IFRS adoption and credit rating in Iraqi banks : the mediating role of governance and implications for agricultural finance
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"This research originated from the recognition that expected credit losses place substantial emphasis on Credit Rating (CR) when assessing loan loss provisions. This emphasis arises due to the pronounced influence of increased provisions In contrast to the relatively diminished effect on non-performing loans under the International Financial Reporting Standards (IFRS). Accordingly, the study sought to explore the mediating function of Corporate Governance Mechanisms (CGMs) in the relationship betv.reen IFRS implementation and the CR of Iraqi banks listed on the Iraq Stock Exchange. To achieve this objective, the research employed structural equation mooelhng to analyse the intermediary role of CGMs within the IFRS--CR nexus. The corporate governance framewclfk was assessed using three specific mechanisms: Board Size (BS), female representation on the board (SEX), and the percentage of maior shareholding (MSP). For the measurement of CR, the study adopted the CM1ELS model as a proxy. The sample consisted of ten banks listed on the Iraq Stock Exchange over the periOO from 2013 to 2022_ The study produced several notable findings. One key result indicated considerable variation in the degree of compliance with IFRS across Iraqi banks_ Furthermore, it was established that both BS and MSP exert a significant influence on CR. However, the analysis revealed that the three selected CG Ms did not serve as mediators in the relationship betv.reen IFRS and CR Nonetheless, a marginal indication was observed suggesting that major shareholder ownership might exert some influence on the dynamic betv.reen IFRS application and CR. These findings have important policy implications for the agricultural finance sector, suggesting that improvements in the CR of rural banks could be achieved through the adoption of IFRS and the enhancement of banking governance structures. Such reforms may, in tum, facilitate greater access to credit for agricultural stakeholders" -- first page
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This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License.