THE ROLE OF ACCOUNTING INFORMATION IN ENHANCING FAIR VALUE MEASUREMENT OF ASSETS AND LIABILITIES OF LISTED INSURANCE FIRMS

Fair value measurement is vital in financial reporting, especially for insurance firms with complex assets and liabilities. However, in Iraq’s insurance sector, its implementation is hindered by market illiquidity, lack of active markets, inadequate valuation tools, and poor disclosure. This study evaluated how accurate, timely, and verifiable accounting information can enhance fair value measurement and improve financial reporting quality for listed insurance firms in Iraq. This study adopted ex-post facto research design, analysing existing data from 5 listed insurance firms in Iraq using a census sampling method due to the small population size. Covering the period from 2015 to 2024, the research spanned different financial and regulatory phases. Panel regression analysis was used to examine variable relationships, leveraging the longitudinal nature of the data to enhance accuracy, control for unobserved factors, and ensure robust results. The regression conducted found that accounting information proxied with faithful representation, timeliness, and value relevance had positive and significant effects on the fair value measurement of assets and liabilities of listed insurance firms in Iraq. The findings imply that when insurance firms in Iraq provide accounting information that is faithfully represented, timely, and value-relevant, they tend to have more reliable and accurate fair value measurements of their assets and liabilities. This strengthens investor confidence, transparency, and the quality of financial reporting in the insurance sector. The study concluded that the faithful representation, timeliness, and value relevance of accounting information are critical in supporting effective fair value measurement in Iraq’s insurance sector. This study suggested that the regulatory bodies should establish more robust frameworks and standards to enforce timely, accurate, and verifiable accounting disclosures in the insurance industry.