The Association Between Earnings Management and Capital Structure: An Empirical Study on Jordanian Firms Listed in Amman Stock Exchange

Al-Mohareb, Manar; Alkhalaileh, Mahmoud

doi:10.32479/ijefi.8583

Cited by 10 publications

(4 citation statements)

References 15 publications

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“…The study population consists of all the Jordanian industrial shareholding companies registered in the Amman Stock Exchange which count (54) company (Al-Mohareb & Alkhalaileh, 2019). The researchers adopted a sample random technique because of the large population.…”

Section: Methodsmentioning

confidence: 99%

The Mediating Effect of External Audit Quality on the Relationship Between Corporate Governance and Creative Accounting

Al-Olimat

Shbail

2020

IJFR

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The study aimed to examine the impact of corporate governance in limiting creative accounting practices mediating by the quality of external audits in Jordanian industrial public shareholding companies. The analysis in this research was to follow some of the analysis techniques namely; validity, reliability, and multiple regression were used in order to achieve the objectives of the study, The study population consisted of all Jordanian industrial public shareholding companies registered in the Amman Stock Exchange for the year 2019, and due to the large size of the study population, the researchers applied the s sample random technique representing the population where valid questionnaires reached statistical analysis (120) a questionnaire that included; financial managers and heads of accounting and audit departments. The study concluded that there is a statistically significant effect of the quality of external auditing and the principles of institutional governance in limiting creative accounting practices in Jordanian industrial companies, and in light of these results, the study recommended that industrial companies exploit the positive complementary relationship between the quality of external auditing and the principles of institutional governance to reach the common goal to reduce creative accounting practices.

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Section: Methodsmentioning

confidence: 99%

The Mediating Effect of External Audit Quality on the Relationship Between Corporate Governance and Creative Accounting

Al-Olimat

Shbail

2020

IJFR

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“…debt. An early study by Al-Mohareb & Alkhalaileh (2019) reported an average leverage of 30% for Jordanian firms.…”

Section: Descriptive Statisticsmentioning

confidence: 99%

The Impact of Financial Crisis on Earnings Management Activities: Evidence from Jordan

Shana’a¹,

AlKhalaileh²,

Rumman³

2023

JJBA

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This study examined empirically the earnings management practices of Jordanian firms during the financial crisis. The study used a sample of 568 observations (firm-year) related to 71 non-financial firms listed in Amman Stock Exchange (ASE) over the 8-year period (2005-2012). Correlation and OLS regression analyses are used to test the study's predictions. The study reports a negative, but statistically insignificant, association between earnings management activities and the financial crisis. This result does not provide sufficient support for the study’s predictions and most prior studies’ findings which report a decrease in earning-management practices during the financial crisis. Consistent with most prior related studies, the study findings indicate that firm’s size and CFO are inversely related to earnings management activities, while leverage is positively related to earnings management. Failure to detect a significant relationship between the financial crisis and earnings management activities by this study could be primarily due to the minimal impact of the finical crisis on Jordanian firms compared to firms operating in well-developed economics documented by prior studies. The study’s findings could be useful for policy makers, regulators, managers, investors and other capital providers within the Jordanian environment.

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“…Numerous studies tried to link earnings management to a different set of explanatory variables, they have shown wide set of variables for earnings management determinants, incentives and constraints, such as firm performance, dividends policy, surplus free cash flow, ownership structure, managerial ownership, board of director's characteristics, audit committee characteristics, corporate governance mechanisms, Chief Executive Officer role duality, investor protection, voluntary disclosure, among others (see for example, Jensen, 1993;Yermack, 1996;Peasnell et al, 2000;Klein, 2000;Xie et al, 2003;Bedard et al, 2004;Abbott et al, 2004;Yang & Krishnan, 2005;Lin et al, 2006;Naveen et al, 2007;Lin & Hwang, 2010;Al-Fayoumi et al, 2010;Ghosh et al, 2010;Azzoz & Khamees, 2016;Abbadi et al, 2016;Al-Mohareb &Alkhalaileh, 2019 andDayak &Al-Mughrabi, 2020). As a result of the global financial crisis, the interest of studying earnings management has been increased lately.…”

Section: Related Literaturementioning

confidence: 99%

The Impact of Financial Crisis on Earnings Management in Nonfinancial Listed Firms: Evidence from Jordan

Al-Mughrabi¹

2020

IJBM

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This paper studies earnings management in Jordan during the global financial crisis. It addresses mainly the question of whether or not financial crisis has an impact on discretionary accruals, using the modified Jones model (1995) for estimating discretionary accruals. By applying Ordinary Least Squares regression model on a sample of 71 nonfinancial listed firms during the period of 2005-2012, I find a conclusive evidence that Jordanian nonfinancial listed firms did not engage in a greater level of earnings management during the financial crisis period. In addition, larger firms are less involved in earnings management practices compared to smaller firms. Moreover, the results suggest a negative significant impact of operating cash flow on discretionary accruals, while it fails to connect current year losses with discretionary accruals. However, the findings indicate that firm’s leverage is positively and significantly associated with discretionary accruals. Overall, the empirical results provided evidence that earnings management practices in Jordanian nonfinancial sectors are relatively small, even smaller in services sector, which raise questions about the validity of the modified Jones model and whether or not different models (such as Deangelo, 1986) should be used in future studies regarding earnings management.

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The Association Between Earnings Management and Capital Structure: An Empirical Study on Jordanian Firms Listed in Amman Stock Exchange

Cited by 10 publications

References 15 publications

The Mediating Effect of External Audit Quality on the Relationship Between Corporate Governance and Creative Accounting

The Mediating Effect of External Audit Quality on the Relationship Between Corporate Governance and Creative Accounting

The Impact of Financial Crisis on Earnings Management Activities: Evidence from Jordan

The Impact of Financial Crisis on Earnings Management in Nonfinancial Listed Firms: Evidence from Jordan

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