THE IMPACT OF APPROPRIATE ACCOUNTING INFORMATION IN ENHANCING THE MARKET VALUE OF COMMERCIAL BANKS LISTED ON THE IRAQ STOCK EXCHANGE FOR THE PERIOD (2010-2019)

Abstract

The aim of the current research is to identify the impact of certain accounting indicators on the market value of bank stocks in the research sample. This is achieved by revealing the relationship between some accounting indicators that contribute to understanding the banks' ability to create value, which reflects their future growth, measured by the Return on Equity (ROE), Return on Assets (ROA), Earnings Per Share (EPS), and market value measured by closing price. This research sheds light on the use of these indicators to enhance the market value of bank stocks in the research sample. To achieve the research objectives and hypotheses, Commercial Bank (Credit Bank, Babylon Bank, Gulf Commercial Bank, Baghdad Bank, and United Investment Bank) were selected, and financial data for the research sample banks were relied upon. Financial equations and statistical methods were used for data analysis, using the SPSS V.23 software. Multiple and simple regression methods were employed to test the research hypotheses. The results of the main hypothesis showed an association between accounting information indicators (ROE, ROA, EPS) and the market value index of the stock by approximately 85%. The results of the first sub-hypothesis showed no significant relationship between the Return on Equity indicator and market value, with a weak correlation of about 19%. The study concluded with several important findings, including the absence of a statistically significant relationship in the first sub-hypothesis, despite a weak correlation between the variables, due to the significance level being greater than 0.05, as assumed by the researcher in both hypotheses. The researcher recommended that commercial banks should stop issuing shares, as the stock is trading at less than one dinar, despite the book value of the stock being one dinar.