The trade-off between accrual-based and real earnings management: evidence from Jordan
by Mohammad Azzam; Alaa AlQudah; Lara Al-Haddad; Ayman Abu Haija
International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE), Vol. 17, No. 1/2, 2021

Abstract: This study examines the extent of accrual-based and real earnings management surrounding three important turning points in the Jordanian business environment. Using a sample of 1748 firm-year observations between 2002 and 2016, the results show that firms have a great tendency towards using discretionary accruals to alter their reported earnings compared with real manipulation. Indeed, the magnitude of accrual-based earnings manipulation is increased significantly in the aftermath of the issuance of listing requirements. Interestingly, accrual-based and real earnings management is decreased significantly with the passage of the corporate governance code. In relation to the Arab Spring era, no clear evidence appears that firms are engaged in earnings management to embellish their financial reports. The overall results suggest that the ability of managers to exercise their discretion over earnings depends on firms' attributes such as the quality of the governance system, regulatory requirements and the surrounding business and political environment.

Online publication date: Tue, 14-Sep-2021

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Accounting, Auditing and Performance Evaluation (IJAAPE):
Login with your Inderscience username and password:

    Username:        Password:         

Forgotten your password?


Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com