansuria, B. I. (2020). Value relevance of accounting information in the presence of earnings management. Jurnal Reviu Akuntansi dan Keuangan, 10(2), 321. https://doi.org/10.22219/jrak.v10i2.11856
Nguyen, T., & Rahman, A. (2022). “Corporate Crisis, Disclosure Quality, and Investor Trust.” Journal of Business Finance & Accounting, 49(2), 290–317. PDF
Nukala, V. B., & Prasada Rao, S. S. (2021). Role of debt-to-equity ratio in project investment valuation, assessing risk and return in capital markets. Future Business Journal, 7(1), 13–32. https://doi.org/10.1186/s43093 021 00090 5
Odoemelam, N., Okafor, R. G., & Ofoegbu, N. G. (2019). Effect of international financial reporting standard (IFRS) adoption on earnings value relevance of quoted Nigerian firms. Cogent Business & Management, 6(1), 1643520.
hlson, J. A. (1995). Earnings, book values, and dividends in equity valuation. Contemporary Accounting Research, 11(2), 661–687.
Phan, T. D., Hoang, T. T., & Tran, N. M. (2022). Cash flow and financial distress of private listed enterprises on the Vietnam stock market: A quantile regression approach. Cogent Business & Management, 9(1), 2121237.
Tungsriwong, S. (2022). Value relevance of IFRS‑based accounting information adoption: Evidence from listed companies in Thailand. Journal of Business, Economics and Communications, 17(1). Retrieved from https://so02.tci-thaijo.org/index.php/BECJournal/article/view/247937
Zhang, L. (2018). “Financial Constraints and Earnings Management: International Evidence.” The International Journal of Accounting, 53(1), 45–70.
Campello, M., Graham, J. R., & Harvey, C. R. (2010). The real effects of financial constraints: Evidence from a financial crisis. Journal of Financial Economics, 97(3), 470–487.