The Effect of Applying Balanced Scorecard on Earnings Quality among Banks Listed in Palestine Exchange
Publication Type
Original research


—This paper aims to verify the impact of applying balanced scorecard on earnings quality controlled by Firm (Bank) size of

banks listed on Palestine Exchange during the 2011–2019 period. To achieve this objective, a panel model relating to the dependent variable

(Earnings quality) and independent variables (Balanced Scorecard components) with the control variable (Firm Size) was estimated, the

researchers used financial reports and disclosures of the banks listed on the Palestine Stock Exchange as a tool to collect data, in addition

to books, articles, and the previous studies. Descriptive quantitative research design was employed because of the use of quantitative

data as proxies for both independent and dependent variables. Panel research strategy was applied for obtaining the cross sectional and

longitudinal dimensions. The relationships between the study variables (Earnings quality, BSC components, and Firm Size) were estimated

using Eviews version

7 (a statistical software). The results showed statistically significant negative effect of Customer perspective (CUS)

on Earnings Quality (EQ); statistically significant positive effect of Internal Business Process perspective (IBP) on Earnings Quality (EQ);

and statistically significant positive effect of Firm Size (FS) on Earnings Quality (EQ). In addition, the results showed no statistically

significant effect of financial perspective (FP), Social perspective (SP), Learning and Growth perspective (LG), and on Earnings Quality

(EQ). Furthermore, the results demonstrated that Earnings Quality of banks listed on Palestine Exchange was not high. Furthermore,

these banks did not utilize Balanced Scorecard (BSC). Banks need to rely on the consistency of balanced scorecard in its five perspectives

and not be limited to financial indicators. Furthermore, users of financial statements of Palestinian banks should not to rely exclusively

on the amount of net profit in the financial statements itself. In addition, the sources and components of net income should be identified,

especially in terms of its dimensions, actual flows, and receivables. Relevantly, auditing offices, and companies play a key role in limiting

the practice of earnings management or any manipulations that could mislead investor

سامح مؤيد لطفي العطعوط
An-Najah National University
Publisher Country
Publication Type
Prtinted only