The Impact of IFRS 9 Adoption on Financial Reporting Quality of the Palestinian Banking Sector: The Moderating Role of Audit Committee Attributes رسالة دكتوراة

Abstract

This study examines the impact of adopting the International Financial Reporting Standard (IFRS 9) on the quality of financial reporting in the Palestinian banking sector, focusing on the moderating role of audit committee attributes. These attributes are related to the committee's size, independence, meetings and expertise. The study population includes all listed banks on the Palestine Exchange (PEX), and the sample consists of listed banks on the PEX whose financial reports are available during the study period. The panel data is collected yearly from the annual audited statements of listed banks on the PEX from 2014 to 2023. The study uses the deductive approach to achieve its aims; linear regression analysis, multiple regression, and moderation analysis using the PROCESS v4.1 tool are conducted to determine the role of audit committee attributes as a moderating variable on the relationship between IFRS 9 adoption and the reporting quality and analyze interactions among these variables. The study considers the optional phase for applying IFRS 9 from 2014-2017, the mandatory phase for applying from 2018-2023, and the entire period from 2014-2023. Three main hypotheses are tested, and the study finds that adopting IFRS 9 significantly positively impacts financial reporting quality. Audit committee attributes show no significant impact on the reporting quality during any analyzed period (2014–2017, 2018– 2023, or 2014–2023). Besides, the committee's size, independence, and meetings have no significant moderating effect on the relationship between IFRS 9 adoption and reporting quality, while the expertise negatively moderates this relationship. The study recommends improving the Palestinian banking sector by enhancing technical systems and improving financial reporting systems to support applying IFRS 9. It also recommends strengthening the committee's function to boost the quality of reporting. Furthermore, the study suggests expanding research, such as examining the impact of IFRS 9 on sectors beyond banking and exploring the role of FinTech and artificial intelligence in improving financial reporting quality and adopting international standards.