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E-ISSN : 2249 - 4642 | P-ISSN: 2454 - 4671



The Impact of Accounting Conservatism on Predicting the Financial Performance of Economic Units

Assist. Lec. Tariq Hatim Rahi, Prof. Dr. Abbas Hamid Yahya Al-Temimi

Volume: 13 Issue: 3 2023


The rapid changes taking place in the modern business environment, the fierce competition between economic units, the scarcity of economic resources, and the exposure of many of them to financial failure or bankruptcy, predicting financial performance has become inevitable. Forecasting the financial performance of the Iraqi economic units. And that the main objective of this research is to build a model to predict the financial performance of the Iraqi economic units. By using financial ratios and accounting conservatism, and verifying the effectiveness of accounting conservatism in helping to improve the ability of the model to forecast the financial performance of the Iraqi economic units. The researcher used a special model to predict the financial performance of the economic units, through analyzing the financial statements of the research sample units, amounting to (55) economic units listed in the Iraq Stock Exchange from the research community consisting of (141) economic units listed in the market. The researcher reached a set of conclusions, the most prominent of which is that the analysis of financial ratios is not a complete method of evidence in the analysis of financial statements, although its use is widespread, but it has some limitations and limitations due to the different administrative policies. It was found that the economic units with weak financial performance had a low level of accounting conservatism, relative to the units with good financial performance.

DOI: http://doi.org/10.37648/ijrssh.v13i03.024

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