The Impact of Accounting Ethics on the Quality of Financial Reports: A Field Study of Commercial Banks Operating in the City of Derna

Abstract

This study aims to analyze the impact of accountants' ethics in its four dimensions (competence, independence, objectivity, and integrity) on the quality of financial reports in commercial banks in the city of Derna. The study adopted a descriptive analytical approach, and 197 questionnaires were distributed to accountants and employees in the financial departments, of which 140 valid questionnaires were retrieved for analysis. The study used a set of statistical methods, including Cronbach's alpha coefficient, Kolmogorov–Smirnov test, correlation coefficients, and simple and multiple regression. The results showed a high level of commitment to professional ethics and financial reporting quality in the banks under study, with independence ranking first, followed by objectivity, efficiency, and finally integrity. The results also showed statistically significant positive relationships between all dimensions of ethics and the quality of financial reporting, confirming that promoting ethical behavior contributes to improving the quality of banking reports. The regression models showed that each dimension of ethics has a significant effect on the quality of financial reports when analyzed individually, while the multiple regression showed that objectivity and integrity are the most influential within the overall model, and that the dimensions combined explain 13.4% of the variance in the quality of financial reports. Based on this, the main and sub-hypotheses were accepted. The study recommends promoting ethical compliance through continuous training, enforcing codes of conduct, developing accounting systems, and strengthening internal controls to enhance the reliability of financial reporting.