•  
  •  
 

Abstract

This research will examine how digital transformation influences the quality of earnings of the commercial banks in the Iraqi Stock Exchange. The research problem is that there is no clear picture of what constitutes the relationship between investment in digital assets and the quality of earnings and there is debate on whether digital transformation helps in improving the quality of earnings or that it does not have a significant effect, especially in the new banking environment like Iraq.
The importance of the study is the fact that it presents direct quantitative data of this relationship through the quantifiable financial indicators. Digital transformation was the intensity of digital assets (the ratio of digital assets to total assets) and the quality of earnings (the ratio of net income to the operation cash flow (NI/CFO)) and two control variables (return on assets (ROA) and bank size, the natural logarithm of total assets.
The research took a quantitative methodology with audited annual financial statements of eight Iraqi commercial banks as the timeframe of 2010-2024. The hypotheses were tested using Pearson correlation coefficient, coefficient of determination (R 2), simple and multiple linear regression model and the analysis of variance (ANOVA).
The findings revealed statistically significant positive impact of digital transformation on earnings quality with a coefficient of determination of 0.632 which means that the intensity of digital asset is related to 63.2 per cent of variance in earnings quality. The findings confirm that more investment in digital assets is directly related to the quality of earnings of the studied banks.

Keywords

Digital transformation, Earnings quality, Commercial banks

Download

Share

COinS