Enhance financial efficiency under IFRS standards to reduce financial fragility/An empirical study of the reality of crises in Iraq using Data envelopment analysis

Abstract

The research aims to test the impact of the adoption of international financial reporting standards (IFRS) in the relationship between financial efficiency and financial fragility in the Iraqi banking sector, in light of periods of financial crises. In a way that contributes to managing, these crises by standing on the help foundations that reduce the effects of those crises represented in reduce financial fragility. The research sample has been identified in 20 private commercial banks listed on the Iraq Stock Exchange, for the period (2013-2018), the period (2014-2016) has been identified as a period of financial crisis given the conditions that Iraq has gone through. Two indicators were identified to measure financial fragility. They are; first indicator (Z-score) in agreement with the study (Ashraf et al., 2016), and the second indicator (Hedge, Speculative, and Ponzi) in agreement with the study (Torres Filho et al., 2017). The financial efficiency has been measured Using Data Envelopment Analysis (DEA). While the role of (IFRS) was represented by the extent to which adopt the research sample banks for these standards. The research reached a set of results, the most important of them, high financial efficiency affects in reduce levels of financial fragility, and this effect is constrained and reduced in light of the adoption of IFRS, and that this restriction of influence appears more clearly during the crisis period. While it does not appear within the periods before and after the financial crisis.