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Disclosure quality and earnings management: evidence from Jordan

Ebraheem Saleem Salem Alzoubi (Accounting Faculty, College of Business Administration, Abu Dhabi University, UAE and School of Accountancy, College of Business, Universiti Utara Malaysia, Sintok, Malaysia)

Accounting Research Journal

ISSN: 1030-9616

Publication date: 7 November 2016

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

Acknowledgements

The author gratefully acknowledges the helpful comments and suggestions received from the two anonymous reviewers. M. Azizul Islam and Liz Marsland provided excellent editorial support. All the remaining errors are the sole responsibility of the author.

Citation

Alzoubi, E. (2016), "Disclosure quality and earnings management: evidence from Jordan", Accounting Research Journal, Vol. 29 No. 4, pp. 429-456. https://doi.org/10.1108/ARJ-04-2014-0041

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Publisher

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Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

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