Direct and Mediated Associations among Audit Quality, Earnings Quality, and Share Price: The Case of Jordan

Afifa, Malik Abu; Alsufy, Fares; Abdallah, Ahmad Adel Jamil

doi:10.35808/ijeba/540

Cited by 13 publications

(21 citation statements)

References 46 publications

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“…This means that the sound managerial practices or behavior will lead to increase the company's performance. From the back drop, these findings are following empirical studies, such as Latif et al (2017), DeFond et al (2007, Wysocki (2005), Larson andResutek (2011), Leuz et al (2003), Dechow et al (2010), Antonio et al (2019) and Afifa et al (2020). These studies indicated that market return is positively affected by EQ, and it plays a vital role by increasing the market value of share prices.…”

Section: Discussionsupporting

confidence: 55%

“…Mehrani et al (2017) discussed that we can measure the EQ by earnings response coefficient, discretionary accruals, predictive value of earnings, conservatism, and real earnings management. Ali et al (2011), Jafari (2016, Alsufy et al (2020) and Afifa et al (2020) suggested that the cash approach uses EQ as a measurement. They documented that the closeness of the accounting profits and cash reflects a high quality, and this measurement was adopted in the current study.…”

Section: Measurements Of the Study Variablesmentioning

confidence: 99%

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Does Earnings Quality Affect Companies’ Performance? New Evidence from the Jordanian Market

Saleh¹,

Afifa²,

Alsufy³

2020

JAFEB

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This study aims to investigate the importance of earnings quality as a determinant of companies' performance. It provides some empirical evidences from an emerging market, specifically from the Jordanian market. This study developed an econometric model for the effect of earnings quality on the companies' performance using empirical evidence. The study employs a panel data analysis method by using a sample of all Jordanian industrial public shareholding companies listed on Amman Stock Exchange (ASE) during 2010-2018. The results reveal that Return on Assets (ROA), Return on Equity (ROE), and Earnings Per Share (EPS) as proxies of company's performance are affected by the earnings quality. This provides the importance of positive earnings quality that eventually influences the companies' performance. The results of this study suggest that the higher control level on the managers' behavior and its outcome will have an effect on earnings quality, and thus the company's performance increases. As well as, high relevance of accounting information will improve earnings quality, and thus earnings quality with the interaction factors of the company's environment work on improving performance. As a conclusion, this study can work as a reference to assist standard setters, security analysts, regulators and other accounting-information users in appraising relation between the earnings quality and companies' performance.

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Section: Discussionsupporting

confidence: 55%

Section: Measurements Of the Study Variablesmentioning

confidence: 99%

Does Earnings Quality Affect Companies’ Performance? New Evidence from the Jordanian Market

Saleh¹,

Afifa²,

Alsufy³

2020

JAFEB

Self Cite

View full text Add to dashboard Cite

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“…One of the most momentous tools used by a board of directors to supervise management activities and choices as regards financial reporting has long been renowned as auditor qualities (Abubakar et al, 2020;Bala et al, 2018;Ihsan et al, 2016). Earlier research on AAT and FRQ has yielded conflicting results (Hay, 2012;Trotman, 2013;Aswadi et al, 2014;Tepalagul & Lin, 2015;Kamolsakulchai, 2015;Lin et al, 2017;Ndubuisi & Ezechukwu, 2017;Badawy & Aly, 2018;Abubakar et al, 2020;Afifa et al, 2020;Akono, 2020;Suleiman et al, 2020). These mixed results could be attributable to variances in the setting and the procedures used in these investigations.…”

Section: Auditor Attributes and Financial Reporting Qualitymentioning

confidence: 99%

“…On the other hand, extraordinarily little evidence was set up between auditor size AS and FRQ (Hay, 2012;Umaru, 2014;Lin et al, 2017;Afifa et al, 2020), none-audit service fees NASF, (Mgbame, Izedonmi et al, 2012;Patrick et al, 2017;Ugwunta et al, 2018), suggesting more investigation is needed in this area of study. As a result, other attributes of auditors' such as auditor firm age, auditor tangibility, auditor responsiveness, auditor reliability, auditor assurance, auditor empathy and client financial health (Gaynor et al, 2016), need to be studied and re-evaluated further for better inspection of FRQ.…”

Section: Ejmssmentioning

confidence: 99%

“…This is because a mediator variable is an intermediate variable that denotes the useful instrument via which the explanatory variable can account for the explained variable (Baron & Kenny, 1986). When the explanatory variable is considered to influence the mediator, and the mediator, in turn, influences the result variable, a simple mediation model is assumed (Afifa et al, 2020). This means that changing the AAT causes a change in the ACs and changing the ACs causes a change in the FRQ.…”

Section: Mediating Effect Of Ac On the Connection Between Aat And Frqmentioning

confidence: 99%

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Mediating Effect of Audit Committee on the Connection Linking Auditor Attributes and Financial Reporting Quality: A Conceptual Framework

2022

EJMSS

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Earlier research has shown that auditor attributes (AAT) complementary functions regarding audit committee (ACs) are complicated and go beyond a straight relationship. This research's goal is to present a steady framework with the corresponding hypothesis and demonstrate the mediating influence of ACs on the connection involving AAT features and financial reporting quality (FRQ).To do so, we looked at the extant literature using conceptual approach on AAT, ACs, and FRQ and discovered that studies on AAT and FRQ had diverse outcomes. We also discovered there was minimal indication of non-audit service fees, industry experience, audit firm age, audit firm tangibility, responsiveness, reliability and assurance impacting FRQ.It was set up that more investigation is needed on the potential possible mediating effect of ACs on AAT and FRQ. Future research is needed to evaluate our proposed framework in greater depth empirically.

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Mediating impact of integrated reporting on audit quality and market reactions in Africa: evidence from South Africa

Bagonza,

Chen,

Rech

2024

ARJ

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Purpose The purpose of this study is to investigate the mediating impact of integrated reporting on the relationship between audit quality and market reactions in Africa using South Africa as a sample. Design/methodology/approach The study sample size consists of 119 firms listed on the Johannesburg Stock Exchange. The study was carried out for the period 2011–2019. Market reactions were proxy by share price and adjusted market returns. The authors controlled for the effects of market reactions by using other firm specifics like operating income, assets, leverage and return on assets and thereafter carried out robustness checks included under additional analysis. Findings Results from the study showed that integrated reporting partially mediates the relationship between audit quality and market reactions. Moreover, audit quality has a positive significant impact on market reactions in the form of the share price. The results were obtained in addition to a robustness check using adjusted market returns as a proxy for market reactions. Practical implications Regulators and standard setters in other countries should make integrated reporting mandatory. This study not only informs the public and investors about the organization’s business performance but also reveals auditor assurances that enchase market confidence in the company. Social implications Exploring the mediating impact of integrated reporting on the relationship between audit quality and market reactions yields valuable insights. Integrated reporting, which combines financial and non-financial information, influences how investors perceive and react to audit quality. Understanding this interplay could shed light on the broader implications for corporate transparency and accountability. Originality/value The authors are the first to conduct such a study in an emerging economy. Hence, the authors used integrated reporting as a new variable in the study of audit quality and market reactions. Furthermore, the authors used adjusted market returns under robustness checks to check if audit quality has an impact on market reactions.

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Direct and Mediated Associations among Audit Quality, Earnings Quality, and Share Price: The Case of Jordan

Cited by 13 publications

References 46 publications

Does Earnings Quality Affect Companies’ Performance? New Evidence from the Jordanian Market

Does Earnings Quality Affect Companies’ Performance? New Evidence from the Jordanian Market

Mediating Effect of Audit Committee on the Connection Linking Auditor Attributes and Financial Reporting Quality: A Conceptual Framework

Mediating impact of integrated reporting on audit quality and market reactions in Africa: evidence from South Africa

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