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The Iraqi Kurdistan region has independent government organizations and an oil-based economy. Due to the nature of the activities in this climate, government organizations are always facing risks that, if not taken into account, will cause incomplete reporting. One of the new regulatory components emphasized by international economic and auditing institutions is internal controls based on possible risks(advanced), which will be improves the transparency of financial reporting due to the attention to theories based on accountability and organizational governance (corporate governance). after identifying the components of internal controls based on risk and transparency of financial reporting in previous articles and asking 5 people of experts for their opinions (Fuzzy Delphi method) the components were determined and a researcher-made questionnaire was prepared. 175 closed questionnaires were completed by the finance and budget employees of the Kurdistan region's government sector and then analyzed using the structural equation. The findings showed that internal financial controls based on possible risks have a significant effect on the transparency of financial reporting in the public sector of the Kurdistan Region of Iraq. Financial internal controls based on possible risks are a new approach of preventive controls that should be considered in accordance with the international standards of the Supreme Audit Institutions (INTOSAI). Considering the emphasis of international government auditing institutions on internal controls based on possible risks and various fluctuations that are always happening, the results of this research are valuable for increasing the transparency of government financial reporting and improving the auditing of regulatory institutions.

Subject and Purpose of the Article: 

The Kurdistan Region of Iraq is always facing financial corruption despite having high revenues from oil, customs and aid from other countries. One of the causes of corruption is the existence of possible events and risks that cause weak accountability and transparency. One of the main components of accountability is corporate governance, and one of the key components is advanced internal controls that can manage possible risks. The purpose of this research is to determine the effect of risk-based internal controls on the transparency of financial reporting in the public sector of the Kurdistan Region of Iraq.

For this purpose, after identifying the components of risk-based internal controls in the previous articles, 175 closed questionnaires were completed by the financial and budget employees of the public sector of the Kurdistan region and then analyzed with the structural equation technique in the SmartPLS software.

The findings showed that risk-based financial internal controls have a significant effect on the transparency of financial reporting in the public sector of the Kurdistan Region of Iraq.

Conclusion, Originality and its Contribution to the Knowledge:

 Risk-based internal controls with the risk management of government agencies increase the transparency of financial reporting and ultimately financial discipline. Nowadays, according to the fluctuations and risky events, organizations must establish risk-based internal controls in a completely dedicated manner for preventive measures in government institutions.