Search results

In different recent judgments, the Jordanian Court of Cassation, among many other Jordanian Courts, has found that a limited liability company's shareholder may be held liable in addition to the company itself as to claims related to the company's debits and different obligations. While the aforementioned approach does constitute a departure from the well-established former approach that the same Court has followed for a long period, the Court have unsurprisingly brought up different interpretations to the insufficient provisions that the Jordanian Companies' Law no. 22 of the year 1997 does contain pertaining this specific area of law. Accordingly, this paper aims to attempt to point out and critically examine the aforementioned Courts' decisions and law provisions to demonstrate the extent to which limited liability companies in Jordan are truly limited in liability and whether such Courts have pierced the corporate veil for adequate reasons.

To examine the extent to which limited liability companies in Jordan are truly limited in liability, this work uses the most relevant secondary data available in this relation as the main method to complete such examination and this shall include different interrelated law provisions, case law and jurisprudence. Through critically analyzing and comparing such data, this work will identify the problems connected to this specific area of law and accordingly proposes different recommendations and conclusions.

This work submits that the aforementioned Courts and Legislator have not dealt with such a matter in an adequate and comprehensive manner and that they should have addressed this area of law in a different and more specific way. Furthermore, this work argues that while the reasons behind the Courts' decisions shall be respected, the distinct characteristics that brought up limited liability companies into practice shall be also respected and left intact.

Taking into consideration the recent different approach followed by the Jordanian Courts to this specific area of law, and as far as the author is aware, it would not be surprising to say that there is no comprehensive and updated scholarly work which has either examined such an issue or addressed its implications from technical and legal standpoints. This paper receives its originality and value from being the first work that examines and addresses such important matter.

Purpose – The aim of the study is to contribute to a better understanding of activity-based costing (ABC) implementation systems in the context of a developing country such as Jordan. The main objectives of the study were to determine the extent of ABC implementation within the Jordanian industrial sector and identify the factors that facilitate and motivate the decision to implement ABC. Additional objectives include determining the problems associated with ABC implementation and assessing the degree of success of ABC implementation.

Design/methodology/approach – A questionnaire survey was conducted during 2008 among 88 Jordanian industrial companies that are listed on the Amman stock exchange. Eighty-eight questionnaires were distributed and 61 were returned giving a rate of response of 69.3%.

Findings – The survey findings indicate that ABC implementation among the Jordanian industrial companies is quite satisfactory. The rate of ABC implementation is about 55.7%. The most cited factors that facilitate the decision to implement ABC were that adequate training was provided for designing ABC and operating data in the information system are updated in real time: followed by the fact that adequate training was provided for using ABC. The most influential factors that motivate the process of ABC implementation are among others the increasing proportion of overhead costs, growing costs, including product costs and administrative costs, and currently the increasing number of product variants. Further factors are identified in the paper.

Originality/value – Most previous studies focused only on the implementation of ABC in western developed countries. The results of this study make a contribution to existing knowledge in the area of the implementation of ABC, especially in eastern developing countries such as Jordan. In addition, the current study used a multi-attribute to measure success of ABC implementation within the Jordanian industrial sector. This multi-attribute was composed of satisfaction with ABC implementation, the degree of using ABC in decision making and the success of ABC implementation.

The increasing impact of international competition and changing business environment has raised the important role of standardization, which was reflected in national standards. This paper presents the results of a study that provides insight into the role of Jordanian product standards in the local industry. The effect of companies’ characteristics on both the importance and satisfaction level with Jordanian Standards (JS), identifying reasons for using foreign standards and the need for new JS in manufacturing sectors were investigated. The findings revealed that there are no statistically significant differences in the way that Jordanian companies perceive the importance of having JS and the level of satisfaction or interest. Regardless of the company characteristics, it is concluded that targeted companies consider JS important to their business and JS are satisfying the companies’ interests. The surveyed Jordanian companies show a serious interest in foreign standards. However, the lack of familiarity with the existing JS in some small and medium enterprises and its benefit to their industry was observed.

This paper seeks to focus on the diffusion of activity‐based costing (ABC) in Jordan. A conceptual framework from general diffusion theory is adopted to describe the diffusion process within the Jordanian industrial sector. The main objective of the study is to determine the motivations for the implementation or non‐implementation of ABC.

Semi‐structured interviews were conducted with financial managers and heads of costing departments of companies within the Jordanian industrial sector. Both face‐to‐face and telephone interviews were used to achieve the research objective.

It was found that the rate of implementation of ABC in the Jordanian industrial sector follows the classical S‐shape. It is also suggested that the supply side of the diffusion process, most notably the role played by consultants, was an influence on many companies. This was not, however, a sufficient condition for companies to implement ABC.

Most previous studies focus on the implementation of ABC in Western developed countries. The results of this study make a contribution to existing knowledge in the area of the implementation of ABC, especially in Eastern developing countries such as Jordan. In addition, this research adds further evidence to the value of studying management accounting, and more specifically changes in management accounting practice. It describes the developments undertaken in the implementation of a new system and how a new system becomes accepted in practice.

The purpose of this paper is to examine the status of financial reporting on the internet by companies operating in an emerging economy, namely Jordan.

The paper surveys 127 companies listed in the first market of Amman Stock Exchange (ASE) for the year ended 2008/2009. The primary sources of the data used in this study are the global and the Jordanian electronic web sites. The paper employs descriptive statistics and nonparametric tests to explore the internet financial reporting (IFR) practices among Jordanian companies.

The results show that 87 Jordanian companies (69 percent) possess web sites with about 51 percent (44 of the 87) include financial reports and 32 out of 44 companies (about 73 percent) disseminate all their financial information on their web sites. The paper also finds that the extent of disclosure of the corporate financial and nonfinancial information on the ASE web site is statistically different form the companies’ web sites. Furthermore, the current paper reveals that some firm-specific characteristics such as firm size; financial leverage, age, and ownership concentration may distinguish those companies who engage in IFR from their counterparts. Finally, the results suggest that the financial sector is more advanced in terms of using the internet to disseminate information when compared to the industrial and services sectors.

In the context of Jordan, there is limited number of studies attempted to address corporate financial reporting on the internet. Therefore, the present study makes significant contribution to the existing body of knowledge by shedding more light on the status of financial disclosure on the internet by companies operating in an emerging economy like Jordan. Also, the current paper explores the extent of corporate information disclosed on both the official web site of ASE and companies’ web sites.

This study aims to investigate the influence of board independence on the level of corporate social responsibility (CSR) reporting in Jordan over time. The paper also compares this level of influence between the pre- and post-issuance of the Jordanian corporate governance code (JCGC) in 2009.

Longitudinal data (panel data) from all non-financial listed companies on the Amman stock exchange for the period 2006-2015 was collected and analysed. The content analysis method was used to assess the CSR reporting evident in the annual reports. An ordinary least square regression was used to investigate the relationship between board independence and the level of CSR reporting.

The results revealed that board independence has a positive and significant influence on the level of CSR reporting. This influence became significantly stronger post the issuance of the corporate governance code in Jordan. The findings suggest that the presence of independent directors on the board encourages companies to report additional CSR information as one of the legitimation strategies to manage the expectations of stakeholder groups.

This study provides motivation for regulators and companies to continue to improve board independence effectiveness.

The study supported evidence from prior studies, conducted the developed countries, that legitimacy theory is also applicable in Jordanian companies, which is a developing country. This study contributes to the debate and findings of the literature about governance and CSR reporting, specifically in the Middle East, as well as the potential of future studies in developing countries using a legitimacy theory as the basis for their investigations and motivation. This study provides evidence to motivate regulators and companies to improve, further, board independence effectiveness.

This empirical study has explored the potential influence of board independence on the level of CSR reporting in Jordan for JCGC pre- and post-issuance, which has not been examined previously and the findings for future studies in the Middle East region and other developing countries.

This paper seeks to examine the risk relevance of fair value income measures under IAS 39 and IAS 40.

The study sample comprises Jordanian insurance companies. Data were collected from two main sources: Jordanian insurance companies' annual reports, and the official website of the Amman Stock Exchange. The study begins by investigating the volatility of four income measures, calculated by including and excluding holding gains or losses of financial instruments and property investments. Then it examines the association between its four income volatility measures and one stock market‐based risk factor, in order to provide evidence on the risk‐related information content of each income volatility measure.

Income based on fair values reflects income volatility more than historical cost‐based income. It is also found that income is (not) more volatile with the recognition of unrealized fair value gains/losses on financial instruments (investment property). Results of assessing the relative explanatory power of income volatility measures suggest that not all fair value income volatility measures can be a good proxy of the total risk. On the contrary, none of our income volatility measures provides significant incremental risk‐relevant information for total risk.

Most prior studies have focused on the value relevance of fair value accounting in Western developed countries, and mainly in the banking sector. This study makes a significant contribution to existing knowledge via exploring the applications of fair value accounting by insurance companies and investigating the implications of mark‐to‐market on risk, instead of share price, in an emerging country – Jordan. The findings of this study are useful to researchers and capital‐market participants interested in explaining accounting and market risk measures.

The purpose of this paper is to explore corporate social responsibility (CSR) disclosure and its relation to institutional investor (INSV) of Jordanian private listed companies (PLCs).

A unique sample of 159 largest companies over “a period of 8-years” listed on the ASE in terms of market capitalisation during the 2005-2012 period. Testing of hypotheses has been conducted by applying multivariate regression techniques using longitudinal data analysis of companies’ annual reports.

Results which confirmed earlier estimations indicated that there are positive and significant relationships between CSR disclosure (CSRD) and INSV. This result indicates that among the CSRD dimensions, INSVs are less concerned with companies engaging in community contribution practices and those related to the community involvement and product dimension in which the company operates.

Jordanian PLCs should be encouraged to be involved in CSR activities as one of their program strategies in attracting investment, as well as to improve their reputation and image in their social activities.

This paper conducts a comprehensive empirical evidence on the development of the relationship between the CSRD dimensions and INSV in Jordanian PLCs as an emerging market, where much existing evidence exists on this issue that may help in explaining difference in prior work.

The purpose of this study is to look at the direct relationship between audit quality, earnings management (EM) practices and company performance, as well as the indirect influence (mediation) of EM practices in the relationship between audit quality and company performance. It offers empirical evidence from the Jordanian market, which is considered an emerging market.

The population of this study is represented in Jordanian service companies listed on the Amman Stock Exchange (ASE), with a total of 344 company-year observations. Furthermore, panel data analysis was used in this study, and data for the study were acquired from yearly reports as well as the ASE’s database.

Based on generalized method of moments model, the present findings demonstrate that the size of the audit firm and the tenure of the audit firm have a positive and negative influence on EM practices, respectively, but that industry-specialist audit firm has a negative and insignificant effect. EM practices have a negative impact on two company performance proxies (ROA and ROE), but have no effect on earnings per share (EPS). Furthermore, the size of the audit firm has a positive and significant influence on the performance proxies of the company [i.e. return on assets (ROA) and return on equity (ROE)]. The presence of an industry-specialist audit firm has a positive and significant influence on two proxies of company performance (ROE and EPS), but a negative and significant impact on ROA. An audit firm’s tenure has a negative and significant impact on two performance proxies (ROA and EPS), but a positive and significant impact on ROE. Then, EM practices either fully or partially mediate the relationship between audit quality proxies and company performance as assessed by ROA, ROE and EPS.

The current study’s limitation is that it only searched in Jordanian service companies listed on ASE from 2012 to 2019 to meet the study’s objectives; thus, the authors recommend that future work investigate the study model for other sectors, whether in Jordan or other emerging markets such as the Middle East and North Africa. Another limitation of this study is that the study models lack important variables, which may affect EM and company performance, such as corporate governance and ownership structure characteristics; as a result, the authors recommend that future work includes such variables in future research models to have more explanations in this context.

Analysts, investors and other strategic decision makers may use the findings of this study to improve the efficiency and efficacy of Jordan’s financial market. These findings will enhance policymakers’ willingness to establish appropriate regulations, which might improve Jordan’s financial market performance and efficacy. These findings may help investors make better judgments by using audit quality proxies and EM indicators, which can forecast business success.

First, this study distinguishes itself from prior studies through establishing a new research model, by investigating the mediating effect of EM in the relationship between audit quality and company performance. It provides empirical evidence from the Jordanian market; hence, it increases the body of the knowledge in this context. Second, to the best of the authors’ knowledge, this is the first study to look into the link between audit quality, EM and company performance together; hence, the model of this study is developed using agency theory and information asymmetry theory. Third, the current study adds new evidence to the role of audit quality and EM in companies, as well as how audit quality and EM practices affect company performance in emerging markets such as Jordan.

The purpose of this paper is to investigate the change of the Jordanian corporate reporting requirements in 1998. The reasons as to why International Financial Reporting Standards (IFRS) were adopted in Jordan are outlined on the basis of strong structuration theory’s (SST) quadripartite structure.

This study is interpretive, as perceptions of the study’s participants are analysed regarding the adoption of IFRS in emerging economies. Semi-structured interviews were undertaken to collect Jordanian experts’ perceptions. The study uses elements of Stones’ strong structuration to illustrate and analyse the current study’s data.

The analysis illustrated that various elements pushed for the adoption of IFRS in Jordan – external structures that cause adoption of IFRS are the Gulf War and the immediate impact this had on Jordan. The internal structures seek to adopt new regulation in order to protect and support the Jordanian economy, which is part of agents-in-focus’ dispositions, and gain foreign direct investment. Agents-in-focus found that some corporations comprehended the needs of external investors, thus, sought to provide such information voluntarily.

A limitation of this paper is the number of participants, which for future studies needs to be considered.

Reasons as to why new regulation is adopted are illustrated, which can support other countries seeking to do adopt new corporate reporting rules.

This study contributes to the sparse body of studies using SST in financial accounting. It is also one of the few studies investigating the change of regulation and the reasons for this adoption in the Middle Eastern and Jordanian context, in an interpretive study.