Measuring and Analyzing the Quality of Profits and their Role in Financial Performance - An Applied Study in A Sample of Iraqi Banks

Abstract

The goal of the current study is to examine the relationship between financial performance indicators and earnings quality for a sample of five commercial banks that are listed on the Iraq Stock Exchange for the period 2001-2005. The extraordinary form of abnormal accruals, also known as discretionary accruals as a measure of the quality of earnings, is a modern scale that was developed by Dechow in 1995. The financial performance indicators have been used as profit ability ratios (the rate of return on equity ROE, the rate of return on investment ROI, and profit margin) as measures of financial performance, the research to a number of conclusions was the most important, there has been a general decline in the quality of earnings during the search for all sample banks. And the relationship between the quality of earnings and the rate of return on equity was a strong inverse, with a direct correlation with the rate of return on investment and profit margin, as well as a direct correlation with the rate of return on investment and profit margin.