The Impact of Social Dimension Disclosure of Sustainability on the Value Relevance of Accounting Information: Corporate Governance as a Moderating Variable

Abstract

This study aims to analyze the impact of sustainability disclosure on the value relevance of accounting information in Iraqi banks listed on the Iraq Stock Exchange, with a particular focus on the moderating role of corporate governance mechanisms. The sample comprises 19 banks observed over the period 2014–2022. Sustainability disclosure is measured using two quantitative indicators: expenditure on training programs and the number of training sessions provided to employees. The value relevance of accounting information is assessed through the Ohlson model. Corporate governance mechanisms are represented by four structural indicators of the board: board size, ownership concentration, female representation, and the proportion of independent directors. The findings reveal that the number of training sessions exerts a positive indirect effect when interacting with all governance mechanisms, highlighting the significance of regular training within an effective governance structure. In contrast, training expenditure shows a limited effect, being associated only with female representation. The study recommends issuing a unified Iraqi accounting standard for sustainability disclosure, incorporating a clear definition of its environmental, social, economic, and governance dimensions.