The Implications of the Shift towards Standard Financial Reporting Specialist for Small and Medium-Sized Companies to Attract Foreign Investment in the Iraqi Environment
Small and medium-sized entites (SMEs) are the main backbone of the economy of any country, whether developed or developing, where these companies are characterized by their high capacity to provide jobs, and are the main drivers of further technological innovations and are therefore considered one of the main engines of the growth of the economy. Given the importance of the role played by small and medium-sized entites (SMEs), the International Accounting Standards Board (IASB) issued an international standard for small and medium-sized entites (SMEs) in 2009 and an amendment was made in 2015, instead of the full set of comprehensive international Financial Reporting Standards (IFRS) that Designed for companies that trade their financial markets, and in the light of Iraq's approach to adopting international accounting standards, especially since 2016 has been implemented by Iraqi banks with the aim of this research to determine the applicability of the international Financial Reporting standard for medium-sized companies And small in the Iraqi environment and what are the consequences if it is applied to the Iraqi economy, especially in attracting foreign investment. The research has reached a number of conclusions, the most important of which are: 1) the transition to the fi-nancial reporting standard for small and medium-sized entitles (SMEs) in the Iraqi environment remains incomplete in terms of the appropriate political environment and the legal and legislative environment that initiates this transformation as well as the economic and regulatory environment; 2) the common accounting system applied in small and medium-sized entites (SMEs) has become highly criticized due to its obsolescence, although it has been amended in 2011 but does not conform to the requirements of international standards. The main recommendations of the research are: 1) the need to undertake radical reforms at various political, legal, economic and regulatory levels with a view to creating the appropriate environment required by the process of transition towards the financial reporting standard for small and medium-sized entites; 2) the professional and regulatory bodies of the accountancy and auditing profession in Iraq (the Financial Supervisory Board, the Association of Accountants and Auditors, the Board of Accounting and Supervisory Standards, the Auditing and Audit Profession Council) should exercise their real role and be the leader in the process of transformation.
Cite this paper
ALasdy, S. M. H. and Mahmoud, B. I. (2019). The Implications of the Shift towards Standard Financial Reporting Specialist for Small and Medium-Sized Companies to Attract Foreign Investment in the Iraqi Environment. Open Access Library Journal, 6, e5205. doi: http://dx.doi.org/10.4236/oalib.1105205.
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