American Journal of Business Management, Economics and Banking ISSN (E): 2832-8078 Volume 12, | May, 2023 P a g e | 163 www.americanjournal.org THE ROLE OF CORPORATE GOVERNANCE IN REDUCING THE NEGATIVE IMPACT OF CREATIVE ACCOUNTINGON THE RELIABILITY OF THE INTERIM FINANCIAL INFORMATION Lina Khalid jaafer ibrahim leenakhalid679@gmail.com Mohammed A. Alhasan Mohammed Aeshah A. Kareem Abdulsattar Iraq - Iraqi University - College of Administration and Economics A B S T R A C T K E Y W O R D S The importance of the study stems from the importance of the topic of governance Corporate and creative accounting and reliability of the interim financial information as one of the important and relatively recent topics., especially in relating of the companies’ administrations using creative accounting methods to show the result of the activity of those companies according to what they were looking forward to as short-term goals, even if it was on account of other departments, which led to the financial crisis as a result of the collapse the bankruptcy of some of the world's largest companies. So, this study dealt with the concept of creative accounting, The factors that contributed to its emergence, and motives, the most important methods used in the financial statements and the most important actions to detect accounting creativity and limiting it, as corporate governance came at the forefront of these measures, after the Iraqi reality has been highlighted. The study concluded a set of results, the most important on the existence of a role of corporate governance in limitation the negative affect of creative accounting on the reliability of the interim financial statements, Iraq has not yet committed to applying principles of governance corporate despite its role in limitation creative accounting practices. The study came out with a set of recommendations, the most important of the recommendation to update and develop regulations and laws to keep step with the requirements of governance, a developed guide includes the most important principles that must be adhered to and stipulates penalties in case of violation. It also recommended conducting studies related to strengthening the ethical aspects of accountants and auditors to reduce the manipulation and practices of creative accounting and emphasizing on role of company’s boards of directors, also should consider when forming members of the audit committees, they have practical experience and technical qualifications in the field of accounting and auditing. American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 164 www.americanjournal.org Introduction: It has not passed long time from the appearance of the era of globalization and the emergence of the economic knowledge and the dominance of technical information and communications over the world, the openness of the market and e-commerce until major events emerged on its arenas, including business failures, the collapse of major companies, financial corruption and shortcomings in management and oversight, despite the efforts made by international organizations and bodies to set regulatory frameworks that depend on independence, accountability, transparency and comparability and the accompanying development in the intellectual framework in accounting and auditing standards, but Globalization is fast-tracking towards the change has been led to take away the administrative, social professional values and ethics. Some of those in charge of the management, stakeholders, directors in companies found a chance to fraud the companies ‘treasury by inflating and manipulating the numbers and showing false successes and fake ratios in an attempt to raise stock prices in the financial markets or to keep them high, Therefore, many ideas and proposals for development and regulation appeared from the skilled accountants and auditors but managing and directors board prevented these ideas and solutions from coming in reality, so the catastrophes of collapse came to emphasize the need to the professional restructuring and reconsidering the provided services on the one hand, and focusing on corporate governance systems and management standards behaviors on the other hand. To reach to the financial stability, which is one of the most fundamental goals of the international community, where it has become a general and urgent necessity imposed by the expansion and intertwining of economies. For all the above, the issue of corporate governance has become one of the important topics that imposes, especially in the companies and international organizations that seek to avoid the risks of default and financial failure, as well as its role in maximizing the market value of the company to ensure its growth and continuity, and thus providing performance standards to detect cases of data manipulation. This concept is based on three main pillars represented in risk management, disclosure, and control in turn, contributes as a line of defense towards the creative accounting practices and re- purposing sharpness in the wave financial statements to serves a wide range of internal and external users. The first topic: research methodology and previous studies First: The problem of the study: The spread of profit management has led to misinformation and the blurring of facts, which has result ed in many scandals and collapses of major international companies. The concept of governance has spread and is expected to be able to give its effective implementation, to limit innovative accounting practices. Of course, it can play a m ajor role in dispelling investors' and stakeholders' concerns about the credibility of financial stateme nts. Based on the foregoing, the problem of the study is to find an answer to th following questions: 1- How does the application of corporate governance principles reduce the negative impact of creative accounting on the reliability of interim financial statements? 2- How does the application of corporate governance mechanisms diminish the negative influence of creative accounting on the reliability of interim financial statements? American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 165 www.americanjournal.org 3- Has the government authorities in Iraq presented the strategy of governance to reduce creative accounting practices on the reliability of interim financial statements? Secondly: objectives Study: The objectives of this study can be defined as following: 1- To deepen knowledge of creative accounting and the risk and motivation of its practice. 2- Attempt to demonstrate the extent to which corporate governance contributes to increased confiden ce among different stakeholders in companies' financial statements and reports. 3- Identify the most important innovative accounting methods used in the preparation of the inte rim financial statements. 4- To identify the role of auditors in restrictive the creative accounting procedures practiced in the preparation of interim financial statements. 5- To learn how the application of the Governing Council's responsibilities principle has limited t he effects of creative accounting on the reliability of interim financial statements. Third: Study Hypotheses: The research is based on the premise "there is no graciously significant relationship between applying corporate governance principles and reducing the negative impact of creative accounting on the reliability of interim f inancial statements" Fourth: The purpose of the study: The importance of scientific study stems from the position of corporate governance and creative accounting as significant and relatively new topics, especially since the managements of companies use creative accounting methods to show the results of the activities of companies according to what they were looking for as short- term goals, even at the account of other groups. This led to the financial crisis because of the collapse and bankruptcy of a group of the greatest global companies. This study is also important in general by addressing governance from a different perspective than pre vious scientific studies. The study will deal with governance from a different perspective, linking innovative accounting practices to governance mechanisms and principles. fifth: Previous studies: a-Study (Al-Mousawi and Al-Zarir,2016) entitled: "The extent to which the expertise of certified accountancy experts in Lebanon is sufficient to detect creative accounting practices from the point of view of the experts themselves". This study was published in the Journal of Al-Baath University in chickpeas. This study aimed to know the opinion of certified accounting experts in Lebanon about the adequacy of their practical experience to reveal the creative accounting practices practiced by companies in Lebanon. The research concluded that the certified accountancy experts in Lebanon believe that their experiences are sufficient to discover creative accounting practices, and that their discovery capacity increases by Increasing years of experience and professional certifications they have obtained. While the researchers' opinion was that professional certificates are necessary to adequately familiarize American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 166 www.americanjournal.org accounting experts with international accounting standards, professional experience enables them to discover cases of manipulation of financial statements that take place through creative accounting practices and methods. B-A study (Gereh et al.,2015) entitled: The effect of accounting mechanisms for governance in limiting creative accounting practices, From the perspectives of public shareholding industrial companies in Jordan and external auditors.” This study was published in the Jordanian Journal of Business Administration in Jordan. This study aimed to demonstrate the impact of accounting mechanisms for governance to reduce the negative effects of creative accounting practices in industrial joint stock companies in Jordan. has recommendedThe study concluded that the companies’ adoption of accounting mechanisms for governance will contribute significantly to revealing creative accounting practices, which will positively affect the quality of financial reports and the effectiveness of the control process, and this is achieved provided that some of the shortcomings that the study showed for some of these mechanisms, and one of the most important recommendations of the study is the necessity of Strengthening accounting mechanisms for governance and urging companies to apply them, because of this proposal’s role in increasing transparency and disclosure, which helps reduce creative accounting practices, in addition to the importance of coordination between internal audit, the board of directors and external audit in order to manage risks and control them. c-A study (Odia & Ogiedu, 2013) entitled: Corporate Governance, Regulatory Agency and Creative Accounting Practices in Nigeria. This study was conducted. And published in Nigeria. The study aimed to show the effect Governance companies The regulatory activities of accounting standards over creative or creative accounting practices in Nigeria, and may This study was intended to Demonstrate aspects of creative accounting that help pave the way for measuring and determining income, yet it has been oil to a On the statement of its negative aspects, especially When the objective of its practice becomes to deceive or convey false information to users of corporate reports and to demonstrate the profitability of companies and a deceptive and untrue financial position. has recommendedI have not studied untile from Disadvantages of regulatory activities of accounting standardsanIt allows for alternative accounting and creativity, and this gives an advantageunlessTo be manipulated by the contributors offinancial dataNot for the benefit of users of accounting information, especially when there is a weak and inadequate regulatory mechanism to verify these violations. Therefore, standards and regulatory controls for corporate governance should be strengthened and established to reduceCreative Accounting PracticesAmong its effects on the management and accounting of companies, means must be devised and clarification of the organizational activities of accounting standardsin order toFit to work in Nigeria, in addition to penalties and fines, to crack down on creative accounting practices in Nigeria. Dr-study (Hwang, 2010 Lin &) with the title: Audit quality, Corporate "governance, and Earnings management This study was conducted and published in the United States. This study stemmed from the results of previous accounting studies that dealt with the impact of audit quality and corporate governance variables on earnings management practices, by studying the relationship between these variables. Andmay be recommendThe study escaped from its analysis of previous research data thatThe variables related to corporate governance represented by the independence of the board of directors and its experience have an inverse relationship with earnings management, and alsoThere is an American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 167 www.americanjournal.org inverse relationship between the independence of the audit committee, the size of the committee, the number of committee meetings and its experience, and the behavior of earnings management, as andrecommendI have not studied untilThe audit quality variables represented in the extent of the client’s relationship with the auditor, the size of the audit office, the independence of the auditor, are all factors that limit the behavior of the earnings management within the company. The second topic: the general framework of the concept of corporate governance The first axis: The origin and concept of governance. Or not: Origin and development of governance: Despite the modern use of this term, its appearance dates back to the beginning of the nineties of the twentieth century, when the use of this term increased widely in the last years of it, and it became popular in use by rather, experts, especially those working in international, regional and local organizations, for the theoretical and historical basis of corporate governance is due to the agency theory.(Agency Theory), which dates back to the American Berle and Means in 1932,whereNote that there is a separation between the ownership of the company's capital and the process of control and supervision within the corrupt companiesThis chapter has implications for the company's performance(Abdel-Aal,Hammad, Tariq, 2008p. 55). Then came the turn of the Americans who won the Nobel Prize in Economics Jensen and Mackling Delicious We were interested in the concept of corporate governance and highlighting its importance in limiting or minimizing the problems that may arise from the separation between ownership and management, which was represented by the agency theory.What is the definition of this theory in 1976?H:"we are NIHe defined agency theory as a relationship in which the main person, who is the owner of the capital, resorts to the services of another person, the worker, in order to perform some tasks in his stead"(Al-Khashawi, Ali and others.2008, p. 19). Secondly: Governance Concept: that Governance term companies are the abbreviated translation of the term Corporate Governance, motherThe scientific translation of this term, which came accept it, she is “The method of exercising the powers of good management,” and the definitions provided for this term have varied in many waysThey differ in their views, as well as the overlap of this concept in many organizational, economic, financial and social dimensions of companies. reorganization for Economic Cooperation and Development (OECD) Governance that “A set of relations between those in charge of the company’s management, the board of directors, shareholders and other shareholders’". as such International Finance Corporation (IFC) thatHa: "The system through which companies are managed and their business controlled. Corporate governance is the art of managing a network of relationships between various parties and stakeholders, Through corporate strategies and performance, Which from During the division of powers and responsibilities between the parties. (Suleiman, Muhammad Mustafa, 2008,p. 5. And there are those who know: “An integrated system of financial and non-financial control through which the company is managed and monitored in order to achieve its objectives and adhere to standards of integrity and transparency. From the previous definitions, it can be said: the Corporate governance is that system that was concerned with developing the applications and sound practices for those in charge of managing and organizing the company, in a manner that preserves the rights of shareholders, bond holders, company employees, stakeholders and others, through the implementation of formulas for the relations that link them using sound financial and accounting tools in accordance with disclosure and transparency American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 168 www.americanjournal.org standards. Therefore, every company should aim to achieve growth and continuity and ensure a continuous process of creating appropriate values for the sum of its internal units and external It has, in addition to ensuring respect for the legislative rules and work ethics within them, to adhere to the application of the concept of governance, which means a set of internal systems, policies and laws that aim to achieve its strategic objectives.(Suleiman, Muhammad Mustafa, 2009,p. 13). Third Governance characteristics and pillars (Victory,Ali, Abdul Wahaband others, 2007,p. 11- 12). 1-Governance Features: They are the features that must be available in corporate governance and help to integrate their intellectual aspects. The term governance includes the following characteristics: Independence: is the characteristic that reduce or Eliminate conflicts of interest such as the dominance of a chief influence on the company or a large shareholder on the board of directors, and this mechanism starts from how to form boards and appoint committees to appointing an auditor, so that it does not allow any influence on the decisions of the Board of Directors and the company's business. B- Justice and fairness: It is the respect and recognition of the rights of all parties with interests in a manner that ensures equality between them, and among these parties are the interests of the minority shareholders. accountability: The corporate governance system allows the board of directors to be held accountable to shareholders Monitor management and provide advice and guidance to the Board of Directors on how to set strategies and objectives. To achieve this, effective mechanisms must be in place that allow employees to be held accountable and to punish executive members and members of the publican Board of Directors, and to achieve transparency and fair dealing in shares by members of the Board of Directors. 2-Governance pillars: Corporate governance rests on three main pillars, which are: for the following: Ethical behavior: which ensuring behavioral commitment by adhering to the ethics and rules of rational professional conduct, balance in achieving the interests of all parties associated with the company, and transparency when presenting financial information. B- Control and accountability: It is related to activating the role of shareholders and stakeholders in corporate governance, through their oversight and accountability. whereas Parties subject to accounting accountability to shareholders and the stakeholders are mainly represented in the board of directors, Subsidiary committees such as the audit committee, senior management, internal audit and external audit. c- Risk management: It is related to risk management to protect its various stakeholders and raise its financial performance. Fourth: The importance of governance: 1The importance of governance stem from bringing a range of benefits for the company and investor, the state, and the economy in general, where corruption and mismanagement are fought, which leads to the reform of the economy comp, reduce the cost of the capital, attracting foreign and local investments, limiting capital flight abroad, and ensuring a return for investors American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 169 www.americanjournal.org The proper application of the principles of corporate governance also helps to achieve a rate high and sustainable growth that is equitable because it leads to:(AbuSelim, Khalil,2014, p. 48). a-Activating the money market, mobilizing savings, and raising investment rates. B-Increasing the ability of companies to obtain financing, and thus the possibility of increasing employment and employment opportunities within the community. c-Encouraging the growth of the private sector and supporting its competitiveness. D-Protection of minority rights. H-Increase confidence in the national economy. Fifth: The importance of governance: Many studies address the objectives of corporate governance, and it has been shown that It aims to achieve the following:(Ismail, Mujbil, 2014, p. 50) a- To separate between ownership and management and control over it and its performance. B-Improving the economic efficiency of companies. c-Find the structure that identify through which the objectives of the company and the methods to achieve those objectives and follow-up. D-avoid mixing the duties and responsibilities of the executive directors, the tasks of the Board of Directors and the responsibilities of its members. H-Evaluate the performance of senior management, enhance accountability, and raise the degree of confidence. And protecting the rights of shareholders in general, whether a minority or a majority, and maximizing their returns. G-Preventing the exploitation of the available powers from the investigation I-legal gains and trading in the interests of the company and shareholders and stakeholders. The second axis: the general framework of the concept of creative accounting: Or not: The emergence and development of creative accounting: Creative accounting, or fraudulent accounting, as some call it, is an event born in the eighties of the last century, and it may have started when companies faced difficulties in the recession that prevailed in the era of the Industrial Revolution, where there was pressure to achieve better profits at a time when it was difficult to make profits, and when companies discovered thatLaws only tell you what you cannot do, not what you can doBehold, if she cannot earn profits, she can at least invent them(Blah, Syed Abdul Rahman, 2012,p. 31). Accounting has a behavioral and ethical aspect based on not giving priority to certain interests of business owners over the interests of other categories of what is known as the impartiality of the accounting policy, but the presence of unethical creativity that aims to mislead certain goals and show an unrealistic picture of the financial position in order to achieve specific goals, whether for members of the Board of Directors or Owners or stakeholders, By inventing ways Accurate accounting methods, taking advantage of some accounting policies or loopholes, are called methods and creative accounting practices(Tijani, with elegance, 2012, p. 44). Secondly: Creative Accounting Concept: Many definitions of creative accounting appeared in the various accounting literature, despite their differences in expressionaI agreed on the content, except in a few cases where some books are rejectedAB academics introduce manipulation within the definition of creative accounting. The following is a set of definitions, each based on the point of view of its presenter:(Helles, Salem Abdullah, 2002, p. 19) American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 170 www.americanjournal.org Considered Griffiths Creative accounting is synonymous with fraudulent accounting as it involves accounting techniques that allow companies to incorrectly report their financial results. the reality of its commercial activities. And. NakedI saw thatThis is the process of manipulating accounting numbers by adopting the advantages of ambiguity in the rules and choosing disclosure and measurement practices among these rules to change the financial statements from what they are to become in the way he desires, prepared this data (Cohen, Jeffrey et al, 2004, p35). Third; The factors that helped the emergence of creative accounting. A group of factors that contributed to the emergence of creative accounting gathered in the financial statements of business establishments, the most important of which are: 1-Freedom of Choice for Accounting Principles: Company accounting rules and policies sometimes allow to choose among the various accounting methods that you use in preparing its data Financial, where many accounting standards allow to choose among the various accounting alternatives, and this results in the company choosing the accounting methods that fit with its goals and desires and that achieve the best picture of the company’s performance(Hamada, Rasha, 2010, p. 36). 2-Freedom of Accounting Estimates: Appreciation in the language is the meaning of evaluation radical estimation is the process that includes measurement and judgment, an accounting estimate is when the accountant notes an approximate value of an amount related to a particular item in the absence of an existing accounting measurement. Judgment, as the preparation of some accounting operations includes a high degree of discretion, personal judgment, and judgment, this allows management to manipulate these estimates in order to reach predetermined goals(- Khalil, Muhammad, 2003p. 14). 3The timing of the actual execution of the operations: Controlling the execution timing and occurrence of some real operations can result into achieve the desired impression of accounts and data the company’s finances, if left to the management the freedom to carry out some operations at the time it deems appropriate. The implementation of these operations may be delayed or acceleratedfor its implementation, In order to achieve certain goals and gains (- Darwish, Abdel Nasser, 2003, p. 96). Fourthly; Motivations for using creative accounting methods: There are many factors and motives behind its use a Creative accounting methods and practices, and one of the most important reasons is to show the financial position of the facility better than it is, Than Some managers believe that Investors focus only on short-term financial gains extended, which made them seek to adjust the profits declared by using creative accounting methods and practices(- Rihawi, Maha, 2009p. 54). The conflict of interests between the different parties is a major reason for the emergence of creative accounting, as the interest of managers is based on reducing taxes and increasing the remuneration of managers, while the shareholders have their interest in maximizing the return on investment, and the interest of the employees lies in increasing the administrative compensation, and the official and from outside the business establishment, They want to collect more taxes or they want to collect their money, so the multiplicity of interests and their conflict causes the spread of creative accounting(Al- Moussawi, Hassan and Al-Zarir, Rania, 2016, p. 14). Management's purposes for using creative accounting are limited to move following watts:(Mohamed Hassan, Bushra, 2012pp. 57-58) American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 171 www.americanjournal.org 1- Tax evasion: Tax evasion is one of the main management motives for using creative accounting with the blessing of the main owners and in cooperation with the external auditor. 2-Personal gain: Counting personal gains as one of the most important management motives for using creative accounting in cooperation with the external auditor and at the expense of all categories. 3-Fulfilling the necessary requirements: maintain market share and meet competitive requirements when its operating and investment conditions do not allow this to be achieved. 4-Obtaining or maintaining financing: When businesses suffer from liquidity problems necessary to continue operational and investment operations resort to refinancing through financial institutions by providing financial bank fulfills the financing conditions imposed by financial institutions (Mobaideen, Tarek and Abdel Moneim, 2010, p. 32). And see researcher that Creative accounting is behavior no ethically to follow Serious practices and violations to achieve the goals and objectives of a particular group at the expense of other groups, because several motives, including conflict of interests between different parties and the multiplicity of accounting alternatives in accounting measurement, estimation and disclosure provided by accounting standards (Al-Qutaish, Hassan and Al-Sufi, 2011p. 98). fifth: Creative Accounting Practices and Ethics for the Accounting Profession; Defines professional ethics asThis is the system of ethical principles and rules of practice that have become standardized see for professional behavior, every profession has its own ethics that were formed and gradually developed over time until it was completedIt has been recognized and has become morally and legally approved. Therefore, there was a need to develop regulations for the practice of various professions, especially the practical ones such as accounting, so that these activities include the foundations, duties and rights that must be adhered to when practicing a specific professional work. (Ali, Mustafa Abdul-Hussein andothers2013, p. 65). The basic principles of the International Code of Ethics for Accountants state that hallmark of any profession acceptance of its responsibilities to the public, and with regard to the accounting profession, the public includes all of the customers, donors’ credit, governments, employees, Investors, units Economic, And the financial markets and everyone who depends on the objectivity and integrity of accountants to maintain the continuity of business nature. accreditation imposes on accountants the responsibility to maintain the interest of the public, which is known to be the good situation of individuals and economic units served by the accountant. It is in the interest of accounting to be clear to the beneficiary of its services by implementing the highest levels of performance and in accordance with ethical requirements that seek to ensure this level of performance. (Shariqi, Omar, 2015, p. 32). The third axis: The concept of interim financial reports and the approved entries for their preparation. First: The concept of interim financial reports: Interim financial reports are one of the sources of obtaining appropriate accounting information for making economic decisions from shareholders and other stakeholders in joint stock companies, especially joint stock companies listed in the financial markets. Unlike annual financial reports, these companies issue financial reports covering an interim period during the fiscal year. Usually they are semi-annual or quarterly, and the attention to this type of reports is due to the pressures exerted by shareholders and other economic decision-makers with the aim of identifying the results of the activity and financial position of the investee companies on a American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 172 www.americanjournal.org regular basis instead of waiting until the end of the financial year to obtain the necessary information for those decisions (Abu Hamam, Majed Ismail, 2009, p. 66). Interim financial reports were also defined as “a set of financial statements or reports that are prepared for periods of time less than the financial year, and that period may be three months (quarterly financial reports) or six months (semi-annual financial reports).” There is usually a relative identical in the type and form of annual financial reports and interim financial reports, and the dispute is sometimes determined in the time period covered by each of them and the timing of their issuance, and therefore the interim financial reports as a means of disclosing interim information are prepared in a similar manner to the annual financial reports in accordance with the accounting principles applied when Preparing and publishing those same reports for the purpose of achieving consistency between the interim financial reports From clear, focused and quickly understandable information, the interim financial reports represent:(Agha, Imad, 2011pp. 77-78) Providing appropriate accounting information to rationalize investment and credit decisions taken by current and prospective investors, creditors and creditors in a timely manner and throughout the financial year, on a temporary basis, often quarterly. The accounting information contained in the interim financial reports helps the users of these reports to estimate the size and timing of the expected cash flows and the degree of certainty related to them, as the net cash flows are an indicator of the company’s ability to meet its external obligations such as paying dividends and loan interest, and these flows also reflect the company’s ability to finance its needs operating in a manner that leads to profits and thus the increase in the prices of its shares traded in the stock market. Interim financial reports provide information on evaluating the company's performance and its earning ability during the period for which the interim financial reports are prepared and with the help of investors in estimating the future expectations of the company's performance. Secondly: The importance and objectives of the interim financial reports: that important Interim financial reports stem from the importance of the annual financial statements that affect the qualitative characteristics that must be characterized by accounting information, including what is related to the appropriate timing feature that must be available in the accounting delivery process, as the timing of issuing the interim report affects the decisions of investors and stakeholders with the organization to take Their investment decisions, as if the information is not delivered in time, it will lose its value and become ineffective. For the information to be relevant, it must have the following sub-characteristics:(Brahmin, Sweater, 2014p. 10) timing the appropriate: The information should be available to the decision maker before it loses its value and ability to influence the decision. Ability predictive: The user of accounting information exercises a kind of forecasting when making an investment decision, by making predictions about the results of past, present or future events, or confirming or correcting previous expectations. Thus, accounting information has a high predictive power. the accounting information be free from errors and bias and that it faithfully presents the economic events, and then the user of the accounting information becomes confident and can rely on it. Third: Goals Interim Financial Reports: The goal of interim financial reports is to provide sequential and temporary estimates of the organization’s performance, and because the interim report American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 173 www.americanjournal.org period is a short period, so the effects of errors in estimation and allocation were large, and for the appropriate allocation of annual operating expenses is a matter of great importance, because progressive tax rates are applied to gross annual income, and therefore the tax burden varies greatly, and it is difficult to determine the quarterly income tax burden, in addition, one interim period is often charged with operating expenses while all quarterly periods benefit from those expenses. The impact of seasonal fluctuations and time-to-market conditions determine the reliability, comparability, and predictive power of the interim financial reports. (Beydoun, Alaa and Onesi, Alaa, 2013, p. 101). As for the perspective of the IASB Board, the objective of the interim financial reports is to provide information that is useful in making economic decisions, as is the case in the annual financial information. In addition, the interim financial reports are expected to provide qualitative information about the financial position, performance and change in the financial position of the organization. The objective in general is to embrace presentation or disclosure either by presenting integrated financial statements or summary information. Therefore, the objective of Standard No. (34) for Interim Reporting is to provide an understanding of the ability to make the right decisions at the appropriate time. (Al-Tamimi, Abbas Hamid, 2008, p. 25). Fourthly: The impact of creative accounting on reliability and determinacies: TI CountFinancial data ICs The final product of the accounting system, the accounting information is used in making decisions by its users, and in order to increase degree the dark to transparency in the information contained in the announced financial statements and increasing the confidence of investors and related parties in the company, the principle of disclosure, which requires the publication of financial statements, must be adhered to Ics that have been prepared in a manner thatIn accordance with the accounting principles, with the attachment of a set of reports, notes and clarifications, it deals with clarification or detailing the information on the items contained in the data so that it is not used as a means of fraud or deception.(Gouda, Fikri Abdel Ghani, 2008p. 35). Search Quarter Study population and sample. Seeking The researcher seeks obtaining the data required to perform the statistical analysis, in order to recommendIt leads to results that achieve the objectives sought by the study description for the methodology for members of the study community and for its sample as well as the used study tool, the method of preparing it, how it was built and developed, and the extent of its validity and stability. It also includes a description for actions that follow the designing the study tool to collect data, the chapter ends with the statistical treatments that were used to analyze the data and draw conclusions, under an environment that is open to innovation, in which there is a solid infrastructure capable of supporting the process of communication and interaction, since Establishment of Iraqi companies and still, it faced many problems, especially in the field of finance, due to the adoption of traditional methods in the registration process and its adoption of the traditional accounting system, which required searching for ways and procedures to solve these problems through its competencies. Therefore, e-governance was found to be one of the most successful methods. With the requirements of the age of technology and with regard to our current research focusing on part of this development that you have introduced companies represented the role of corporate governance in reducing the negative impact of creative accounting inreliability of interim financial informationAnd the associated problems and advantages, as will be explained in the applied side of the research. Or not: The characteristics of the study sample: American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 174 www.americanjournal.org In its first section, the questionnaire contained a set of general questions related to the personal data of the study sample members, which were categorized into four variables: educational qualification, scientific specialization, work experience, and age group. Qualification:ChooseTresearcherHShow the academic qualification according to Table No. (2) below: table number2Distribution of the sample members according to the educational qualification variable. Frequency Percent Valid Percent Cumulative Percent Valid Bachel or of 41 31.8 31.8 31.8 Master' s 73 56.6 56.6 88.4 PhD 15th 11.6 11.6 100.0 Total 129 100.0 100.0 Source: Prepared by the researcher Housing the statistical program SPSS. Table No. (2) Above is the distribution in percentages of the scientific qualification of the participant in answering the questions of the questionnaire. That Who holds a certificate? "PhD" from the participants; where the ratio%31.78of the participants carrying certificate "Bachelor of', the ratio% 56.59of them carry certificate "Master", while the ratio%11.63of the participants carrying certificate "PhD"; Thus, the participants will be holders of the "Magnificence". They have the most share in this study, and this gives a greater ability for the sample members to answer the questionnaire questions. Jurisdiction:Diversity of specializations involved inThis is amazingthe study,qIt appeared according to Table No.3) below: table number3Distribution of the sample members according to the variable of scientific specialization. Frequency Percent Valid Percent Cumulative Percent Valid Accounting 79 61.2 61.2 61.2 Economics 8 6.2 6.2 67.4 Business Administration 30 23.3 23.3 90.7 Financial sciences and banking 12 9.3 9.3 100.0 Total 129 100.0 100.0 Table No. (3)Above is the competence of each of the participants in the questionnaire, where the first line of the table appear and Specialists in the field of "Accounting"79Shared by%61.24, while the second line shows specialists in the field of "economics" and they are8participants by%6.20Only, the third line of the table appears that Professionals in the field of "Business Administration" who American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 175 www.americanjournal.org represent30Shared by% 23.26,While the fourth line presented Table of participants specialized in the field of "Financial Sciences “and banking “They were12Shared by%9.30; Hence, it can be said that specialists in the field of "economics" obtained the lowest position, while specialists ranked and in the field of "Accounting" the highest place in this study; This thus enhances the answers to the questions directed to them in a manner that serves the interest of the research Decentered around Accounting creative. Practical experience:The number of years of experience differed for the participantsIn this study,This was shown in Table No. (4) below: Table No. 4: Distribution of the sample members according to the variable of work experience. Frequency Percent Valid Percent Cumulative Percent Valid less than 5 years 58 45.0 45.0 45.0 From 5 to 10 years 42 32.6 32.6 77.5 11-15 years old 17 13.2 13.2 90.7 More than 15 years 12 9.3 9.3 100.0 Total 129 100.0 100.0 Table No. (4) number of years The expertise have Participants, as the first line of the table shows participants with less than 5 years of experience and who have reached58Shared by% 44.96, the second line of the table appears that Participants who range news accounts between 5and10 years they were42participantain the rate of%32.56As for the third line of the table, it refers to the participants who have experience ranging from11 and15 years and who registered17participant.ratio investigators% 13.18, and finally last line of the table the sign for someone who has experience Excellence The 15thageHthey were12 average participant %9.30; building. on the above see researcher thatThe lowest rank of participants was who They have more than 15 years of experience and the highest rank was for whom less year’s news They have about the 5YearsThis is normal because the study sample includes a group of university students. Age group:ChooseTresearcherHshowthe ageAccording to Table No.5) below: Table No.5Distribution of the sample members according to the age group variable. Frequency Percent Valid Percent Cumulative Percent Valid Less than 25 years old 31 24.0 24.0 24.0 From 25 to less than 35year 67 51.9 51.9 76.0 American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 176 www.americanjournal.org From 35 to less than 45year 23 17.8 17.8 93.8 45 years and over 8 6.2 6.2 100.0 Total 129 100.0 100.0 Table No. (5)Age group for participants in Questionnaire form, the first line appearsl of the table participants who under the age of 25 years, where reached 31 participant in the rate of% 24.03, and the second line of the table Participants who range their age between the 25 to less than 35 age they were 67 Participated by% 51.94 As for the third line of the table, it refers to the participants of the range their age between the35 to less than 45 age and who 23 participant. Ratio investigators % 17.83, and finally comes of the table over the age of 45age of the participants were 8 participant rate% 6.202; the above you see research that lowest rank of participants was who Over the age of 45 age and the highest rank was for whom their ages ranged from 25 to less than 35 years, which is an acceptable age for the formation of expertise in this field this ensures a logical answer to the questionnaire questions. Secondly: Statistical method and tools used in data analysis: To achieve the objectives of this study and test its hypotheses, use researcher Statistical Package for the Social Sciences Programs PSS 19-Statistical Package for the Social Sciences) in analyzing the data obtained through the field study of the researched sample, another set of statistical tools, including: a-Arithmetic mean (Mean):It is a value around which values are gathered Thea group, through which the rest of the group values can be judged, so this value is the arithmetic mean. B- standard deviation (Standard deviation): It is used to measure the extent of statistical scattering, that is, it indicates the extent of extension of value domains within the statistical data set. c- a test-test (One sample t-test): This test is used to test a hypothesis related to the arithmetic mean. The researcher used this test to test the hypotheses to test of validity and reliability of the questionnaire. 1- trustworthiness of questionnaire test: Prepare morality basic requirements in the questionnaire. It means the suitability and appropriateness of the questionnaire for the assignments established for the study and its objectives, in order to ensure that questionnaire was presented to a group of experts and test who is specialized in the fields of scientific research, accounting, and the Arabic language?5) arbitrators, to check the suitability of the design of the Form and content with the hypotheses of the study, as well as the extent of the ability to measure the variables and their relationships with each other valuable notesThe statement made by legislation Committee that was vision the formed form in its initial, to display in its final form, to be use it in the distribution process on the study sample. 2- Questionnaire stability: that constancy means a scale stability and inconsistency, which scale gives the same results and probability equal to the value of the coefficient if it is repeated over the same population, for the purpose of checkingd of the stability of the scale was used equation Alpha Cronbach's Alpha)), to determine the accuracy of the answers of the study sample, Cronbach's alpha coefficient values are statistically acceptable. When these values are equal to or greater than (0.6), specifically in administrative and accounting research, as follows: table number 6: Cronbach's alpha coefficient at the level for the variables. American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 177 www.americanjournal.org number of items Cronbach's alpha coefficient 50 0.875 Table shows above the value of Cronbach's alpha coefficient is (0.875) on the total of the variables, this means that the coefficient is statistically acceptable because it greater than (0.6). table number 7: Cronbach's alpha coefficient at the level variables the first axis. number of items Cronbach's alpha coefficient 25 0.845 Table shows above the value of Cronbach's alpha coefficient on the level of the variables of the first axis, to measure the impact of the application of corporate governance principles in reducing the negative impact of creative accounting Equal (0.845), and this is meaning that coefficient is statistically acceptable because greater than (0.6). table number 8: Cronbach's alpha coefficient at the level variables the second axis. number of items Cronbach's alpha coefficient 25 0.736 Table shows above the value of Cronbach's alpha coefficient on the level of the second axis variables, to measure the impact of applying corporate governance mechanisms in reducing the negative impact of creative accounting equal (0.736), and this is meaning that coefficient is statistically acceptable because greater than (0.6). Fourth: Data analysis and hypothesis testing. 1- Repetitions and analysis of the answers of the study sample members: Under the treatment of a questionnaire has been designed to answer the researcher used point Likert Standard (Likert) in measuring answers of questionnaire, and check the answers used are as follows: (5) means strongly disagree, (4) means disagree, (3) means neutral, (2) means OK, (1)Means Strongly agree, the more the arithmetic mean is greater or equal to the hypothetical mean of (3), that is evidence towards the answers of the research sample is not compatible with the movement of the scale, and whenever it is less than (3) that answers correspond to the movement of the scale. The following table indicates on the meadow averages show the type of each answer in five-point Likert scale. Table 9: Weighted average. weighted average the level Mn1 to me1.79 Strongly Agree from1.80 to 2.59 OK from2.60 to me3.39 neutral from 3.40to 4.19 not agree from4.20 to 5 Strongly Disagree American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 178 www.americanjournal.org Source: prepared by the researcher. In order to find out the answers to the sample trends for each paragraph and for each of the axes of the study, ratios and repetition were used the arithmetic means, standard deviations, and the results were as follows: The first axis: The impact of applying corporate governance principles in reducing the negative impact of creative accounting on the reliability of financial statements. The following table shows the results of the questions1-2-3-4-5From the first axis Regarding the principle of shareholder rights: table number10: Results of questions 1-2-3-4-5 from the first axis. The right of shareholders to be accountable and oversight over the company's business reduces potential unethical practices. The right of shareholders to participate in decisions to sell or modify the company's assets would limit creative accounting practices. Shareholders' follow-up to the financial disclosure procedures followed within the company limits the use of creative accounting methods. The right of shareholders to obtain information about the fundamental changes in the company prevents their rights from being overstepped or tampered with. Informing shareholders of any unusual operations that may affect the company in the future will control the behavior of the executive management and the board of directors. N Valid 129 129 129 129 129 Missin g 0 0 0 0 0 Meaning 1.91 2.24 2.16 2.04 2.00 std. Deviation .354 .705 .605 .474 .468 The above table shows that the trends of the first five questions are towards agreement, and this was confirmed by the arithmetic mean which was worth1.91fo the first query, 242 for the second query,162. for the third, 2.04 for the fourth question and 2.00 for the fifth question, all of which are lower than the default mean. The following five tables show the detailed results for each question: Table No. 11: Detailing the results of the first question from the first axis. The right of shareholders to be accountable and oversight over the company's business reduces potential unethical practices. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Agree 14 10.9 10.9 10.9 OK 112 86.8 86.8 97.7 neutral 3 2.3 2.3 100.0 Total 129 100.0 100.0 American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 179 www.americanjournal.org Table No. 12: Detailing the results of the second question from the first axis. The right of shareholders to participate in decisions to sell or modify the company's assets would limit creative accounting practices. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Agree 10 7.8 7.8 7.8 OK 88 68.2 68.2 76.0 neutral 21 16.3 16.3 92.2 not agree 10 7.8 7.8 100.0 Total 129 100.0 100.0 table number13Detailing the results of the third question from the first axis. Shareholders' follow-up to the financial disclosure procedures followed within the company limits the use of creative accounting methods. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Agree 8 6.2 6.2 6.2 OK 98 76.0 76.0 82.2 neutral 20 15.5 15.5 97.7 not agree 1 .8 .8 98.4 Strongly Disagree 2 1.6 1.6 100.0 Total 129 100.0 100.0 Table No. 14: Detailing the results of the fourth question from the first axis. The right of shareholders to obtain information about the fundamental changes in the company prevents their rights from being overstepped or tampered with. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Agree 10 7.8 7.8 7.8 OK 106 82.2 82.2 89.9 neutral 11 8.5 8.5 98.4 not agree 2 1.6 1.6 100.0 Total 129 100.0 100.0 American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 180 www.americanjournal.org Table No. 15: Detailing the results of the fifth question from the first axis. Informing shareholders of any unusual operations that may affect the company in the future will control the behavior of the executive management and the board of directors. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Agree 14 10.9 10.9 10.9 OK 101 78.3 78.3 89.1 neutral 14 10.9 10.9 100.0 Total 129 100.0 100.0 The following table shows the results of the questions6-7-8-9-10From the first axis regarding the principle of equal treatment of shareholders: table number16: Results of questions 6-7-8-9-10 from the first axis. The fair treatment of all shareholders achieves protection for all of them from exploitative practices from any party, while providing them with effective means of compensation. The obligation of the members of the Board of Directors and the Executive Management to disclose any material interests related to all shareholders or any matters that would affect theThe status of the company would limit the tampering of their rights. The right of all shareholders to obtain information about their voting rights before purchasing shares protects them from any manipulation of their rights in the future. The ability of all shareholders to bring legal and administrative cases against directors and directors would limit unethical practices. The right of the small shareholders to see all the transactions with the members of the board of directors would preserve their rights from any manipulation by the major shareholders. N Valid 129 129 129 129 129 Missing 0 0 0 0 0 Meaning 2.15 1.77 2.10 1.91 2.51 std. Deviation .517 .459 .513 .545 .876 The above table shows that the trends of the five questions toward the agreement, and this was confirmed by the arithmetic mean, which reached its value 2.15f or the question sixth, 1.77 for the question seventh,102 for the eighth, 1.91 for the ninth question and 2.51 for the tenth question, all below the default mean. The following five tables show the detailed results for each question: Table No. 17: Detailing the results of the sixth question from the first axis. The fair treatment of all shareholders achieves protection for all of them from exploitative practices from any party, while providing them with effective means of compensation. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Agree 5 3.9 3.9 3.9 OK 103 79.8 79.8 83.7 neutral 19 14.7 14.7 98.4 not agree 1 .8 .8 99.2 Strongly Disagree 1 .8 .8 100.0 Total 129 100.0 100.0 American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 181 www.americanjournal.org Table No. 18: Detailing the results of the seventh question from the first axis. The obligation of the members of the Board of Directors and the Executive Management to disclose any material interests related to all shareholders or any matters that would affect theThe status of the company would limit the tampering of their rights. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Agree 32 24.8 24.8 24.8 OK 95 73.6 73.6 98.4 Neutral 2 1.6 1.6 100.0 Total 129 100.0 100.0 Table No. 19: Detailing the results of the eighth question from the first axis. The right of all shareholders to obtain information about their voting rights before purchasing shares protects them from any manipulation of their rights in the future. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Agree 9 7.0 7.0 7.0 OK 100 77.5 77.5 84.5 neutral 18 14.0 14.0 98.4 not agree 2 1.6 1.6 100.0 Total 129 100.0 100.0 Table No. 20: Detailing the results of the ninth question from the first axis. The ability of all shareholders to bring legal and administrative cases against directors and directors would limit unethical practices. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Agree 22 17.1 17.1 17.1 OK 98 76.0 76.0 93.0 neutral 8 6.2 6.2 99.2 Strongly Disagree 1 .8 .8 100.0 Total 129 100.0 100.0 Table No. 21: Detailing the results of the tenth question from the first axis. The right of the small shareholders to see all the transactions with the members of the board of directors would preserve their rights from any manipulation by the major shareholders. Frequency Percent Valid Percent Cumulative Percent Valid Strongly Agree 8 6.2 6.2 6.2 OK 67 51.9 51.9 58.1 neutral 39 30.2 30.2 88.4 not agree 10 7.8 7.8 96.1 Strongly Disagree 5 3.9 3.9 100.0 Total 129 100.0 100.0 American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 182 www.americanjournal.org 2- Hypothesis testing: The researcher tested the hypotheses of the study after analyzing its results, as follows: First Hypothesis: H0: it has not found a significant relationship between the application of corporate governance principles and reducing the negative impact of creative accounting on the reliability of financial statements. H1:it has found a significant relationship between the application of corporate governance principles and reducing the negative impact of creative accounting on the reliability of financial statements. The following test that the researcher will present will prove one of the two hypotheses: table number70: Testing the first hypothesis. One-Sample Test Test Value = 3 T Df Sig. (2-tailed) Mean Difference 95% Confidence Interval of the difference Lower Upper Hypothesis 1 -978,847 128 .000 -2.84093 -2.8467 -2.8352 It appears in this table that .000 = sig, which is therefore less than 0.05, and this negates H0 in this hypothesis and proves H1, since(H0)Express what is greater or equal to 3, and the researcher means by this equation the three options the last one on the questionnaire is (neutral, disagree and strongly disagree), while the(H1) It expresses what is less than 3, which means in this equation the first two options in the questionnaire form are (agree and strongly agree). Based on the foregoing, the researcher rejects the null hypothesis, and accepts the alternative hypothesis which states: “There is a significant relationship between the application of corporate governance principles and the reduction of the negative impact of creative accounting on the reliability of financial statements.” Conclusion Conclusions and Recommendations First: Conclusions. The most important conclusions reached can be summarized as follows: 1. The elements of the financial statements represent the main axes that the executive management resort to to practice creative accounting methods and policies in order to present a ambiguous impression about the financial information contained data in order to serve various purposes and objectives has to be achieved. 2. The spread and diversity of creative accounting methods are among the main reasons for the lack of reliability in the financial statements, as these methods differ according to their objective, the circumstances, and the opportunities available to the management of the enterprise to practice them. 3. Through previous studies, it appears that there is a clear and great interest in the countries of the world about the application of corporate governance principles, because of their importance in reducing financial and administrative corruption. 4. Creative accounting is considered unethical behavior, because of the serious violations that accountants pursue in their profession, in order to achieve certain goals and objectives for benefit of particular group on account of the rest of the groups. In other words, it can be said that the ethical American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 183 www.americanjournal.org dimensions of creative accounting contradict the rules and ethics of the accounting profession, which constitutes dangerous to the future of the accounting profession. 5. The process of eliminating creative accounting practices is a difficult and complex job, but it is possible. Therefore, enhancing the role of accounting mechanisms for governance helps greatly in revealing those practices because there is a close link between the accounting mechanisms of governance and the quality of financial reports and the effectiveness of the control process. 6. The audit committee is one of the most important mechanisms for implementing corporate governance because of its effective and coordinated role with the relevant governance parties (the board of directors, the internal auditor, the external auditor, shareholders and other interested parties), but it cannot alone control the performance of the company and activate its role unless there is a conviction from the Board of Directors of its importance, as it represents an essential pillar of the supervision and audit process and does not represent the audit process as a whole. 7. The application of corporate governance principles in Iraqi companies limits the practice of creative accounting methods, by activating the control and accountability processes trained by each of the shareholders and stakeholders in the company, which is positively reflected on the principle of disclosure and transparency, which in turn supports the degree of confidence and credibility in the financial statements. 8. The board of directors plays a main role. Whatever as one of the governance mechanisms, through its involvement, which qualifies them to deal with different aspects of the activity and the ability to follow up and hold the executive management accountable, in addition the Committees created by the Council and that ensures the safe, sound, and efficient conduct of the company's business. 9. Internal audit has a significant impact on limiting creative accounting practices because of its role in developing and improving internal control systems to enhance their resistance to pressures of management interventions in the audit process. 10. The audit committees carrying out their duties related to the supervision and control of financial reports, the examination and evaluation of the internal control system, and the coordination between the internal audit, the board of directors and the external audit, made it one of the most important mechanisms of governance, as it has an active role in managing risks and limiting creative accounting practices. 11.The external audit plays a major role in limiting creative accounting practices, through its follow- up to the company’s board of directors in achieving its objectives, disclosing the material events affecting the financial position and the nature and impact of the risks it faces, and ensuring the quality of internal control performance to increase its effectiveness in risk management and control. To ensure the integrity of the accounting and auditing processes in the company and the truthfulness and fairness of the financial statements. 12.Governance mechanisms play a prominent role in limiting creative accounting practices, except for the legal environment. Iraqi laws have not yet issued a clear guide to governance. Second: Recommendations. In light of the conclusions that have been reached, the researcher makes the following recommendations: 1.Researchers, professionals, and those interested should pay more attention and introduce the importance of the issue of corporate governance and its principles, Objectives and positives at the American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 184 www.americanjournal.org level of companies and at the level of the country, with an emphasis on the need to take their suggestions into consideration to help implement good and rational governance. 2.Subjecting the external auditors and their working methods to a continuous evaluation process to identify the strengths and weaknesses in their work and working to develop their expertise and skills in accessing modern auditing methods. 3.It is necessary for the external auditors, when carrying out the audit process, to give the sufficient attention to all the elements and components of the audit process and finance data, to get acquainted with all the practices and methods of creative accounting that may be applied. 4.prepare the conferences and seminars specialized in Accounting, Financial and legally to preparing explanatory brochures to show the risks of using creative accounting and the negativity effects on the future of companies, economy, and regional and international reputation. 5.The need for company departments to cooperate fully and transparently with the external auditor while doing his work, because of it is importance that contributes to increasing the confidence and credibility of the financial statements issued by the company. 6.Preparing courses for auditors so that each auditor shares his or her own experiences and the misleading operations he went through in the financial statements with the rest of the auditors, especially if the auditor is new to the profession. 7.Paying attention to the adequate and good preparation of internal auditors because of its significant role in influencing their professional competence, and thus reducing the risks that the interim financial reports may be exposed to. 8. The need to strengthen the application of corporate governance in Iraq and to update and develop regulations and laws to keep pace with their requirements, so that a guide is developed to be included the most important principles that must be adhered to, and that laws stipulate penalties in case of violation. 9. The necessity of establishing a legal framework for the accounting profession to take care the interests of interests of practitioners and helps in educating the accountants on the most important rules during the process of preparing the financial statements, a framework protects the preparers from any pressures they may be exposed to from management. 10. The necessity of developing legislation and regulations that regulate the work of external auditors, so that they can carry out the audit process with independence and high professionalism away from the influences and pressures of the company's management. 11. Issuing legislation that includes deterrent penalties for cases of manipulation and fraud that may occur in the financial statements of companies, in order to limit the use of illegal means when preparing these statements. 12.Tightening of supervision by the various supervisory authorities in the country, companies that are involved in carrying out some creative accounting practices must tamper or distort their data and information. 13. Seeking to find a relationship between audit companies at the local level and major companies at the global level, in order to benefit from the expertise of these companies and the huge capabilities available to them. 14. Legalization of management's ability to manipulate the finance data by setting sufficient limits for the use of accounting alternatives in the field of measurement and disclosure. American Journal of Business Management, Economics and Banking Volume 12 May, 2023 P a g e | 185 www.americanjournal.org 15. Recommending studies related to enhancing the ethical aspects of accountants and auditors to reduce the chance to manipulate by creative accounting methods and practices, in addition to holding seminars for users of financial reports explaining the creative accounting practices that practiced by some companies and the most important developments in the field of auditing and accounting in order to spread awareness among them. 16. Accelerate the review and development of laws and regulations (especially those related to the organization of companies) in line with the requirements of the current and future period and in a manner that enhances disclosure and transparency in financial statements and ensures the protection of the rights of small shareholders. 17. Finding a reference for accountants with independence to protect them from management interventions that may force them to exceed legal and accounting requirements, as well as to secure their relative independence in a manner that achieves effective and efficient performance in accordance with generally accepted accounting principles and protects them from legal accountability. 18. Emphasizing the need to include the concept of corporate governance in the curriculum plans of the accounting departments in Iraqi universities, with a focus on holding workshops, seminars, and practical cases to explain the applied aspects of this concept in the Iraqi environment. List of sources and references Hammad, Tarek Abdel Aal, 2008, Corporate Governance: Public and Private Sector Companies and Banks, University House, Alexandria, Egypt. Al-Khashawi, Ali et al..., 2008, Creative Accounting and the Role of the Auditor in Verifying its Practice and Results, Audit Bureau, Amman, Jordan. 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