Cover
Volume 7, Special Issue 4 (2026)

Published: August 25, 2026

Pages: 257-267

Research Article

The role of internal auditing in enhancing the transparency of financial reporting: A field study of a sample of companies listed on the Iraq Stock Exchange for the Period from 2023 to 2025

Alaa H. K. Al-Rubaie 1 Adnan N. Khudhair 2
1Director of the internal audit and control department, general directorate of education of Basra governorate, Basra, Iraq
2Senior audit manager, general directorate of education of Basra governorate, Basra, Iraq
History
  • Received: June 13, 2026
  • Available Online: August 25, 2026
DOI

https://doi.org/10.56967/ejfb2026935

Abstract

This study aimed to examine the impact of internal auditing on the transparency of financial reports in companies listed on the Baghdad Stock Exchange. The study sought to identify the nature of the relationship between the effectiveness of internal auditing and financial reporting transparency, measure the effect of internal audit independence on the credibility of financial information, and determine its role in reducing accounting errors and financial manipulation. The study adopted a descriptive-analytical approach and used a questionnaire as the primary tool for data collection. The sample consisted of employees working in auditing, accounting, administrative departments, and other stakeholders concerned with financial reporting. A total of 259 valid questionnaires were collected and analysed. Appropriate statistical methods, including the Chi-Square test, were employed to evaluate the study hypotheses. The findings revealed a statistically significant relationship between internal auditing and the transparency of financial reports. The results also indicated that the independence of internal auditors, their direct reporting relationship with the board of directors, and their unrestricted access to financial records and information significantly enhance the credibility and transparency of financial reporting. Furthermore, the study confirmed that internal auditing plays a significant role in reducing accounting errors and financial manipulation, improving the quality of financial disclosure, and supporting management in making sound financial decisions. The study concluded that internal auditing is an effective control and managerial tool that contributes to strengthening transparency, accountability, and the quality of financial reporting in companies listed on the Baghdad Stock Exchange. The study recommends enhancing the independence of internal audit units, providing adequate support and resources, adhering to international professional standards, and continuously developing the competencies of internal auditors to increase confidence in financial reports and improve the investment environment.

Keywords

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