The Effect of Managerial Overconfidence on the Relationship Between Accounting Prudence and Financial Reports Opacity

The study explores the interplay between accounting prudence, financial reports opacity, and managerial overconfidence in listed banks. Analyzing data from 17 Iraqi banks between 2010 and 2022 reveals a positive relationship between accounting prudence and financial reports opacity, suggesting that companies with stricter accounting practices may not necessarily prioritize complete transparency. Additionally, a positive correlation was found between opacity and managerial overconfidence, indicating that managerial overconfidence often coincided with less financial reports opacity. However, overconfidence did not directly influence the relationship between accounting prudence and opacity. The study recommends stricter legal regulations and an independent monitoring body to combat managerial opportunism and enhance disclosure quality in the Iraqi stock market.