Vol: 16, Issue: 2 2026

Page: 139-185

The Reflection of Applying the IFRS 7 'Financial Instruments: Disclosures' on the Development of Auditing Procedures and Compliance with Its Requirements

Balqees Lazim Kabashi, Dr. Sohad Sabih Al-Saffar

Received Date: 2026-04-19

Accepted Date: 2026-05-20

Published Date: 2026-05-22

http://doi.org/10.37648/ijtbm.v16i02.010

The research aims to demonstrate the impact of applying IFRS 7, "Financial Instruments: Disclosures," on the development of auditing procedures and their requirements in Iraqi banks. The study focused on assessing the extent to which private banks recorded on the Iraq Stock Exchange comply with the requirements of IFRS 7, and analysing the effect of this compliance on the design and implementation of auditing procedures from the auditors' perspective. The main research hypotheses were formulated as follows: Private banks comply with the supplies of IFRS 7 regarding financial instruments, as reflected in the accuracy and fairness of financial report presentation. There is no statistically significant correlation between agreement with IFRS 7 supplies and the design of auditing procedures. There is no statistically significant effect between agreement with IFRS 7 supplies and the design of auditing procedures. A comprehensive checklist was prepared that included the essential requirements of the IFRS 7 and applied to a sample consisting of four private banks. The results showed that Ashur Bank ranked first in terms of compliance with the required disclosures, followed by Middle East Bank and Gulf Commercial Bank, while Trans Iraq Bank was the least compliant. The results also indicated support for international auditing standards concerning the integration of IFRS 7 requirements in the development and implementation of audit procedures. The analysis of the questionnaires revealed a strong positive correlation and impact between the implementation of IFRS 7 and the development of audit procedures, which enhances the quality and effectiveness of audit processes in banks. The study recommends adopting a proposed model for designing audit procedures in compliance with the stipulations of IFRS 7, and the necessity of developing additional audit procedures that align with the Iraqi environment and support the move towards full compliance with international financial reporting standards, in line with the policies of the Central Bank of Iraq regarding the enhancement of transparency and financial disclosure.

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