Earnings Management Methods and their Impact on the Reliability of the Published Financial Statements of Jordanian Public Shareholding Companies
Publication Type
Original research

The study aimed to determine the extent to which managements of Jordanian public Shareholding companies practice earnings management methods, and the effects of that on the reliability of their published financial statements.

The researchers used the descriptive analytical methodology in order to obtain the needed data by surveying the views of the groups comprising the study’s population (financial intermediaries in the Amman Stock Exchange, credit officers, and external auditors) about the extent of the practice of earnings management. To do so, the researchers developed a questionnaire that covered the study’s variables and hypotheses, and analyzed the findings using descriptive statistics, one-way analysis of variance, and Scheffee’ test.

 The most significant findings included that all groups covered in the study agreed that earnings management methods are employed do have different effects on the reliability of published financial statements of Jordanian public Shareholding companies, with the most significant method being the use of fictitious transactions (considered fraud), and the least significant method being income smoothing.

The study recommended that regulatory and supervisory authorities (such as the Department of Supervising Companies, the Central Bank of Jordan, the Ministry of Industry and Trade, and the Securities Commission) ensure the activation of governance systems in Jordanian public listed companies, especially in the areas of maintaining independence of boards of directors and external auditors, and enhancing the supervision role of audit committees, in addition to sufficiently penalitize executive managers who commit malpractice of earnings management.

Journal of Irbid LiL-Buhooth Wal-Dirasat
the Deanship of Scientific Research
Publisher Country
Publication Type
Both (Printed and Online)