Examining the quality of accounting information of Jordanian companies. The influence of earnings management and corporate governance on information readability
- Autores: Manar Al-Mohareb
- Directores de la Tesis: Herenia Gutiérrez Ponce (dir. tes.), Julián Chamizo González (dir. tes.)
- Lectura: En la Universidad Autónoma de Madrid ( España ) en 2024
- Idioma: inglés
- Número de páginas: 397
- Títulos paralelos:
- Examinando la calidad de la información contable de las empresas jordanas. La influencia de la gestión de los beneficios y el gobierno corporativo en la legibilidad de la información
- Tribunal Calificador de la Tesis: Emma García Meca (presid.), Rafael de Arce Borda (voc.)
- Programa de doctorado: Programa de Doctorado en Economía y Empresa por la Universidad Autónoma de Madrid
- Materias:
- Enlaces
- Tesis en acceso abierto en: Biblos-e Archivo
- Resumen
Abstract of Thesis This study examines how linguistic approaches affect accounting information quality, how opportunistic management and an ineffective board of directors use them to make disclosures less readable, how to reduce obfuscation in accounting information, and how corporate governance affects information readability. This research explores how these factors affect accounting disclosure clarity and transparency, particularly in developing countries like Jordan.
This research addressed research gaps regarding accounting disclosure readability and the mitigation of opportunistic behaviour. First, accounting literature lacks a thorough definition of readability, making it difficult to assess accounting disclosure clarity and transparency. It also found a lack of multidisciplinary methodologies like linguistics and communication science to construct a new theoretical framework for evaluating readability in accounting narratives. Second, it found a lack of plain writing rules for accounting disclosures in Spanish and Arabic and no consideration of language disparities in ethical norms. Third, because governance codes vary by country due to legal and market changes, there's a gap in understanding how corporate governance affects accounting disclosure readability, especially in developing countries like Jordan. Thus, this research addresses these shortcomings to provide insights into enhancing the clarity and transparency of accounting disclosures across different languages and business environments.
This research adopted an interdisciplinary approach that combined several methodologies from accounting, linguistics, and corporate governance. This approach allows us to study accounting disclosure readability and fill research gaps. First, a literature review was used to understand factors affecting the quality of accounting disclosures in Jordanian firms based on familiarity with legislation, disclosure adequacy, and industry. Then, the qualitative content analysis was used to answer research questions based on these criteria. Second, a thorough literature analysis was used to create a new theoretical framework for linguistic and communicative readability assessment. Third, linear and logistic regressions were used to assess accounting narrative readability in the UK, Spain, and Jordan across languages and business environments. Finally, this research proposed a unified corporate governance factor based on the board's characteristics to examine the moderation effect on the relationship between the company's performance and the chairman's statement's readability and evaluate governance code compliance using statistical tools like linear regression and the moderation effect. Therefore, this thorough methodology offers new insights into improving financial reporting clarity and transparency.
This research has several findings related to the quality of accounting disclosures. First, through qualitative content analysis, it was found that Jordanian companies are familiar with the legislation when preparing accounting disclosures in annual reports, but corporate governance rules are inadequate. Second, the new theoretical framework based on linguistic and communication perspectives identified the elements of the textual communication process that are most manipulated when preparing accounting disclosures by opportunistic management. Third, it was found that opportunistic management often exploits linguistic approaches to obscure accounting information derived from earnings management with language differences, affecting readability scores. Finally, it was confirmed that the board's characteristics significantly affect a chairman's statement's readability. These characteristics determine the board's compliance with corporate governance rules. Therefore, the ineffective board may also exploit linguistic approaches to make accounting disclosures in the chairman's statement less readable.
Although this research provided valuable insights, there are still areas for improvement that can be considered in future research. These improvements serve as signals for enhancing methodologies and exploring new aspects of future research. First, further investigation into the impact of linguistic approaches on accounting disclosures in different linguistic contexts. Second, examining the effectiveness of plain writing guidelines in improving the readability of accounting disclosures in languages other than English. Third, exploration of the relationship between corporate governance and the transparency of accounting information in different business environments.
This research has several implications for practice, whether for academia, stakeholders, or policymakers. This research urges academics to utilize an interdisciplinary approach to study readability, earnings management, and corporate governance in new business environments. For stakeholders, this research provides new insights into the possibility of obfuscation by using an unclear writing style that makes accounting disclosures less readable and calls on shareholders and investors to be careful when reading the accounting narratives. This research also urges policymakers to draft plain writing guidelines for accounting disclosures in languages other than English, such as Arabic and Spanish, to avoid obfuscation at any stage of the textual communication process, to create an ethical code of conduct that considers language differences when preparing accounting disclosures, and to establish funding initiatives that encourage governance research on readability to improve the quality and transparency of accounting information.