Have the Companies Been Engaging in Earnings Management? Evidence from Jordanian Industrial Companies

Mo'taz Amin Al-Sa'eed, Khalid Erig Abu Riesheh


The purpose of this study is to examine whether the Jordanian Industrial Companies have engaged in earningsmanagement or not. The final sample of companies to be included was based on those companies that wereidentified across Amman Stock Exchange that are constantly report their earnings information due in regularbasis to be public-traded for the years (2005–2012), regarding operating income, cash flow, revenues, accountsreceivable, and assets is examined using the Modified Jones Model (1991) to separate discretionary andnon-discretionary accruals. The results of the data analysis indicate that the industrial companies are engaging insome earnings management as indicated by the statistical significance of the variables in the Modified JonesModel. Also; the results show that total accruals, revenues, and fixed assets were significant predictors ofdiscretionary accruals. Implications of the results and recommendations for academics and practitioners areprovided.

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DOI: http://dx.doi.org/10.5539/ijbm.v9n2p235

International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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