The article inspects the role of the external reports issued by the economic entities in rationalizing the economic decisions for the external users, financial reporting play important role through enhancing the effectiveness of financial markets and improves decision-making. Financial reports are essential for stakeholders by providing vital information regarding the financial position, performance, and cash flows of an economic entity, which enables better economic decisions. The authors tried to address the important aspects of both Quality of financial reports and rational economic decisions theoretically, and practically used questioners distributed on 120 Iraqi financial analysts and investors, and the results shows the highest financial reporting quality means better economic decisions or better rational decisions by the users, and the authors recommends addressing these aspects in future articles.