This study examines the extent to which the characteristics of the audit committee chair enhance the quality of financial reports and reduce the possibility for companies to receive a modified audit opinion (MAO) from an external auditor. We apply logistic regression to investigate the influence of Audit Committee Chair (ACC) characteristics on the FRQ (FRQ), for a sample of 460 firm-year observations (service and industrial company listed) on the Amman stock exchange for the years 2017–2020. This study uses the MAO as a proxy for Financial Reporting Quality (FRQ). The results of this study confirmed that the characteristics of the chair of the audit committee have significant and clear impacts on the quality and efficiency of financial reports, which is in line with previous studies that have addressed this topic. The results also indicated that researchers, academics, regulators, and policymakers should not look just at the characteristics of audit committees as a whole, given that audit committee chairs have effects on financial reports. This study presents its contribution through experimental demonstration of the characteristics of the chair of the audit committee and how these affect the financial reports of companies. It also provides a guide for benefits for working to provide a basis for organizational procedures, especially those related to the impact on corporate boards and internal and external auditing.

The Jordanian Corporate Governance Code (JCGC) was first enacted in 2004 and revised in 2017. It offers standards for ethical and decent practices in the corporates. Law in Jordan in 2009 has enforced the formation of an audit committee for all listed companies. Literature has substantiated that the audit committee characteristic (ACCs) impact the quality of financial reporting. This work investigates the role of ACCs in lessening the prospect of corporates in obtaining modified audit opinion in the context of Jordan. Four ACC problems (expertise, independent, meeting, and size) have been studied and the modified audit opinion. The total sample of 117 listed companies on the Amman Stock Exchange (ASE) was studied. The relationship between the modified audit opinions (dependent variable), and ACCs (expertise, independent, meeting, and size; as independent variables) was analyzed using logistic regression. The ACCs is projected to effectively improve the quality of financial reporting, and thus, decrease the prospect of corporate in obtaining modified audit opinion. The findings according to the listed companies from 2012 to 2017 in Jordan showed that audit committee (AC) expertise validates this likelihood. Lastly, there is no effect of AC independent, size, and the number of meetings held on the modified audit opinion. General, the findings have policy implications on enhancing corporate governance (CG) efficacy concerning the quality of financial reporting.

It is well established that ownership characteristics are impacted by the quality of financial reporting. The purpose of this work is to examine the role of ownership characteristics in minimising the prospect of corporates obtaining a modified audit opinion in Jordan. Three ownership characteristics [family ownership (FAOWN), institutional ownership (INOWN) and foreign ownership (FAOWN)] and modified audit opinion were studied. The study used 117 samples of corporates listed on the Amman Stock Exchange (ASE). Logistic regression was employed to analyse the association between the modified audit opinions as a dependent variable and ownership characteristics as independent variables. Ownership characteristics are anticipated to be more successful in improving the quality of financial statement, and thus, reduce the prospect of firm obtaining a modified audit opinion. The analysed results from 2012 to 2016 periods of these corporates in Jordan showed that FAOWN and FOOWN validated this projection. Interestingly, the effect of family and FOOWN improve the quality of financial statement, thereby, reduce the cases of a modified audit opinion. Additionally, the study could not find any association impact between the INOWN and modified audit opinion.