The Impact of Implementing IFRS 9 Requirements on The Efficiency of Risk Management Practices: An Exploratory Study of The Perspectives of Employees In Iraqi Commercial Banks
DOI:
https://doi.org/10.56956/0vvy9v18Keywords:
IFRS 9, expected credit loss, risk management efficiency, Iraqi commercial banks, practitioner perceptionsAbstract
Although the Central Bank of Iraq has been mandated to implement IFRS 9, its impact on efficiency of risk management practices in Iraqi commercial banks is not sufficiently studied. Iraqi studies so far have focused mainly on earnings management, expected credit losses and capital adequacy but rarely on this relationship from banking professionals’ point of view; hence, this paper investigates how applying IFRS 9 requirements affects risk management efficiency in Iraqi commercial banks. A quantitative survey approach was used with an electronic questionnaire administered over four months to a purposive sample of 117 accountants, financial officers and administrative staff from 44 bank branches in Baghdad and other Iraqi governorates. The measurement scales were reviewed by ten experts and high reliability was found. Data were analyzed using SPSS through descriptive statistics and simple linear regression. Medium levels of implementation of IFRS 9 and efficiency of risk management were found. Disclosure was the weakest area of implementation while continuous monitoring of risk and use of accounting information in risk-related decisions were the weakest aspects of risk management. Also, implementation of IFRS 9 had positive and statistically significant effect on risk management efficiency. This study provides practitioner-based empirical evidence from the understudied Iraqi banking sector to archival research by showing practical implications of standard implementation. The Central Bank of Iraq and bank management should enhance disclosure and continuous risk monitoring to improve IFRS 9 implementation and risk management practices.
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