The Impact of the Relationship between Company Characteristics and the Audit Committee on the Quality of Financial Reports (A Field Study on a Sample of Iraqi Private Companies)

The current study primarily aimed to determine the impact of the relationship between company characteristics and the audit committee on the quality of financial reports in its various dimensions (formal, temporal, and informational content). The study also sought to identify the influence of company characteristics on the quality of financial reports across these dimensions. The audit Committee role in improving financial report quality was the first area that the survey examined; this includes looking not just where audits. The study employed a descriptive and then analytical approach to achieve the goal of answering its research question. The study population included all senior management personnel at Iraqi private businesses, responsible auditors and members of audit commissions. From a variety of industries five companies were chosen, yielding a sample of 500 possible contacts (average 100 staff / company). A random sample of 219 participants was selected using the formula that Richard Geiger came up with. Questionnaires were sent to the participants, and all the responses accepted. After analyzing the data and testing the hypotheses using SPSS software, several key findings were revealed, the most significant being: • Company characteristics significantly affect the quality of financial reports. These characteristics provide an accurate and objective depiction of the company's financial position, aiding investors in making informed investment decisions. • Iraqi companies' unique characteristics notably affect the formal dimension of financial report information, as the company's reputation and business relationships are reflected in the reports' format, influencing investors' valuation of shares. • The timeliness of financial report information is vital in attracting investors. It reflects the company's growth and continuity in the market, significantly affecting its valuation. • Company characteristics influence the content of financial reports, including financial data and accompanying disclosures, thereby providing precise information for investors. • Audit committees play a pivotal role in ensuring the integrity and transparency of financial information, enhancing trust, and reducing errors in financial reports. They also contribute to improving the organizational structure of financial information, facilitating data comparability across different periods and entities. • The results indicate that audit committees improve the accuracy of the temporal information presented, boosting the reliability of information provided to the public. Additionally, audit committees assure investors that financial data are free from material errors, positively affecting investment decisions. • The research has shown that the relationship between company characteristics and audit committees enhances the verifiability of financial reports and also builds investor confidence. However, this research finds that if committee independence and effectiveness are not sufficiently so a very close relationship between enterprises (or groups of companies) and audit committees may have undesirable effects on quickness in presenting accountings. • The findings underscore that the unique characteristics of a company directly influence the content of its financial reports, highlighting the importance of having influential audit committees to ensure the credibility of the presented information.