TRANSPARENCY OF INFORMATION IN THE FINANCIAL STATEMENTS AND THE

EXTENT TO WHICH IT DISCLOSES THE FUTURE EXPECTATIONS OF ECONOMIC

UNITS USING THE TOBIN S Q INDEX

Jinan Abdul Abbas Baqer Al Dulaimi A , Ezzaddin Hasan Kadhim B

ARTICLE INFO ABSTRACT

Article history: Purpose: The research aims to determine the nature of the relationship between the
transparency of disclosure in the financial statements and the closing prices of stocks
Received 04 October 2022 and future expectations.

Theoretical framework: The knowledge bases of information transparency in the

Accepted 06 December 2022 financial statements and how to disclose the future expectations of the economic units
of the research sample were highlighted.
Keywords:
Methodology: The financial data of five of the Iraqi banks listed in the Iraqi Stock
Information Transparency; Exchange for five periods were collected, and then the data was analyzed according
Future Expectations; to the closing price of each bank, and then extracting the indicator for the tool used in
Tobin sQ Index. the study according to special equations that were clarified in the practical side.

Findings : The necessity for the economic units listed in the capital markets to
improve the level of transparency in disclosure by disclosing all information related
to their activities, whether they are historical, current or future information.

Research & Social implications: This study achieves the objectives of the research
the financial reports of a number of banks listed on the Iraq Stock Exchange (the
National Bank of Iraq, the Gulf Commercial Bank, the Commercial Bank of Iraq, the
Trans-Iraq Commercial Bank, the Investment Bank of Iraq) for the period 2015-2020.

Originality/value: This study focuses on how to influence the financial statements

for the purpose of clarifying future expectations of economic events in the banking
sector, which is one of the important sectors in building the global economy.

Doi: https://doi.org/10.26668/businessreview/2022.v7i5.766

TRANSPARÊNCIA DAS INFORMAÇÕES NAS DEMONSTRAÇÕES FINANCEIRAS E A MEDIDA

EM QUE REVELA AS EXPECTATIVAS FUTURAS DAS UNIDADES ECONÔMICAS UTILIZANDO
O ÍNDICE TOBIN S Q

RESUMO
Objetivo: A pesquisa visa determinar a natureza da relação entre a transparência da divulgação nas demonstrações
financeiras e os preços de fechamento das ações e as expectativas futuras.
Estrutura teórica: Foram destacadas as bases de conhecimento da transparência das informações nas
demonstrações financeiras e como divulgar as expectativas futuras das unidades econômicas da amostra da
pesquisa.
Metodologia: Os dados financeiros de cinco dos bancos iraquianos listados na Bolsa de Valores do Iraque por
cinco períodos foram coletados, e então os dados foram analisados de acordo com o preço de fechamento de cada
banco, e então extraindo o indicador para a ferramenta usada no estudo de acordo com equações especiais que
foram esclarecidas no lado prático.

A
Assistant prof. of accounting, Al-Furat Al-Awsat Technical University, Babylon Technical Institute - Accounting
Department, Hilla - Iraq. [email protected] Orcid: https://orcid.org/0000-0003-3810-1192
B
Assistant prof. of cost accounting, Al-Mustaqbal university college, Accounting Department, Hilla – Iraq.
E-mail: [email protected] Orcid: https://orcid.org/0000-0001-6743-352X

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Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

Conclusões : A necessidade das unidades econômicas listadas nos mercados de capitais de melhorar o nível de
transparência na divulgação, divulgando todas as informações relacionadas às suas atividades, sejam elas
informações históricas, atuais ou futuras.
Pesquisa e implicações sociais: Este estudo atinge os objetivos da pesquisa os relatórios financeiros de vários
bancos listados na Bolsa de Valores do Iraque (Banco Nacional do Iraque, Banco Comercial do Golfo, Banco
Comercial do Iraque, Banco Comercial Trans-Iraque, Banco de Investimento do Iraque) para o período de 2015-
2020.
Originalidade/valor: Este estudo se concentra em como influenciar as demonstrações financeiras com o objetivo
de esclarecer as expectativas futuras de eventos econômicos no setor bancário, que é um dos setores importantes
na construção da economia global.

Palavras-chave: Transparência da Informação, Expectativas Futuras, Índice Tobin sQ.

TRANSPARENCIA DE LA INFORMACIÓN CONTENIDA EN LOS ESTADOS FINANCIEROS Y

GRADO DE REVELACIÓN DE LAS EXPECTATIVAS FUTURAS DE LAS UNIDADES
ECONÓMICAS MEDIANTE EL ÍNDICE Q DE TOBIN

RESUMEN
Objetivo: La investigación pretende determinar la naturaleza de la relación entre la transparencia de la
información divulgada en los estados financieros y los precios de cierre de las acciones y las expectativas futuras.
Marco teórico: Se destacaron las bases de conocimiento de la transparencia de la información en los estados
financieros y la forma de divulgar las expectativas futuras de las unidades económicas de la muestra de la
investigación.
Metodología: Se recopilaron los datos financieros de cinco de los bancos iraquíes que cotizan en la Bolsa de
Valores de Irak durante cinco períodos, y luego se analizaron los datos según el precio de cierre de cada banco,
para luego extraer el indicador de la herramienta utilizada en el estudio según ecuaciones especiales que se
aclararon en la parte práctica.
Conclusiones : Necesidad de que las unidades económicas que cotizan en los mercados de capitales mejoren el
nivel de transparencia en la divulgación de información, divulgando toda la información relacionada con sus
actividades, ya sea información histórica, actual o futura.
Investigación e implicaciones sociales: Este estudio alcanza los objetivos de la investigación los informes
financieros de una serie de bancos que cotizan en la Bolsa de Valores de Irak (el Banco Nacional de Irak, el Banco
Comercial del Golfo, el Banco Comercial de Irak, el Banco Comercial Trans-Iraq, el Banco de Inversiones de
Irak) para el período 2015-2020.
Originalidad/valor: Este estudio se centra en cómo influir en los estados financieros con el fin de aclarar las
expectativas futuras de los acontecimientos económicos en el sector bancario, que es uno de los sectores
importantes en la construcción de la economía mundial.

Palabras clave: Transparencia Informativa, Expectativas Futuras, Índice sQ de Tobin.

INTRODUCTION
Transparency is one of the important issues and at the top of the list of issues that dealers
are interested in in the stock market because it offers equal opportunities to obtain accounting
information that serves all its users, especially with the globalization of information, a right
guaranteed by all local and international legislation and laws alike in various countries, and
with All this progress that the business environment is witnessing at the present time and the
emergence of the features of globalization of financial markets in the global economy,
information is no longer limited only to financial statements that represent the minimum level
of accounting disclosure, but rather goes beyond that to reach information transparency, which

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Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

focuses on detail in financial statements and reports. issued by economic units in a way that
provides comprehensive and detailed information that serves all parties at the lowest costs, and
the Institute Chartered Financial Analyst (CFA) stressed the need of the investment
community for transparent information in order to ensure the preservation of the welfare of
millions of investors who directly depend on the information disclosed in the financial reports
when making portfolio formation decisions investment.
The research aims to achieve the relationship between the disclosure of future financial
information and the market value of the economic units listed in the Iraqi Stock Exchange and
the expectation of the closing price (the research sample) by relying on future expectations for
it by adopting the Tobin s Q index and determining the nature of the relationship between
transparency of disclosure in the lists Financial, closing prices of shares and future expectations,
whether the relationship is positive or inverse.

LITERATURE REVIEW
There are many definitions of transparency, as there are those who believe that it arises
when the information that is disclosed is clear in addition to its easy access to the market Clare
et al., (2005). The definition focused on the disclosure of information in addition to the ease of
access to it, according to Barth and Schipper (2007), the transparency of financial reports is the
degree that enables financial reports to reveal the economic aspects of assets in an objective
manner that users understand. And the current decisions and actions are available, foreseeable
and understandable to all parties annually (Dawaq and Farhat, 2019), the definition focuses on
that the information be declared and understandable to all internal and external parties in the
economic unit, the transparency of accounting information is defined as reliable accounting
information that helps users make decisions accurately (Klinsukhon et al., 2016), and the
literature talks about several ways of transparency within the economic unit, political
transparency (objective rules), and transparency within the economic unit. Economics (data and
models used), procedural transparency (decisions, votes), transparency regarding policy
outcomes used and operational transparency (Man&Ciurea, 2016).
According to the degree of transparency, information is grouped into two large
categories: fully transparent information and partially transparent information. Information
Fully transparent information is that which indicates the financial position and performance.
This is subject to financial accounting, which is the external interface of the economic unit and
provides information on asset management and is necessary for the internal decision-makers of
the economic unit, as well as information on financial results necessary for external users,

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Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

including the state. It is obtained through strict rules established by the Ministry of Finance for
it, has a standardized character, is published so that all interested persons are properly informed.
As for the information that is less transparent or with partial transparency, it refers to the
calculation of costs, to the budget structure of the economic unit, to the knowledge of internal
performance, etc. Subject to management accounting which is the internal face of the unit. It is
not of a standardized character and is not disclosed to the public (Man&Ciurea, 2016).
Based on the foregoing, the researcher believes that transparency is related to the quality
of information, so that the required information must be easy to understand and realistically
accurate by the target audience and be presented in order to provide an advantage that
encourages the adoption of desired behaviors.
It refers to the interpretation of the accounting information contained in the financial
statements and published reports in order to improve the quantity and quality of accounting
information to serve users and all parties related to the economic unit.
Information transparency gains its importance from being beyond accounting
principles, standards and legislative requirements in financial reports to accounting disclosure
that works to provide users with the information they need to make their decisions, and the
importance of information transparency increases for the following reasons (Abdul
Rahman:2019:p. 8):
o Increase the process of clarifying the values of items contained in the financial
statements.
o Reducing the degree of volatility in the financial markets to ensure financial stability.
o Moderate market participants' response to bad news, as well as helping anticipate and
evaluate negative information.
o Helps reduce information asymmetry
o Decreasing the tendency of markets to focus unnecessarily on positive or negative
news.
o Working to identify the circumstances that led to the change in accounting policies.
1- What are the future expectations:
The American Society of Certified Public Accountants (AICPA, 2015) defines future
expectations as any information related to the future that may be presented in the form of
complete financial statements or partial financial statements that include one or more elements
(Saleh et al.: 2019), and in the same context, financial information is defined For the future, it
is information about current and future plans and expectations that enable shareholders and

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Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

other investors to assess the future financial performance of the economic unit, i.e. it is
information about the future that later becomes information
Historical (Hussainy, 2004), and the media content of financial reports should contain
useful and valuable information in order to include, in addition to financial expectations of
future profits, cash flows, and expected revenues, other non-financial information such as: the
nature of work, management objectives, resources and risks And the expected performance of
the economic unit (Abdul Ghaffar: 2020). Through the previous definitions, the most important
characteristics of financial information with future expectations can be identified as follows:
• It is quantitative financial information.
• It is oriented towards the future, so it bears the risks of non-verification.
• They are placed according to specific assumptions and not randomly.
• They take the form of historical financial statements and are organized into financial
statements with future expectations.
Future forecasts are defined as: future financial information prepared on the basis of
assumptions about future events that the management expects to occur and the expected
reaction of the management when those assumptions are realized on the date on which the
information is prepared (Saleh et al.: 2019).
The interest in expectations with future information is due to (Kiso and Wigant: 2009):
A. Investment decisions are based on future expectations. Information related to the
future facilitates making better decisions.
B. Financial forecasts are already circulated now, but in an informal and uncensored
manner and are not equally available to all investors, and such a case must be subjected
to more oversight.
C. Circumstances are now changing so rapidly that historical information is
insufficient for forecasting.
D. Financing decisions need future information on the expected impact of each
source of financing on long-term profitability and liquidity, and on the extent of the
project’s ability to meet its future obligations (Al-Habbash: 62).
E. When buying or selling shares, the investor needs to forecast the expected profits
and the share of one share of these profits.

Future financial forecasts seek to achieve several goals, including (Saleh et al.: 2019):
A. To assist users in evaluating performance, the unit's expected financial position
and future cash flows.

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Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

B. Creating a good relationship with each of the investors and financial analysts in
a way that helps in strengthening the ability of the economic unit to attract new capital.
C. Providing information that helps in forecasting the future cash flows of the
economic unit that assists current and potential investors, lenders and others in
estimating the size and timing of the unit's cash flows.
D. Providing information on the economic resources owned by the economic unit
and the obligations that clarify information on the financial performance of the
economic unit, as investors and lenders use the financial information in the financial
statements.
E. Assisting external users to make decisions related to the future.
F. Reducing the cost of external financing.
G. helps reports on future financial information provided to the Donors to credit for
a decision granting credit, and may be in the form of budgets of discretionary (sales
budget, production budget, budget procurement, budget expenses and Budget) or in the
form of financial statements (income statement estimated, a list of center Estimated
financial statement and estimated cash flows).

Transparency of information in the financial statements and its impact on future

expectations
That the economic units announce their major projects and contracts to investors,
because the investors have the right to see the activity of the economic unit in order to rely on
the information announced in their future expectations for the development of its financial
performance and its reflection on the stock in the future. It is necessary to compel economic
units to set their expectations for future results. It is of very great importance in providing
transparent information to the market and reducing the fluctuations currently taking place.
Investment is based on the future and the investor is concerned about what will be the case and
not what happened in the past. When the economic unit discloses its quarterly or annual results,
it announces work It is over, but the most important thing for any dealer and continuity is the
next stage, and the announcement of future expectations by the economic unit is based on a real
vision and not possibilities (Al-Aqari, 2013), and to emphasize the need to support the level of
transparency of the financial report, Russel Picot, Chief Financial Officer of HSBC As well as
Stephen Haddrill, Executive Director of the Financial Reporting Council (FRC) in Britain,
stressed the need to add further improvements to financial reports in order to support their level
of transparency. They also made clear that the required transparency is not only in the financial

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Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

report, but in the financial system as a whole, in order to allow investors to understand how
economic units handle information and what are the administrative controls Governing the
Information Disclosure Decision (Land: 2021), and the transparency of the financial statements
is ensured by Through full disclosure and by providing a clear presentation of the information
necessary for decision-making (Hammad, 2005), and in order to achieve information
transparency in the financial statements, it is necessary to achieve transparency in the following
areas: - (www.acc4.arab.com)
A. Transparency of the accounting principles and methods that were used in
determining and measuring the impact of economic transactions and events on the
performance of the economic unit and its economic status.
B. Transparency of management’s personal assessments and judgments that have a
fundamental impact on the economic unit.
C. Forecasting transparency by disclosing the permanent or recurring nature of the
items of income, expenses, gains and losses.
D. Transparency of access to information that the financial reports and the
information they contain are available to all investors without discrimination in order to
achieve equal access to information among all investors.
E. Transparency in the field of ownership structure and investor rights. Financial
reports must include adequate disclosure of the types of shares, types of investors,
names of major investors in shares ... etc.
Transparency and disclosure in the market help investors build their investment
decisions on scientific data and keep them away from common risks, which supports the
investment climate in the market (Bakai: 2014) as market reports bear great importance to the
investor through the accuracy of the information contained therein by giving More reliability
for the investor in the economic units listed in it about its disclosure of its expected business in
the future. The economic unit can clarify the circumstances of any report as it contains
inaccurate information that has a substantial and significant impact on investors, which
increases disclosure and clarity to the investor and makes it easier for him to make his decisions,
which will reflect positively on the market and attract investments to him and raise his
Efficiency of trading (Anwar: 2012), where market dealers often explain that the
administration’s failure to disclose future financial information that it has bad information that
it hides (ANWAR: 2015), and it requires enhancing the transparency of the information
contained in the financial statements through (AlArdy:2021):

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Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

A. Obligation to disclose new information in the report on the commitment to

implement governance mechanisms.
B. Obligation to report information related to social responsibility and
sustainability. Several government regulations or guidelines have been issued by
professional organizations with the aim of regulating the report on social responsibility
and sustainability.
C. Initiatives aiming to report on intellectual capital.
D. The integrated report, which represents one of the most important methods for
regulating voluntary disclosure by regulating the report on non-financial information.

Research Methodology
The research problem lies in the investors’ need for financial and non-financial
information in order to benefit from it in making investment decisions. Accurate and right, and
using this information as a basic criterion for predicting the future
The research seeks to achieve testing the relationship between the disclosure of future
financial information and the market value of the economic units listed in the Iraq Stock
Exchange, and forecasting the closing price (research sample) by relying on future expectations
for it by adopting the Tobin s Q index, and determining the nature of the relationship between
transparency of disclosure in the financial statements, closing prices of shares, and future
expectations, whether the relationship is positive or negative.
The importance of research derives from the increasing importance of the value of future
information and the size of its impact on users' decisions, which requires the need to disclose
future expectations by adopting the transparency of financial statements, in In addition to the
fact that the presence of transparency disclosure in the financial statements of economic units
helps users to predict the future of the economic unit's profits or losses and stock prices on
31/12 through the availability of correct, accurate and clear information.
Research hypothesis: In light of the research problem and to achieve its objectives, the
hypothesis has been formulated in:
There is a statistically significant correlation between the transparency of information
in the financial statements, the closing prices of shares in the market, and the future expectations
of the research sample.

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Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

Tobin's Q. scale
Tobin's sq was introduced by the scientist (James Tobin), as an indicator for predicting
the future profitability of investment (Tobin 1969), and it is a tool usually used in the field of
economics and finance as an indicator of the performance of economic units, and one of the
main advantages of using Q is to reduce any Distortions due to tax and accounting laws, because
it uses the market value of the capital of the economic unit, which includes risk factors and its
future profitability (Chen & Lee, 1995), and it is seen as the best measure of the performance
of economic units than any other accounting procedures such as return on assets (ROA). ) or
return on sales (ROS) (Griliches ,1981) (Al-Nuaimi: 2012), and it is defined as the ratio between
the market value of the economic unit’s assets divided by the replacement cost of those assets
(Fu & other: 2016), and it is calculated as follows (Chung & Pruitt, 1994):

Approximate Q= (MVE + PS + DEBT) / TA D = (AVCL – AVCA) + AVLTD

MVE = Number of shares subscribed x share price on 12/31

PS = Preferred Stock Value
DEBT = (Short-term liabilities - short-term assets + book value of long-term liabilities)
TA = book value of the assets of the economic unit.

Calculating Tobin's q. value

The value of Tobin's q was calculated for the research sample for the period from 2015-
2020, where the result obtained from the above equation is considered closer or greater than
one, true. This indicates that the value of the economic unit is at a better level and with good
performance, and vice versa, the closer the result to zero indicates a low The value of the
economic unit and its assets have been given a value higher than their real value,
Table (1) shows the calculation of the value of Tobin's q index for the research sample
for the period 2015-2020:

Closing
the number Current total Q .
bank price Liabilities
year of shares assets assets indicator
12/31
The National Bank of Iraq 0.92 250,000 893,965 860,759 893,965 2.2
Gulf Commercial Bank 0.14 300,000 510,798 422,406 510,798 1.9
2020 Iraqi Commercial Bank 0.44 250,000 616,949 607,231 616,949 2.1
Trans Iraq Commercial Bank 0.7 264,000 341,896 338,101 341,896 2.5
Iraqi Investment Bank 0.23 250,000 571,480 533,911 571,480 2
Average 2.17
The National Bank of Iraq 0.61 250,000 632,804 462,181 632,804 1.9
Gulf Commercial Bank 0.14 300,000 549,146 203,241 549,146 1.4
2019
Iraqi Commercial Bank 0.46 250,000 449,777 288,517 449,777 1.8
Trans Iraq Commercial Bank 0.7 264,000 347,050 266,151 347,050 2.3

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Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

Iraqi Investment Bank 0.27 250,000 529,802 221,409 529,802 1.5

Average 1.83
The National Bank of Iraq 0.34 250,000 524,948 437,918 524,948 1.9
Gulf Commercial Bank 0.19 300,000 578,337 358,438 578,337 1.7
2018 Iraqi Commercial Bank 0.47 250,000 443,946 309,351 443,946 1.9
Trans Iraq Commercial Bank 0.7 264,000 328,167 196,917 328,167 2.1
Iraqi Investment Bank 0.28 250,000 606,973 192,535 606,973 1.4
Average 1.85
The National Bank of Iraq 0.47 250,000 603,980 536,401 603,980 2
Gulf Commercial Bank 0.39 300,000 603,313 512,842 603,313 2
2017 Iraqi Commercial Bank 0.49 250,000 460,702 453,424 460,702 2.2
Trans Iraq Commercial Bank 0.7 264,000 351,929 340,947 351,929 2.4
Iraqi Investment Bank 0.42 250,000 573,706 540,169 573,706 2.1
Average 2.19
The National Bank of Iraq 0.41 250,000 580,415 493,263 580,415 2
Gulf Commercial Bank 0.45 300,000 802,022 735,290 802,022 2
2016 Iraqi Commercial Bank 0.48 250,000 423,819 418,934 423,819 2.2
Trans Iraq Commercial Bank 0.7 264,000 415,851 408,234 415,851 2.4
Iraqi Investment Bank 0.6 250,000 577,870 562,402 577,870 2.2
Average 2.21
The National Bank of Iraq 0.55 250,000 535,764 493,263 535,764 2.1
Gulf Commercial Bank 0.51 300,000 800,108 739,109 800,108 2.1
2015 Iraqi Commercial Bank 0.41 250,000 390,117 387,335 390,117 2.2
Trans Iraq Commercial Bank 0.7 264,000 379,963 356,955 379,963 2.4
Iraqi Investment Bank 0.68 250,000 550,025 533,445 550,025 2.2
Average 2.25
Source: Prepared by researchers

The cash value of the preferred shares will be excluded from the above equation because
the industrial companies listed in the market do not deal with the preferred shares, while the
other equation variables remain unchanged. From the analysis of the above table, the following
results are evident:
1- The value of Tobin's index reached in 2020 and 2019 the Trans-Iraq Commercial
Bank achieved the highest percentage, which amounted to (2.5) and (2.3) respectively,
and the Gulf Commercial Bank achieved the lowest percentage, which amounted to
(1.9) and (1.4) respectively, but in 2018 The Trans-Iraq Commercial Bank was ahead
of other banks in the research sample and achieved (2.1), and the Commercial
Investment Bank achieved the lowest percentage, which amounted to (1.4), in addition
to the Trans Iraq Commercial Bank achieved the highest percentage of (2.4) for the
years 2017, 2016 and 2015 and the Bank of the Bank came of Iraq and the Gulf
Commercial Bank with the lowest ratio of (2.0) for the years 2017 and 2016 and a ratio
of (2.1) for the year 2015.
2- The value of Tobin’s index is higher than (1) and this is a good indicator, as the
closer or more than one is true, this indicates that the value of the economic unit is at a
better level and with good performance.

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Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

3- The average of the research sample amounted to (2.17, 1.83, 1.85, 2.19, 2.21,
2.25) respectively for the years 2020, 2019, 2018, 2018, 2017, 2016 and 2015, where
we find that the lowest percentage was achieved in 2019 and the reason is due to the
exceptional circumstances that the country went through, which was reflected on the
movement of shares trading in the Iraqi Stock Exchange.
4- In order to find the relationship between the average closing price and the
average Tobin's index for the research sample, and Table (2) shows this:

Table (2) The relationship between the average closing price and the average Tobin's index for the research
sample.
the bank average closing price Tobin's average index
The National Bank of Iraq 0.55 2.01666667
Gulf Commercial Bank 0.36 1.85
Iraqi Commercial Bank 0.55 2.06666667
Trans Iraq Commercial Bank 0.84 2.35
Iraqi Investment Bank 0.5 1.9
correlation coefficient 0.973899652
Source: Prepared by researchers

From the analysis of Table (2), we find that the relationship between the average closing
price and the average Tobin's index for the research sample is a positive direct relationship,
which amounted to (0.973).
In the same context, the closing price was calculated on 12/31 for the years 2021, 2022,
2023 and through the use of the forecast function using the Excel program, and table (3)
illustrates this:

Table (3) Forecasts at closing price 12/31 for the years 2021, 2022, 2023 for the research sample

Source: Prepared by researchers

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 Al Dulaimi, J. A. A. B., kadhim, E. H. (2022)
Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

From the analysis of Table (3), it is clear that the National Bank of Iraq’s closing price
is unstable, as it decreased in 2016 to reach (0.41) and then rebounded for the following years.
As for golf Commercial Bank, the closing price witnessed a decrease, reaching (0.51, 0.45,
0.39, 0.14, 0.14, 0.14) for the years 2020, 2019, 2018, 2018, 2017, 2016 and 2015, respectively,
which was reflected in the expectations on the closing price for the years 2023,2022 2021,
where it amounted to (-0.008), (-0.094) and (-0.181), which requires the management of the
bank Taking a number of measures and changing the policies followed for the purpose of
avoiding the decline in the trading price, and in the same context, the Commercial Bank of Iraq
achieved the closing price for the years, the research sample witnessed non-volatile prices,
which affected the expectations for the closing price and amounted to (0.467, 0.470, 0.472) for
the years 2021, 2023, 2022, respectively, while the Trans-Iraq Commercial Bank had a fixed
closing price for all years of the research period and amounted to (0.7), in addition to the Iraqi
Investment Bank, the closing price being unstable and fluctuating between low and high.
In the same context, the closing price is one of the variables of the Tobin's index, and
any change in one of the variables will be reflected in the value of the Tobin's index. The
researcher used the forecast function in the Excel program to calculate the expectations for the
Tobin's index, and the table (4) shows this:

Table (4) Expectations of the value of Tobin's index for the years 2021, 2022, 2023 for the research sample
Tobin's computed index value Tobin's Index Value Predictions
bank
2015 2016 2017 2018 2019 2020 2021 2022 2023
The National Bank of
2.1 2 2 1.9 1.9 2.2
Iraq 2.027 2.029 2.032
Gulf Commercial Bank 2.1 2 2 1.7 1.4 1.9 1.54 1.451 1.363
Iraqi Commercial Bank 2.2 2.2 2.2 1.9 1.8 2.1 1.867 1.809 1.752
Trans Iraq Commercial
2.4 2.4 2.4 2.1 2.3 2.5
Bank 2.34 2.337 2.334
Iraqi Investment Bank 2.2 2.2 2.1 1.4 1.5 2 1.52 1.411 1.303
Source: Prepared by researchers

From the analysis of the above table, it is clear that the highest value of Tobin’s index
expectations achieved by the Trans-Iraq Commercial Bank amounted to (2.34), (2.337) and
(2.334) for the years 2021, 2022 and 2023, respectively, and the reason for the decline in the
value of the Tobin’s index expectations is due to (financial, political or economic conditions
As stock prices are more affected by external conditions, which is reflected on the market value
as well as the decline in profitability, as well as the results of the statistical analysis showed a
positive significant relationship and a clear effect between the disclosure of future financial
information and the market value of the economic units included in the research sample.

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 Al Dulaimi, J. A. A. B., kadhim, E. H. (2022)
Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

RESULTS
in setting strategic plans, disclosing the role of the council, setting programs for training
The necessity for the economic units listed in the capital markets to improve the level of
transparency in disclosure by disclosing all information related to their activities, whether they
are historical, current or future information. A periodic evaluation of the level of future
information disclosure should be undertaken in order to encourage economic units to disclose
information Publishing the results of the evaluation in bulletins and periodicals of the financial
market, as well as including them as additional indicators in the performance evaluation
process, which is a moral media support that has a significant impact on motivating the
management of economic units to pay attention and seek to expand the transparency of
disclosure of information in the financial statements.
Disclosure by economic units of their expected future plans in the coming years, their
expected sales and profits, and the expected stock price, which leads to increased transparency
of disclosure through the use of financial indicators and ratios that express this, which increases
investment opportunities in them.
Work to include in financial reports non-financial information, including voting and
meeting procedures for shareholders, disclosure of opportunities and risks to the economic unit,
disclosure of the intensity of competition in the economic sectors in the market, and transparent
disclosure of the extent to which employees are satisfied with whether it is about financial
satisfaction or the extent to which employees encourage creativity innovation and the extent of
their participation members, and disclosing these programmers.

CONCLUSIONS
According to the international research currents and professional propositions that paid
attention to future financial disclosure, it is possible to build an index for the disclosure of future
financial information by adopting the expectations of the Tobin's index. To reliable results in
decision-making, and by relying on Tobin's index for the purpose of expectations of future
performance and profitability, it provides an appropriate opportunity for investors to read future
trends for the performance and profitability of economic units and to modify investment
decisions. It became clear that there is a clear discrepancy in the value of the economic units in
the research sample, whose reasons are attributed to the discrepancy in the disclosure of future
financial information, as there is a positive relationship between the value of the Tobin’s index
and the transparency of the information disclosed in the financial statements and future
expectations, which is reflected in increased investment opportunities.

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 Al Dulaimi, J. A. A. B., kadhim, E. H. (2022)
Transparency of Information in the Financial Statements and the Extent to Which It Discloses the Future
Expectations of Economic Units Using the Tobin s Q Index

It was found that the average closing price of 12/31 for the research sample amounted
to (1.83) in the year 2019, which is the lowest percentage achieved and the reason is due to the
exceptional circumstances that the country has experienced, which was reflected in the
movement of shares trading in the Iraq Stock Exchange.

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