Corporate Governance and Earnings Management: Jordanian Evidence

By Suzan Abed, A. Al-Attar, M. Suwaidan. 2011

174 citations recorded by the source corpus.

This study examines the relationship between earnings management and characteristics of corporate governance mechanism for a sample of Jordanian non-financial firms during the period 2006-2009. Earnings management is measured by discretionary accruals using Jones models. The characteristics examined are the existence of independence members within the board of directors, the size of the board of directors, the role duality (CEO/chairman), the percentage of insider ownership. In addition, two controlled variables have been employed in this study: size of the company and financial leverage. The results of this study reveal that the size of board of directors is the only variable that has a significant relation with earnings management. The findings of this study have important policy implications since they support encouraging applying corporate governance principles in order to control the behaviors of the board of directors which may lead to distortion in reported financial annual reports. As a result, the reliability and transparency of reported financial statements may be enhanced.

Subfields: Accounting, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/73ae75750f7177944d6d9ecfcb1d661c461e48e5

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Qutaiba F. Hijazi
2. Lara Al-Haddad
3. Ayat S. Al-Rahahleh
4. Mark R. Whittington
5. Sinan S. Abbadi
6. A. Gerged

In Strategy and Management

1. Qutaiba F. Hijazi
2. Lara Al-Haddad
3. Ayat S. Al-Rahahleh
4. Mark R. Whittington
5. Sinan S. Abbadi
6. A. Gerged

Citations in the corpus

• Corporate Governance Quality and Earnings Management: Evidence from Jordan (2016, result): “This outcome agrees with the finding of other studies (Klein, 2002; Liu et al, 2013; Iraya et al., 2015; González & GarcíaMeca, 2014; Patrick et al., 2015; Ghosh et al., 2010; Abed et al., 2012).”
• The impact of corporate governance mechanisms on real and accrual earnings management practices: evidence from Jordan (2019, background): “In a Jordanian context there has been one study undertaken by Abed et al. (2012) which researched the role of independent directors in deterring AEM before the 2009 JCGC introduction, finding no significant relationship between board independence and AEM.”