A Quantitative Analysis of IFRS’ Impact on Earnings Management and Financial Performance in the Kurdistan Region

Abstract

This study investigates the impact of adherence to International Financial Reporting Standards (IFRS) on earnings manipulation, stakeholder confidence, and financial performance in private companies operating in the Kurdistan Region. Using a quantitative research approach, the study analyzes the extent to which IFRS implementation enhances financial transparency, reduces earnings management, and improves organizational outcomes. This was done using a regression analysis of 100 questionnaire responses collected from professional human resources in the Kurdistan Region's private companies. The results indicate that adherence to IFRS significantly curtails earnings manipulation, fosters stakeholder trust, and positively influences financial performance through improved profitability and operational efficiency. Conversely, earnings management practices were found to have a detrimental effect on financial performance, highlighting the need for robust governance and regulatory frameworks. These measures aim to improve financial disclosure and decision-making, contributing to the long-term stability and growth of companies in the Kurdistan Region. By demonstrating the importance of IFRS compliance, the findings underscore the critical role of transparent and effective financial reporting in fostering organizational excellence and sustainable development.