Reflection of the adoption of International Standard on Auditing (ISA 701) in enhancing the quality of financial reports: An analytical study of banks listed on the Iraq Stock Exchange

This research aims to demonstrate the impact of adopting International Standard on Auditing (ISA) 701 on enhancing the quality of financial reporting at the Trade Bank of Iraq (TBI), by focusing on its main dimensions, which are identifying and reporting significant audit matters, communicating with those charged with governance, and documentation. The study adopted a descriptive analytical approach, and data were collected using a questionnaire given to a sample of the bank's internal auditors and examined with SPSS software. The findings revealed a noteworthy positive effect of applying ISA 701 in improving the quality of financial reports by enhancing transparency and increasing the reliability of information provided to users of financial statements. It was also found that the dimensions of identifying and reporting significant audit matters were the most influential in improving the quality of financial reports, due to their role in highlighting material risks and clarifying important issues related to financial performance. In contrast, the results showed that communication with governance bodies and documentation had little direct influence on improving financial reporting quality, despite their professional importance in supporting the audit process. The study showed that the quality of financial reporting at the bank was at a moderate level tending to rise, indicating a good professional foundation with a need for further development. The results confirm that the application of the standard contributes to improving confidence in financial information, but it explains only a limited part of the changes in quality, indicating that there are other influential regulatory and professional factors.