Direct and Mediated Associations among Audit Quality, Earnings Quality, and Share Price: The Case of Jordan
Malik Abu Afifa,
Fares Alsufy and
International Journal of Economics & Business Administration (IJEBA), 2020, vol. VIII, issue 3, 500-516
Purpose: The current study aims to investigate the relationship between audit quality and the share price in Jordan as a developing market. Moreover, it also uses the role of earnings quality as a mediator factor in the study model. Design/Approach/Methodology: The study sample is comprised of all Jordanian industrial public shareholding companies listed in Amman Stock Exchange during the years 2010 to 2018. Therefore, this study uses a panel data analysis on financial disclosures. Findings: The study concluded that a high audit quality and a high earnings quality separately increase the share price. The earnings quality partially mediates the relationship between audit quality and the share price. It was also found that a high audit quality does not improve earnings quality of the targeted companies. Practical Implication: The findings can be used in efforts to: (i) identify the level of Jordanian market control over audit quality and earnings quality with evidence; (ii) provide more explanations on the importance of audit quality and quality of financial information in the biasness environment; (iii) the results of the this study will be more important for the investors, management, decisions makers, policy makers, and other interested parties; (iv) the findings of the study help the policy makers to adopt good regulations to improve the transparency in reporting the financial information that affects the share price. Originality/Value: The study is an original study and it adds to scholarly debate on effect of audit quality and earnings quality on the share price in Jordan as a developing market. It also uses the role of earnings quality as a mediator factor in the relationship between audit quality and the share price.
Keywords: Earnings management; earnings quality; audit quality; share price. (search for similar items in EconPapers)
JEL-codes: M21 M40 M41 N20 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ers:ijebaa:v:viii:y:2020:i:3:p:500-516
Access Statistics for this article
More articles in International Journal of Economics & Business Administration (IJEBA) from International Journal of Economics & Business Administration (IJEBA)
Bibliographic data for series maintained by Marios Agiomavritis ( this e-mail address is bad, please contact ).