The Effect of the Items off Balance Sheet (Assurances) on the Financial Crisis and the Importance of Accounting An applied study of a sample of private banks affiliated to the Iraqi market for securities
AL-Qadisiyah Journal For Administrative and Economic sciences,
2012, Volume 13, Issue 3, Pages 199-249
AbstractThis study aimed at showing the merits of the global financial crisis and particularly its relationship to the items outside the budget or the so-called financial derivatives as the commercial banks are usually interested in handling the items outside the budget on a large scale because of the lack or weakness of international controls of their use. That the applications may have the wrong led to the bankruptcy of many financial institutions (banks) as well as the methods and traditional accounting rules of the items outside the budget (financial derivatives) are not coordinated and non-binding in terms of their ability to reflect the benefits and risks of financial institutions. The principles of sound corporate governance for these items in the banks that can foster greater credibility to the audit profession as one of the most important pillars of realizing the concept of corporate governance, and upgrading them to meet the changes of contemporary, and thus became necessary to develop principles and rules and ways to deal with such financial instruments . With the suggestion of the best ways and means to be measured and disclosed in financial statements to provide the owners of interests accounting information that will help them to take the necessary decisions in a timely manner as well as managing risks. The study focused on item and one of the items outside the budget and is (loan guarantees), which was the main reason behind the occurrence of the global financial crisis. The banks are facing a problem in the evaluation of these guarantees, so the reference is to the value of the safeguards currently required to be different from its value in the future, and this is what happened in the financial crisis.
The study found that the quality of accounting information provided and the extent of sincerity and integrity and conformity with the truth, and also in the presence of mechanisms able to control and monitor the health of this information to avoid the risk and fraud and manipulation that can result from the accounting practices deceptive for information by displaying a fake aim to influence the outcome of the financial institution to affect the decisions of dealers in the market.
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