The Role of International Financial Reporting Standards (Ifrs) In Reducing Information Asymmetry: An Applied Study on a Sample of Arab Banks

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The Role of International Financial Reporting Standards (Ifrs) In Reducing Information Asymmetry: An Applied Study on a Sample of Arab Banks

Subhi Saleh *a        &     Rebin Tayeb Rashid b

Salahadin University/ College of Administration and Economics – Noble Institute 2014/ Accounting Department.

Abstract                                

The information asymmetry in financial reports in the global financial and banking environment is a complex problem as a result of the rapid developments and changes imposed by the globalization of financial markets, and the free movement of capital between advanced economies and the economies of emerging and developing countries, including Arab countries. Given the growing gap of financial information between Arab banks and the poor quality of information and information asymmetry. The research suggested a hypothesis that adopting IFRS enhances the consistency of information in the published financial statements of local and Arab banks. To achieve the research objectives. The researcher adopted the quantitative approach based on the literature on the relationship between IFRS and the problem of information asymmetry. The quantitative model included financial variables to analyze the activity of applying IFRS decrease the problem of information asymmetry in Arab banks. The research found a set of results, the most important of which is that IFRS plays a big dollar and narrowing the gap of asymmetry of information in the financial statements published in Arab banks.In the context of these results, the researcher reached a set of recommendations that see the commitment of Arab banks, especially the Iraqi ones, in the broad and effective implementation of IFRS as a basic pillar in reducing the uniformity of information, narrowing the scope of differences in accounting reporting, as well as emphasizing the activation of the supervisory role of Arab financial markets in narrowing the scope Weakness in the application of these standards in order to enhance the level of quality of accounting information that leads to the development of the level of consistency of information to ensure the level of transparency and meets the needs of decision-makers for the accounting information in the financial statements and reports published for Arab banks.

DOI:10.52113/6/2021-11/241-252

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