The Role of Internal Auditing in Achieving Quality in Banking Accounting Information: An Analytical Study of the Opinions of a Sample of Administrative Leaders in Private Banks in Najaf Governorate

najat jaber twair ¹

University of Kufa, Faculty of Management and Economics,Najaf, Iraq

njabr2163@gmail.com

jasim Mohammed Yaseen ²

Al-Turath University,Baghdad, Iraq

Jasim.mohammed@uoturath.edu.iq

ABDULLAH AHMED JASIM ³

University of Kufa, Faculty of Veterinary Medicine, Najaf, Iraq

zaidmais47@gmail.com

Abstract

This study seeks to identify the impact of internal auditing on the quality of banking accounting information in a sample of private banks. In Najaf governorate. The research is based on two variables: internal auditing, with its dimensions (internal audit process efficiency, internal audit communication, and reliance on internal audit output), and banking accounting information quality, with its dimensions (desirable characteristics of information quality and characteristics that contribute to the quality of information). Research problem: Perhaps the most significant research problem proposed in this study is to assess the true role of internal auditing in evaluating the quality and reliability of accounting information, and to measure the extent and degree of the gap between its theoretical or literature-based role and its practical application in practice. The sample consisted of administrative leaders in five established commercial banks, including the National Bank of Iraq, Arab Gulf Bank, International Islamic Bank, Arab Mashreq Islamic Bank, and South Bank. The study population consists of administrative leaders in these banks, who hold positions such as managers, department heads, division heads, and unit heads. A total of 73 questionnaires were received, and after discarding two invalid ones and one outlier value, the final usable sample size was 70. The hypotheses were tested using SPSS statistical software and structural equation modelling through AMOS software. The main conclusion indicated that there is a strong, positive, and statistically significant relationship between internal auditing and the quality of accounting information, with reliance on the outputs of audit work being the most important dimension. In light of this, the study suggests that communication channels and strategic cooperation between the internal audit unit and senior management be reinforced to enable the effective use of audit outputs in strategic decision-making.

Keywords: Internal auditing, quality of banking accounting information, private banks in Najaf Governorate.

Introduction

Over the course of the present age of finance, the intricacy of banking for the purpose of transactions, and the requirement for trustworthy and top-notch accounting data for businesses, in terms of capacity to inform decisions, has consistently increased. Accordingly, the internal audit function has evolved from a mechanical device and a controlling discipline of accounting into an independent, informative, and dispassionate process that seeks to add value and improve the effectiveness of risk management by all available means. It now encompasses all types of administrative and accounting controls, utilizing it as a safeguard to verify the authenticity of recorded data, protect the bank's assets, and assess the effectiveness of internal control systems. Since accounting information plays a crucial role in financial planning and monitoring, as well as in the disclosure requirements of banking organisations, its quality assessment has become a strategic objective that cannot be achieved without efficient internal audit processes and qualified auditors. The importance of this research lies in the need for effective reliance on internal audit as a constructive and effective tool in ensuring the quality of banking accounting information. Thus, this research aims to identify and analyse the relationship and impact the internal audit has on the quality of banking accounting information by demonstrating the importance of the dimensions of audit and their role in improving the basic and enhancing characteristics of this information, to gain some practical perception for the administrative leadership in private banks in Najaf Governorate. Integral in the structure of research, which included four main axes, the first of which was methodological, the second included a review of the literature on the main research variables and subsidiary dimensions, the third devoted to the results of the analysis, and the research ended with the fourth axis to review the conclusions and recommendations made based on the statistical analysis process and created by the researcher.

1. First: Research Methodology

1. Research Problem:

The research problem lies in determining the actual function of internal auditing in private banks, specifically to evaluate the quality and credibility of accounting information in Najaf Governorate. While the internal audit function is the third line of defence , which handles fraud, social and other related issues in the banking sector, there might be an inherent lack of comprehension in the desired or required auditing mechanisms that qualitatively sound accounting information should achieve the fundamental and enhanced qualitative characteristics of accounting information, especially the communication usefulness and strategic usage of its outputs. This study aims to identify the gap between the theoretical role of internal auditing and the practical role of internal audit in influencing administrative decisions based on such information. Accordingly, the primary question in the research can be crystallised in the following relationship: How do internal auditing and banking accounting information quality, through the impact of the quality of banking accounting information, relate to and enable private banks in Najaf Governorate? For better clarity of the problem, we would like to ask some questions:

1. What is the level of understanding and perception of the research sample regarding the concepts of internal auditing and the quality of banking accounting information?
2. What is the overall impact of the dimensions of internal auditing on the quality of banking accounting information in private banks in Najaf Governorate?
3. What is the partial impact of each dimension of internal auditing on the quality of banking accounting information?

1. Research Objectives

The objectives are as follows:

1. To provide an applied framework that clarifies the nature of the relationship and impact between internal auditing and the quality of banking accounting information in the Iraqi banking sector.
2. To identify the level of understanding and responsiveness of the research sample (administrative leaders in the studied banks) to the concepts and dimensions of both internal auditing and the quality of banking accounting information, and to evaluate the extent of their actual application.
3. To identify and measure the impact of each dimension of internal auditing (efficiency of internal audit processes and communication, and reliance on internal audit outputs) individually on the quality of banking accounting information.
   • Importance of the Research
   • The hypothetical model:
   • Research Hypotheses:

This research is important due to the essential role of internal auditing in overseeing and consulting on the necessary measures to maintain the appropriateness of financial and accounting processes in the critical area of banking. This research is one of the studies that fills the knowledge gap by analysing the effect of internal audit dimensions on the quality of banking accounting information in private banks within the city of Najaf Governorate, providing empirical evidence for decision-makers. It also provides immediate outcomes for administrative leaders and audit committees, helping them prioritise development within internal audit departments, especially in terms of improving communication and leveraging strategic use of oversight reports to enhance the reliability and relevance of accounting information used in decision-making.

Figure 1: Hypothetical model of the research.

Source prepared by the researchers.

To test the relationship between the variables, the researcher formulated one main hypothesis, from which three sub-hypotheses branched out, as follows:

First Main Hypothesis: (There is a significant impact of internal auditing on the quality of banking accounting information). The following sub-hypotheses branch out from this main hypothesis:

• The efficiency of internal audit processes and communication has a significant impact on the quality of banking accounting information.
• There is a significant impact of reliance on internal audit outputs on the quality of banking accounting information.
  • Research Methodology:
  • Research Population and Sample:
  • Validity of the Research Instrument (Questionnaire).
  • Reliability of the research instrument (questionnaire) and normal distribution

The descriptive/analytical approach was adopted in framing the theoretical aspect, as well as in studying and analysing the correlations and trends of influence between the research variables.

The sample was represented by administrative leaders from the five commercial banks in Najaf Governorate. In this respect, these banks were chosen based on size, and they belong to the oldest commercial banks operating in the region (National Bank of Iraq, Arab Gulf Bank, International Islamic Bank, Arab Mashreq Islamic Bank, and South Bank). We used a purposive sampling method to compose a sample of 73 administrative leaders from the five banks, reflecting different administrative positions (manager, department head, division head and unit head). The questionnaire was distributed among the sample of seventy-three. Out of the returned questionnaires, two were discarded for being invalid (incompletely filled data), and two were discarded for being outliers (extreme) responses. This resulted in a final analytical sample size of 69 individuals.

The study sample was also different in that, gender, age, educational attainment, years of service, job position, and"(gender, age, educational attainment, years of service, job position) and

Table No. (1): Distribution of sample members according to taxonomic variables

Classification variables	Category	Repetitions”"	%
Gender	Male	47	68%
		Female	22	32%
		Total	69	100%
	Educational attainment	Diploma	7	10%
			Bachelor's	44	64%
			Master's	11	16%
			Doctorate	7	10%
			Total	69	100%
		Years of service	Under 5 years	12	17%
				5-8 years	27	39%
				9-13 years	9	13%
				14-18 years	11	16%
				19 years and above	10	14%
				Total	69	100%
			Age	21-29 years	19	28%
					30-39 years	23	33%
					40-49 years	10	14%
					50 years and above	17	25%
					Total	69	100%
				Administrative position	Director	4	6%
						Head of Department	12	17%
						Section Head	22	32%
						Unit Head	31	45%
						Total	69	100%

Source: Analysis of demographic characteristics using SPSS software

This is evident from the table above.

The data analysis results clearly indicate that the sample of administrative leaders consists of 68% males (47 participants) and 32% females (22 participants). This distribution shows that the majority of leaders in the selected banks associated with this study were male, and this may be a representation of the general distribution of leadership in the banking sector in Najaf Governorate, or it may be due to the focus of the study on positions that are still predominantly occupied by men.

More than three out of four sample members appear to hold a bachelor's degree (64 per cent; 44 participants). This means that this degree is the most common and most desirable for leading positions in these banks. The next highest percentage accounts for the remaining 46% of the academic pyramids, and are many (10%) at the diploma and doctorate levels, indicating a healthy top row for operational and management focused systems through advanced education levels, with a doctoral base likely providing leadership more so with at least a preference of bachelor (66x preferred) or higher degrees only.

Looking at the years of service from the sample, the majority (39%, n = 27) have served for 5-8 years. This concentration indicates that the sample primarily consists of leaders with practical experience in the banking industry, ranging from a short to moderate period, in a stable and mild environment. Less than 5 years of experience accounts for 17% of the workforce. In comparison, more experienced individuals (with 9 years or more of experience) are spread fairly evenly across 13%-16% of the people employed at the studied banks, indicating a similar balance in banks between moderate and long-term experience.

As far as age is concerned, the vast majority of the sample is in the range of 21-39 (28% in the 21-29 range, 33% in the 30-39 range); these two midlife groups comprise 61% of the sample. This distribution suggests that most of the administrative leaders in the sample are relatively young, or at least early middle-aged. The older age group (40 years and above) accounts for about 39%, meaning leadership roles in these banks are mostly given to middle-aged leaders with youthful vigour.

• Gender
• Educational Attainment
• Years of Service
• Age
• Administrative Roles

Analysis of the data indicates that the majority of the sample were unit managers (45%, 31 participants), followed by division managers (32%, 22 participants). This distribution narrows the sample to junior and mid-tier management at banks (unit level and division managers). In contrast, managers and organisational heads (senior levels) account for a reduced proportion (6% and 17%, respectively). This focus is important because it indicates that the study collects views from leaders who are closest to and most engaged with the minute particulars of daily tasks and the circulation of accounting information.

The validity of an instrument refers to its ability to measure what it was designed to measure and achieve the objectives set for it before its development [1]. To establish the validity and reliability of the questionnaire, the researchers administered it to a select sample of 69 administrative leaders in private banks in Najaf Governorate. The research sample included both genders.

1-8-1- Construct v alidity

Construct validity of the questionnaire is one of the approved measurement methods for assessing the research instrument (questionnaire). It measures the extent to which the instrument's objectives are achieved and the degree of correlation between each domain and the total score of the questionnaire items. Table (2):

Table (2): Construct Validity of the Research Domains

Areas	Correlation coefficient	Level of significance
Efficiency of internal audit processes and communication	0.845**	0.000
Reliance on internal audit outputs	0.932**	0.000
Internal auditing	0.889**	0.000
Basic characteristics of accounting information quality	0.937**	0.000
Characteristics that enhance accounting information quality	0.921**	0.000
Quality of banking accounting information	0.929**	0.000

Correlation is significant at the 0.01 level (2-tailed).**

“Source: Compiled by researchers using the outputs of the statistical program SPSS.26 “

According to the total correlation of the domain (dimension) with the total score of the instrument items presented in Table 2, the construct validity of the research instrument is quite high. There is an extremely positive relationship between all coefficient values, as indicated by Pearson correlation coefficients ranging from 0.845 to 0.937. In particular, the domains of dependence of internal audit outputs and fundamental attributes of accounting information quality received the highest correlation coefficients of 0.932 and 0.937, respectively, indicating a strong representation of the theoretical framework in the overall questionnaire dimension. The questionnaire is the right one for the right purpose, as all the correlation values presented in this study confirmed statistical significance (p-value = 0.000), thus aligning with the data collection and research goals at the 0.01 level.

This means that if a scale were to be administered to a group of individuals once. Then, the same scale was administered to the same group a second time, and their scores were recorded. As a result, the relative ranking of individuals in the first administration will be very similar to their relative ranking in the second administration [2]. The normality test, using skewness and kurtosis indices, aims to confirm that the study data have a symmetric normal distribution, which is one of the primary statistical assumptions for applying parametric tests. Skewness and kurtosis values (after calibration) within the range of -1.96 to +1.96 confirm that the sample distribution is normal. Therefore, it is an acceptable distribution for analysis, with no significant deviation (i.e., the mode is not out).

The reliability of the research instrument (the questionnaire) was calculated with Cronbach's alpha coefficient, as well as the normality of the distribution.

Table No. (3): Reliability of the research instrument (questionnaire) and normal distribution

Areas	Number of paragraphs	Cronbach's alpha coefficient	Skewness	Kurtosis
Efficiency of Internal Audit Processes and Communication	3	0.798	1.655	-1.765
Reliance on Internal Audit Outputs	3	0.835	0.986	-0.876
Internal Auditing	6	0.817	0.909	-0.766
Basic Characteristics of Accounting Information Quality	3	0.943	1.211	-1.329
Characteristics that Enhance Accounting Information Quality	3	0.865	0.765	-0.675
Banking Accounting Information Quality	6	0.904	0.854	-0.821
Overall Questionnaire Score	12	0.861	0.980	-0.756

“Source: Compiled by researchers using the outputs of the statistical program SPSS.26 “

As shown in the table, the reliability of the research instrument is high and acceptable, and the Cronbach's alpha coefficients for all domains are between 0.798 and 0.943, values ​​greater than the acceptable minimum value (0.70). This demonstrates the internal consistency and reproducibility of the questionnaire . Concerning the normal distribution, all skewness and kurtosis values for all domains and the total score were within the acceptable limits (between -1.96 and +1.96). This validates that both sample data represent a normal distribution with no substantial or obvious asymmetrical deviations , making parametric statistical tests applicable for hypothesis testing in this study.

Numerous definitions have been offered for the concept of internal auditing. This is because the function of internal auditing has undergone numerous developments in its nature and objectives. A corresponding evolution in its concept has accompanied these developments, thus broadening the definition of internal auditing over time to reflect its evolving understanding.

The modern concept of internal auditing encompasses it as an advisory function, in addition to expanding its scope to include all types of administrative controls. Therefore, we find that the function of internal auditing is not limited to administrative control alone, but also provides accounting control and internal auditing. It is more of an advisory function than an executive one[3].

Accounting is defined as the set of theories and principles that govern the recording and classification of the various transactions carried out by a business, which have an impact on its financial position in monetary terms. The results of these transactions are then presented in financial statements that show the business's profit or loss for a specific period, as well as its financial position at the end of that period. Auditing, on the other hand, is a set of theories and principles that govern the examination of data recorded in books, records, and documents to verify the accuracy and reliability of this data, and the extent to which financial statements accurately reflect the project's performance and financial position [4]. According to Anbar (2014), "Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an institution/organisation's operations[5]. According to Hafsa and Rabiha (2015), "Internal auditing is the assurance and consulting activity designed to add value and improve an organisation as a whole, and its organisational and administrative systems, as well as its governing and financial systems, to enable the organisation to achieve its objectives.[6]" According to Abdullah (2000) internal auditing is 'an evaluation and improvement process for internal control, risk and compliance with respect to the institution, administration and financial processes and processes'[4].

1. Theoretical Aspect
   • The Concept of Internal Auditing
   • The Importance of Internal Auditing.

Internal auditing is important because of the benefits it provides to the organisation. This was pointed out by the Institute of Internal Auditors (IIA) itself in defining the term internal auditing, with adding value being part of the strategic objective. Through its consultative, evaluative, and protective roles, internal auditing is likely to facilitate process improvement and risk reduction with a fair degree of objectivity. One year of internal audit equals three years of external audit, so it is the most important function of any organisation. Internal auditing is a tool for exploration, and it identifies deviations from reality to a standard that was set beforehand. It also avoids mistakes and fraud , and helps in advisory services, as the recommendations from the internal auditor are essential in identifying what needs to be improved. Internal auditing is a tool that serves multiple parties, including managers, existing investors, banks, businesspeople, and government agencies, but it is not an end in itself [7]. Accounting data, which a technical body should audit, is used by project management to plan and monitor performance. This also ensures protection, and several management services are included [8]:

• Preventive services: The internal audit function ensures the protection of the organisation's policies and the appropriate safeguarding of assets.
• Evaluative services: It measures and evaluates the effectiveness of systems. Control within the organisation.
• Evaluation services: These services measure and evaluate the effectiveness of the organisation's control systems.

In the past, internal audit tasks focused on financial and accounting events and their impact on the organisation's performance. As time progressed, it also led to a wider coverage of risk detection that may impact the organisation and its successful execution of procedures and operations within the boundaries of its policies and relevant regulations. The duties and responsibilities of the internal audit department are as follows [9]: 

• Porting to senior management internal audit reports covering activities and monitoring the implementation of recommendations.
• Service periodic competence in managing risk that the organisation may face.
• Evaluating the effectiveness of the methods and procedures in place, and assessing whether they are helping in attaining the organisation's goals.
• Assessing the level of compliance with applicable laws, regulations, policies, and procedures.
• Reporting on the overall performance of the organisation and its departments, and the extent to which they have implemented the planned strategies.
• Verifying the accuracy and validity of financial operations and transactions by examining accounting documents.
  • Objectives of Internal Auditing.

The goal of internal auditing is to enhance and improve an organisation and its processes. It calls for a clearly defined audit plan, and it requires that the auditor have an intimate understanding of the organisation's goals to serve as a consultant in the implementation of process improvements. The internal audit function is designed to provide assurance and consulting activities that add value and improve an organisation's operations (USGS 330). Internal auditing objectives have expanded to include [8][10]: a) Protection: A comparison of performance with standards.

• Improvement: This involves proposing methods and remedies to correct discrepancies between actual performance and standards.
• Partnership: This involves fostering a spirit of effective collaboration among employees to achieve the organisation's goals.
• The current objectives of internal auditing include the following [4]: Assuring compliance with laws, policies, procedures, and plans.
• Assuring the efficiency and effectiveness of the use of Economic Resources.
  • Types of Internal Auditing.
  • Financial Auditing: It is used to generate and target assessing and auditing the financial workings and records of the organisation, and looks to test the fair presentation of financial statements and compliance with accounting standards.
  • Information Technology Audit: Related to the evaluation and auditing of the information and technology systems of the organisation. This means that it seeks to confirm the necessary information protection, system control, and compliance with legal standards and regulations.
  • Compliance Audit: It is concerned with the organisation's compliance with laws, regulations, internal standards, and ethical requirements. It strives to identify, manage potential risks, and foster compliance within the organisation.
  • Environmental Audit: This type of audit primarily assesses the environmental impact of the organisation and determines whether it is following environmental standards properly or not. It seeks to identify environmental threats and mitigate ecological unsustainability.
  • Internal Audit Standards
  • The Concept of Accounting Information
  • Components of Accounting Information

The Classification of Types of Internal Audits. Internal auditing can be classified into several types, which consist of the following [11][12] :

Operational Audit: Assessing the organisation's processes and procedures, which may include physical, administrative, and technical operations. Its purpose is to identify the manner in which the organisation responds to risk and to improve the operational efficiency and effectiveness of the organisation.

Internal audit standards are a professional set of guidelines that audit practitioners must follow. Some of the most recognised internal audit standards include [13]: 

1. International Standards on Internal Auditing (IIA Standards): The global standards for internal audit practice issued by the International Institute of Internal Auditors (IIA). A central set of principles, quality standards, ethics practices, and the role of internal auditors are among the key elements to flesh it out.
2. Internal Auditors' Code of Ethics: This code encompasses all the ethical principles and values required of the internal auditor , including integrity, objectivity, confidentiality, honesty, and credibility.
3. Internal Audit Framework: The internal audit framework is self-drafted by the organisation, covering its strategic objectives and unique requirements. The framework involves determining the genus of parties involved in internal auditing, developing objectives, activities, and duties, as well as category-specific internal performance benchmarks and systems for assessment and enhancement.
4. Internal Audit Standards and Laws: External Standards vary between countries, reflecting local laws and regulations. Internal auditors will have to be aware of the standards and laws of the country in which they are operating.
5. Committed to comply with these standards, Internal auditing practices promote transparency, reliability, and quality of the audit process and assurance of compliance with legal and ethical requirements.

The information collected and analysed is classified as accounting information, which mainly involves the financial and non-cash transactions of organisations. Accounting information is an important source in the accounting system, which is used to generate financial reports, evaluate financial performance, and make informed financial decisions based on data. [12]

Although accounting information differs from one author to another [5], accounting information provides a global perspective on financial practices that pays particular attention to costs, return on investment, and financial strategies. Accounting information is utilised for financial planning, monitoring financial performance, analysing deviations, and making informed decisions based on financial data.

Hassan (2013) defined it as all quantitative and non-quantitative information about economic events that are processed and reported by accounting information systems in financial statements presented to external parties, as well as in internal operating plans and reports [14].

Halawi (2013) views accounting information as comprising both financial and non-monetary data, as well as financial documents, that are collected, analysed, and documented for accounting and financial reporting[15].

So, the elements of accounting information consist of [16]:

1. Timeliness: Accounting information should be made available to users promptly, enabling them to make informed decisions.
2. All-inclusiveness: Accounting information must be comprehensive and inclusive of all qualifying financial and non-cash financial transactions of the entity in an integrated and unified manner.
3. Relevance: Accounting information must prioritise the needs and wants of users. When we discuss this aspect, it generally involves meeting the informational and analytical needs of users.
4. Stability: Accounting information should be capable of being easily interpreted by end-users.
   • Characteristics of Accounting Information Evaluation
   • Precision: The precision of accounting information is essential, as users should be able to trust the content for decision-making purposes.
   • Reliability: This implies that accounting information must be based on reliable sources and should result from accurate and dependable measurement techniques.
   • Completeness — Completeness is a crucial trait of accounting data, as it should encompass each transaction in both monetary and non-monetary terms for the entity.
   • The fourth characteristic is effectiveness, which means that accounting information must be effective in providing the information required to make financial decisions and manage the financial operations of the business.
   • Materiality: Materiality is about allocating and prioritising accounting information in light of its importance to financial decisions.
   • Types of Accounting Information
   • Factors Affecting the Evaluation of Accounting Information

The features of accounting information are vital in assessing its value and effectiveness in facilitating financial decision-making processes. The following are some essential features of accounting information [7]:

There are various forms and types of accounting information. The most common types of accounting information include [17]:

1. Financial Statements: Perhaps the most visible type of accounting information is financial statements. The financial statements of a book mainly include the results of operations in the form of an income statement, a balance sheet, and a cash flow statement. This includes information about the company's finances, such as revenues, expenses, assets, and liabilities.
2. Internal Reports – Internal reports include accounting data for a company, enabling it to conduct effective planning and control. It consists of the operating budget, cost report, and reports on departmental performance.
3. Accounting books: These are the most important part of the accounting information system. They are used to record and document every financial event and transaction. At its simplest, an account is just an individual item, such as accounts receivable, accounts payable, and cost accounts.
4. Tax Reports: Tax reports are regular and are requested by government bodies. It consists of tax return forms, as well as direct and indirect tax reports.
5. Budget — A budget is a key resource for managing and planning finances. The budget outlines the expected spending and income over a specified period, enabling the establishment of financial goals and the monitoring of financial performance.

Several factors influence accounting information. These factors include [18]:

1. Accounting principles: The accounting principles adopted in a country or within an organisation itself have an important influence on the form of accounting information. Some accounting principles may influence the process of recording transactions, estimating the value of assets and liabilities, and preparing financial reports.
2. Changes in Accounting Laws and Regulations: Changes in accounting laws and regulations may impact accounting information. Organisations need to stay abreast of accounting changes and comply with the legal and regulatory requirements that arise.
3. c. Information Technology →The modern technology has contributed a lot to the field of accounting information systems development and usage. Here, all technological development can only change the medium of recording, storing, and analysing accounting information efficiently and accurately.
4. d.  Organisational culture: Organisational culture is a reflection of the basic values and principles of the organisation that will have an impact on how accounting information is collected, recorded, and analysed. Credibility and transparency in preparing and using accounting information — an organisation needs to develop a culture that supports these principles.
5. The Economy and Industry: The general economy and the individual industry in which the organisation operates both affect accounting information. The nature of financial transactions and regulatory requirements may change, which requires accounting information to change accordingly.
   • The Importance of Accounting Information

There are several reasons why accounting information is considered important. The following are some of the key significances of accounting information [19]:

1. Financial Decision-Making: Accounting information provides the data and insights necessary for informed financial decisions, whether for investments, financing, or operational purposes.
2. Planning and Control: The very starting point of the planning and control process in organisations and companies is through accounting information. This aids in establishing financial goals, tracking implementation, and assessing financial performance.
3. Financial Disclosure — Accounting information provides reliable and transparent financial statements that enable stakeholders, such as investors, shareholders, and managers, to gain insight into and assess a company's fundamental financial health.
4. Adherence to Laws and Regulations: The need to comply with the laws and regulations applicable to accounting information and taxation. This will ensure the accuracy of financial reports, ensuring compliance with local and international accounting standards.
5. Enhanced Resource Control: Improved management of financial resources and expenditures through cost analysis and monitoring, as well as periodic reporting on financial performance and trend outlook.
6. Structure and Design of Accounting Systems: Accounting information helps to structure and design effective accounting systems for the efficient and accurate gathering, recording, and evaluation of financial data.
   • Internal Auditing and Evaluation of Accounting Information

Internal auditing can assess accounting information by confirming that it is correct and reliable, and that accounting processes within the organisation are being improved. The following are the most significant aspects of the internal auditing role in improving the value of accounting information [18] [11] :

1. Assessing and Enhancing the Internal System: An internal audit assesses the internal control system within the organisation. This type of system ensures that proper steps are in place regarding effective procedures and policies to monitor and control accounting processes. They identify weaknesses and shortcomings found in the internal system and provide recommendations on how it can be improved, thereby ensuring the evaluation of accounting information.
2. Auditing Accounting Records: Internal auditing scrutinises and verifies accounting records for their accuracy and authenticity. They guarantee that financial transactions and internal and external documents are accurately recorded in accordance with approved accounting standards.
3. Internal Audit Responsibilities: Analysis of Accounting Data - Internal auditing also performs an analysis of accounting data to gain insights into trends, patterns, and potential risks. Numerous financial data and other accounting aspects are analysed to identify potential problems and provide suggestions for improvement to enhance a company's financial performance, and assess the information provided.
4. Ensuring compliance with accounting standards: Internal auditing ensures that the organisation adheres to established accounting standards, whether local or international. The application of correct accounting principles and the provision of complete and accurate financial disclosures are verified to ensure the proper evaluation of accounting information.
5. Recommendations and Improvements: Internal audit provides recommendations and improvements to enhance the evaluation of accounting information and accounting processes in general. Management is guided on required improvements to accounting policies and procedures, promoting the use of technology, and improving the overall efficiency of accounting operations.
1. Third: The practical analytical aspect
   • Descriptive analysis of the questionnaire items:
   • Testing Research Hypotheses and Discussion of Results
   • Testing the first hypothesis: There is a relationship between internal auditing and the quality of banking accounting information.

The descriptive analysis of the questionnaire items aims to quantify the level of agreement among bank management regarding different fields of internal auditing in the assessment of accounting information. On a five-point Likert scale (1—strongly disagree, 5 —strongly agree), the hypothetical neutral point is 3. Thus, if the mean of an item is greater than 3, it was rated with positive agreement and therefore is statistically significant. If the mean is greater than 3, it indicates that the responses from the sample are biased to "I agree" or "I strongly agree", which indicates support from the sample regarding the importance of the item and how much it will contribute to achieving the research objectives of the impact of Internal Auditing on the quality and reliability of accounting Information. [20].

3-1-1- Analysis of Internal Audit Items.

To analyse the items for this variable, the arithmetic mean, standard deviation, relative weight, item ranking, and agreement score were used. Table 5 illustrates this:

Table 4: Analysis of Internal Audit Items.

First dimension: Efficiency of internal audit processes and communication
	Paragraphs	mean	standard deviation	relative weight	Order	Degree of approval
1	Specific measures are in place to evaluate the performance of your organisation's internal audit unit.	3.61	0.679	72%	1	Large
2	Effective communication and collaboration exist between the internal audit team and management.	3.34	0.842	67%	3	Neutral
3	Internal audit outputs are properly documented.	3.50	0.821	70%	2	Large
	Total	3.48	0.781	70%		Large
The second dimension: Reliance on the outputs of internal auditing
	Paragraphs	mean	standard deviation	relative weight	Order	Degree of approval
4	Internal audit reports are used as a decision-making tool within your organisation.	3.71	0.653	74%	1	Large
5	The outputs of internal audits are reliable and useful for management in making strategic decisions.	3.28	0.834	66%	3	Neutral
6	Internal audits identify errors and potential areas for improvement in accounting processes.	3.54	0.743	71%	2	Large
	Total	3.51	0.7433	70%		Large

“Source: Compiled by researchers using the outputs of the statistical program SPSS.26 “

The table above shows:

The results revealed an extreme consensus among managers regarding the efficiency of internal audit processes and communication, with an overall average Value of 3.48 and a relative weight of 70%, which is higher than the hypothetical mean (3). The first and highest averaged measure (3.61) of agreement was "the existence of specific measures to assess how well the audit unit is performing," with a "high" level of agreement, indicating that the above banks want the developed system to evaluate supervisory performance. In contrast, "effective communication and cooperation" averaged lowest (3.34) and received a "neutral" level of agreement, signifying that this aspect is the weakest point within the dimension and requires reinforcement to facilitate auditor and management interaction better.

It was found that this dimension was consistently agreed upon to a "high" degree (Mean = 3.51, total weight = 70%), indicating that management does depend on the output of the audit in its work. The third statement, with the highest average score (3.71) and a "high" level of usage agreement (82%), was "Using internal audit reports as a portion of the decision-making tool." This confirms the very practical use of audit findings in day-to-day decision-making. On the other hand, the assertion "audit outputs are reliable and can be used for strategic decisions" scored the lowest average (3.28) and a "neutral" level of agreement, suggesting that management might see audit outputs as more operationally related (decision-making) rather than influencing major plans and the organisation's strategy.

3-1-2- Analysis of Banking Accounting Information Quality Items:

To analyse the items of this variable, the arithmetic mean, standard deviation, relative weight, item ranking, and degree of agreement were used. The table below illustrates this:

Table No. (5): Analysis of Banking Accounting Information Quality Items

First dimension: The basic characteristics of the quality of accounting information
	Paragraphs	mean	standard deviation	relative weight	Order	Degree of approval
1	Internal auditing contributes to improving the relevance of accounting information.	3.54	0.649	71%	2	Large
2	Internal auditing contributes to the accurate and truthful representation of accounting information.	3.12	0.932	62%	5	Medium
3	Internal auditing contributes to improving the understandability of accounting information.	3.44	0.711	69%	1	Large
	Total	3.37	0.764	67%		Extra Large
The second dimension: Characteristics that enhance the quality of accounting information
	Paragraphs	mean	standard deviation	relative weight	Order	Degree of approval
4	Internal auditing contributes to improving the comparability of accounting information.	3.67	0.665	73%	1	Large
5	Internal auditing contributes to the improvement of the timeliness of accounting information.	3.44	0.754	69%	3	Large
6	Internal auditing contributes to improving the verifiability of accounting information.	3.58	0.733	72%	2	Large
	Total	3.56	0.717	71%		Large

“Source: Compiled by researchers using the outputs of the statistical program SPSS.26 “

The results can be drawn from the table above:

This dimension observed a high level of overall agreement by management, with an overall mean of 3.37 and a relative weight of 67%. Hence, this confirms that internal auditing contributes to improving the basic dimensions of information quality. G.A. The item "Improving Understandability" with a mean of (3.44) and the item "Improving Relevance" with a mean of (3.54) were first and second in TS with a high level of agreement. Conversely, "Improving Honest Representation" received the lowest mean (3.12) and moderate agreement. This indicates that the respondents perceived the auditing benefit for the veracity of the information (honest representation) as the least important, compared to the characteristics of relevance and understandability.

• Dimension 1:Demand for an efficiency of internal audit processes and communication
• Second Dimensionality: The dependence on Internal Audit work outputs
• The first   criterion: The most important elements in the need for accounting information quality
• The Second Dimension: Characteristics that improve the quality of accounting information

The overall mean relative value on this dimension was 3.56 (relative weight: 71%), indicating that management is confident about the role of internal auditing in improving quality, while also showing high agreement in each of the items. The "Improving Comparability" item (3.67) and the "Improving Verifiability" item (3.58) were ranked first, with the overall highest average scores and both levels of agreement at "high." This ranking shows that respondents consider Internal auditing to contribute to the standardisation and reliability of policy, which enables the comparability and verifiability of accounting information, ultimately increasing the value of information for financial statement users and thereby attesting to the value of auditing.

• Hypothesis tests examine the relationship between two variables in a research study. Now there are two kinds of hypotheses:
• Null Hypothesis: There is no relationship between the two research variables (statistical significance).

The Relationship between the Research Variables: Alternative Hypothesis - There is a statistically significant relationship between the two research variables.

If the p-value (Sig. In this case, the p-value is greater than the level of significance of 0.05; thus, the null hypothesis cannot be rejected. Therefore, there is no statistical correlation between the two variables. However, suppose the p-value (Sig. If the significance level (p-value)) is less than 0.05. In that case, the null hypothesis is rejected and the alternative hypothesis is accepted, which states that there is a statistically significant relationship between the two variables. Confirmatory Factor Analysis (CFA) is a type of structural equation modelling. This method works with numerous variables and also attempts to condense these variables into a smaller set by measuring how the items fundamentally belong to the dimension for which they were created. To interpret the confirmatory factor analysis of the study variables, these variables must meet quality-of-fit criteria. The indicators in the table below show the goodness of fit from structural equation modelling.

Table (6) Conformity Quality Indicators according to the Structural Modelling Equation

Index	Rules
Ratio between (x2) value and degrees of freedom (CIMN/df)	Less than (0.05) Good, less than (0.02) Compliant, greater than (0.05) Rejected
Quality of Fit Index (GFI)	Value range between (0) - (1), Acceptance rule: greater than (0.90), greater than (0.95) Compliant
Comparative Fit Index (CFI)
Tucker Lewis Index (TLI)
Root Mean Square Error of Rounding (RMSEA)	Less than (0.05) Compliant, values ​​between (0.05 - 0.08) Good, values ​​between (0.10 - 0.08) Average, values ​​greater than (0.10) Rejected.
Item Saturation Rate	Greater than 0.40

Source: Hair, J. F., Hult, G. T. M., Ringle, C. M., & Sarstedt, M. (2017) “A Primer on Partial Least Squares Structural Equation Modelling (PLS-SEM),” 2nd Ed. Thousand Oaks, CA: Sage, p.289.

Based on these indicators, the proposed data model is either accepted or rejected. It is noted that all calculated indicators align with the standard indicators, indicating that the proposed model is suitable for actual application.

Table (7) Confirmatory Factor Analysis of Internal Auditing and the Quality of Banking Accounting Information

The symbol	The path	Dimensions	Standardized assessment	standard error	Critical ratio	Sig.	Label
Confirmatory factor analysis of internal audit
X11	<---	Efficiency of internal audit processes and communication	.826				Accepted
X12	<---			.851	.065	15.258	***	Accepted
X13	<---			.849	.067	15.221	***	Accepted
X31	<---		Reliance on internal audit outputs	.720				Accepted
X32	<---				.764	.097	10.854	***	Accepted
X33	<---				.822	.095	11.397	***	Accepted
Confirmatory factor analysis of the quality of banking and accounting information
Y11	<---	Essential characteristics of accounting information quality	.813				Accepted
Y12	<---			.877	.073	16.219	***	Accepted
Y13	<---			.882	.068	16.339	***	Accepted
Y21	<---		Characteristics that enhance accounting information quality	.882				Accepted
Y22	<---				.825	.061	16.637	***	Accepted
Y23	<---				.864	.057	17.906	***	Accepted

“Source: Compiled by researchers using the outputs of the statistical program AMOS.24 “

To test this hypothesis, the researchers used structural equation modelling, as illustrated in the figure below:



Figure 2: The relationship between internal auditing and the quality of banking accounting information

Source: Amos 24)

Table (8): The relationship between internal auditing and the quality of banking accounting information

Independent variable	The path	Dependent variable:	Standardized assessment	standard error	Critical ratio	R2	Sig.	Label
Internal audit	<---	Quality of banking accounting information	0.6 21	0.0 65	7. 654	0.42	0.010	Accepting the hypothesis

“Source: Compiled by researchers using the outputs of the statistical program AMOS.24 “

The analysis of the structural equation model begins with confirming that the indicators of the Goodness-of-Fit-based procedure are evaluated (GFI = 1.000; CFI and TLI approach one) as appropriate and accepted , as the fit of the empirical data to the observed data is high in both cases (0.073). The test results of the first hypothesis indicate a strong, direct and positive relationship between internal auditing and the quality of banking accounting information, with a standardised value of 0.621 (the value stated in the text of 0.697, which I will refer to in the value table of 0.621) So that the magnitude of the contribution of internal auditing to quality is very high. Moreover, the t-statistic (7.654) and p-value (0.010) validate that this effect is significant. The R² of 0.42 indicates that internal auditing can explain 42% of the variance in banking accounting information quality. This high percentage of explained variation confirms the hypothesis that a connection exists between the two variables in the banks included in the sample.

Based on the data, the tests conducted by the researchers were as follows: a test of internal auditing dimensions and a test of the quality of banking accounting information.



Figure (3): The relationship of influence between (dimensions) of internal auditing and the quality of banking accounting information

“Source: Compiled by researchers using the outputs of the statistical program AMOS.24 “

Table No. (9): The relationship of influence between (dimensions) of internal auditing and the quality of banking accounting information

Dimensions of the independent variable:	The path	Dependent variable:	Standardized assessment	standard error	Critical ratio	R2	Sig.	Label
Efficiency of internal audit processes and communication	<---	Quality of banking accounting information	0.321	0.092	6.609	0.39	0.000	Accepting the hypothesis
Reliance on internal audit outputs	<---	Quality of banking accounting information	0. 411	0.089	7.554			0.021	Accepting the hypothesis

“Source: Compiled by researchers using the outputs of the statistical program AMOS.24 “

Results: The overall structural equation model (SEM) exhibits an excellent fit to the experimental data, with high concordance of the fit index values. The GFI (1.000) was accepted as being the highest, and the CFI (0.987) and TLI (0.989) also exceeded the acceptability point (0.95), validating the model's reproducibility of the model relationships vs. the data. Moreover, the root mean square error of approximation (RMSEA) was 0.073, which was also appropriate after rounding, indicating the decent quality of the model and the consistent outcomes of the pathways. As such, the first part of the hypothesis outcomes was thus.

As shown in the table and figure abov e , both hypotheses are accepted.

According to the output of structural equation modelling (SEM) and the fit index of the model (GFI = 1.000), the effect of the dimensions of internal auditing on the quality of accounting information in banks was examined, and the two sub-hypotheses were accepted. The findings indicated that the effectiveness of communication processes and internal auditing has a positive and significant effect on the quality of banking accounting information, supporting these hypotheses. The normalised value of this effect was 0.321, which corresponds to a medium-to-large effect, suggesting that this impact will result in improved information quality due to the increased efficiency of audit procedures and the effective communication of conclusions to management. A critical ratio of 6.609 and a significance value of 0.000 confirmed this significant effect. The R² value of 0.39 suggests that process efficiency and communication can account for approximately 39% of the variability in the quality of information, reinforcing the importance of organised control processes that enhance the quality of accounting system outputs.

Effect of Leaning Over Internal Audit Outputs on the Quality of Information [Banking Accounting Information] — The results have confirmed a statistically significant positive impact of leaning over internal audit outputs on the quality of banking accounting information, thus supporting the hypothesis. This impact was robust, with a standardised beta value of 0.411, the highest among all four dimensions assessed, and the most influential determinant of increasing quality. The critical ratio (7.554) and significance value (0.021) support this role, which is a crucial combination of the human side of writing audit reports and recommendations, as well as management's involvement in the decision-making process, both of which are significant in determining the effectiveness of accounting and the capital market. This dimension highlights the significant value of R2, indicating that it can adequately explain the variance based on information quality.

1. Conclusions
• The internal audit has a very strong and significant positive effect on one macrovariable of the quality of accounting information in banking. It accounted for 42 per cent of the variance in information quality, highlighting the role of the internal control function as a basic tool by which banks evaluate information. This finding confirms the main hypothesis of the research. It demonstrates that the existence of an independent internal audit plays the most significant role in achieving reliable outputs and the quality of accounting information by ensuring that high standards of accounting outputs are met through internal audit. The internal audit role in enhancing the reliable accounting outputs of certain processes in private banks in the Najaf Governorate.
• The results of the research suggested that the biggest effect on the quality of accounting information was "reliance on internal audit outputs," with a standardised beta of 0.411, which is greater than the effect of operational efficiency. This means that part of the value of internal auditing extends beyond the quality of the internal audit process and relates to how management familiarises itself with and applies such reports and recommendations in its daily and strategic decision-making, thereby improving the qualitative aspects of the information.
• The analysis, however, exposed weaknesses such as the items "Effective communication and cooperation" and "Considered as outputs useful for strategic decisions, received the lowest level of agreement (neutral) respectively. There appears to be a lack of connection between the internal auditor and senior management. Audit Reports are extensively used in operational decisions; however, they have not yet fully assumed the status of a strategic tool trusted in shaping the bank's future direction.
• While there was a high level of consensus about the extent to which auditing contributes to enhanced characteristics such as comparability and verifiability (H2:agree; avg = 4.24), the section on "improving the truthful representation" of the accounting information received the lowest average score (3.12) and "moderate" level of agreement. It implies that internal audit works cannot be directed to ensure that accounting information is free from undue bias or material misstatements, so as not to affect the reliability and fairness of accounting information, the basic characteristics on which the quality of information rests.

Recommendations

• Auditors are advised to explore avenues for communication and collaboration between the internal audit function and management leaders—especially the board of directors and audit committee—to the next level by converting audit reports from purely oversight vehicles to strategic advisory vehicles. Strategic analysis and recommendations should ideally be the core offering of internal auditors, aligned with the mission of serving and supporting the bank in achieving its long-term goals, rather than providing tactical insights into operational processes.
• The internal audit methodology in private banks needs to evolve to place greater emphasis on the representation of fair accounting information, and internal auditors should be specially trained in the new International Accounting and Financial Reporting Standards. By focusing on this, the likelihood of bias and material misstatement will be significantly reduced, allowing management and external stakeholders to be confident in the accuracy and reliability of the financial data.
• We hope that this can give bank management even more confidence in relying on internal audit findings in strategic and resource allocation decision-making — and not just in day-to-day decisions. This can be achieved by making audit recommendations a permanent agenda item of senior committee meetings and then establishing follow-up systems to ensure the implementation of corrective actions that support the bank's strategic goals. 4. We would like to emphasise that banks, especially those with the highest approval rates for their performance assessment measures, should advance these measures as key performance indicators (KPIs) that calculate not just the number of tasks conducted but also the underlying value contributed by the audit unit. These KPIs will focus on measuring the unit's contribution to increasing operational efficiency, decreasing operational risks, and overall empirically demonstrating support for the qualitative characteristics of accounting information.

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