AUDIT COMMITTEE CHARACTERISTICS, REGULATORY CHANGES AND FINANCIAL REPORTING QUALITY IN IRAQ: SOME LESSONS FROM SOX ACT

Thisstudy aims to examine the impact of audit committee characteristics such as audit committee size, audit committee meetings, audit committee independence, andthe financial expertise of audit committee on the quality of financial reporting in non-financial firms operating in Iraq. In addition to that the study also examinesthe direct and moderating role of regulatory changes atthe nexus between audit committee characteristics and quality of financial reporting in the context of non-financial firms in Iraq. Theparticularfocus of the study is on the implications of Sarbanes-Oxley Act in Iraq.For this purpose, the authorselects170 organizations as the study sample which comprisesa total of 850 firm-year observations. For further analysis, only575 organizational-years observations areincluded.The multiple regressionmodelis used to analyze thisdata. Referring to the resource dependencetheory, results indicate that characteristics of anAudit Committee are highly resourceful, which leads toenhancement of the financial reporting quality because of the expertise, greater skills, and shared experiences. The regulatory changes also appear to be a significant direct and intervening factor in the relationship between the characteristics of an Audit Committee and reporting quality in the non-financial firms of Iraq.