Disclosure quality and earnings management: evidence from Jordan

Ebraheem Saleem Salem Alzoubi

Accounting Research Journal, 2016, vol. 29, issue 4, 429-456

Abstract: Purpose - The purpose of this paper is to extend previous research by empirically investigating the effect of the disclosure quality (DQ) on the magnitude of the earnings management (EM) among Jordanian companies listed in Amman Stock Exchange. Design/methodology/approach - This study uses the cross-sectional version of the modified Jones model, where discretionary accruals are used for the EM proxy. Generalized least square regression is used to examine the influence of the DQ on EM for a sample of 86 industrial companies in the period of the years from 2007 to 2010. Findings - The result produces evidence on the negative association between DQ and EM. The result also evidences the view that as the level of the disclosure is high, the magnitude of the EM reduces and, in turn, increases the financial reporting quality. Originality/value - As there are relatively few researches conducted in this area specifically among Jordanian firms, the study broadens the scope by providing empirical evidence of the relationship between DQ and EM. This paper is the first empirical study to investigate the impact of the DQ on EM among Jordanian companies.

Keywords: Disclosure quality; Financial reporting quality; Earnings management (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:arjpps:arj-04-2014-0041

DOI: 10.1108/ARJ-04-2014-0041

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