Impact of Audit Committee Effectiveness on Accrual and Real Earnings Management among Jordanian Listed Firms: Conceptual Paper

Abbott, L. J., Park, Y., & Parker, S. (2000). The effects of audit committee activity and independence on corporate fraud. Managerial Finance, 26(11), 55-68. doi:https://doi.org/10.1108/03074350010766990
Abbott, L. J., Parker, S., & Peters, G. F. (2002). Audit committee characteristics and financial misstatement: A study of the efficacy of certain blue ribbon committee recommendations. doi:http://dx.doi.org/10.2139/ssrn.319125
Abbott, L. J., Parker, S., & Peters, G. F. (2004). Audit committee characteristics and restatements. Auditing: A journal of practice & Theory, 23(1), 69-87. doi:https://doi.org/10.2308/aud.2004.23.1.69
Abbott, L. J., Parker, S., Peters, G. F., & Raghunandan, K. (2003). The association between audit committee characteristics and audit fees. Auditing: A journal of practice & Theory, 22(2), 17-32. doi:https://doi.org/10.2308/aud.2003.22.2.17
Agrawal, A., & Chadha, S. (2005). Corporate governance and accounting scandals. The Journal of Law and Economics, 48(2), 371-406. doi:https://doi.org/10.1086/430808
Agyei-Mensah, B. K. (2021). The impact of board characteristics on corporate investment decisions: an empirical study. Corporate Governance: The International Journal of Business in Society, 21(4), 569-586. doi:https://doi.org/10.1108/CG-04-2020-0125
AICPA, & POB. (1993). Special Report by the Public Oversight Board of the SEC Practice Section, AICPA: Issues Confronting the Accounting Profession: Litigation, Self-regulation, Standards, Public Confidence, Professional Practice: Public Oversight Board.
Al-Rassas, A. H., & Kamardin, H. (2016). Earnings quality and audit attributes in high concentrated ownership market. Corporate Governance: The International Journal of Business in Society, 16(2), 377-399. doi:https://doi.org/10.1108/CG-08-2015-0110
Al?Nohood, S., Abdul Hamid, M. A., & Abdul Latiff, A. R. (2024). Impact of Board of Directors’ Characteristics on Accrual and Real Earnings Management among Jordanian Listed Firms: Conceptual Paper. International Journal of Academic Research in Accounting, Finance and Management Sciences, 14(1), 455-471. doi:http://dx.doi.org/10.6007/IJARAFMS/v14-i1/20855
Al Lawati, H. M. A., & Hussainey, K. (2021). The impact of audit committee financial expertise on corporate financial decisions. Corporate Ownership & Control, 18(3), 348-359. doi:https://doi.org/10.22495/cocv18i3siart9
Alhadab, M., Abdullatif, M., & Mansour, I. (2020). Related party transactions and earnings management in Jordan: the role of ownership structure. Journal of Financial Reporting and Accounting, 18(3), 505-531. doi:https://doi.org/10.1108/JFRA-01-2019-0014
Ali, M. H., & Meah, M. R. (2021). Factors of audit committee independence: An empirical study from an emerging economy. Cogent Business & Management, 8(1), 1888678. doi:https://doi.org/10.1080/23311975.2021.1888678
Ali, S., Rehman, R. U., Sarwar, B., Shoukat, A., & Farooq, M. (2022). Board financial expertise and foreign institutional investment: the moderating role of ownership concentration. Review of International Business and Strategy, 32(3), 325-345. doi:https://doi.org/10.1108/RIBS-02-2021-0032
Almasria, N. A. (2022). Corporate Governance and the Quality of Audit Process: An Exploratory Analysis Considering Internal Audit, Audit Committee and Board of Directors. European Journal of Business and Management Research, 7(1), 78-99. doi:https://doi.org/10.24018/ejbmr.2022.7.1.1210
Alzoubi, E. S. S. (2019). Audit committee, internal audit function and earnings management: evidence from Jordan. Meditari Accountancy Research, 27(1), 72-90. doi:https://doi.org/10.1108/MEDAR-06-2017-0160
Anderson, R. C., Mansi, S. A., & Reeb, D. M. (2004). Board characteristics, accounting report integrity, and the cost of debt. Journal of accounting and Economics, 37(3), 315-342. doi:https://doi.org/10.1016/j.jacceco.2004.01.004
Archambeault, D. S., DeZoort, T., & Hermanson, D. R. (2008). Audit committee incentive compensation and accounting restatements. Contemporary Accounting Research, 25(4), 965-992. doi:https://doi.org/10.1506/car.25.4.1
Arens, A. A., Beasley, M. S., & Elder, R. (2017). Auditing and assurance services: an integrated approach: Pearson Education.
Ascioglu, A., Hegde, S. P., Krishnan, G. V., & McDermott, J. B. (2012). Earnings management and market liquidity. Review of Quantitative Finance and Accounting, 38(2), 257-274. doi:https://doi.org/10.1007/s11156-010-0225-9
Beasley, M. S. (1996). An empirical analysis of the relation between the board of director composition and financial statement fraud. The Accounting Review, 71(4), 443-465. doi: Available at jstor: https://www.jstor.org/stable/248566
Beasley, M. S., Carcello, J. V., Hermanson, D. R., & Lapides, P. D. (2000). Fraudulent financial reporting: Consideration of industry traits and corporate governance mechanisms. Accounting Horizons, 14(4), 441-454. doi:https://doi.org/10.2308/acch.2000.14.4.441
Beasley, M. S., & Salterio, S. E. (2001). The relationship between board characteristics and voluntary improvements in audit committee composition and experience. Contemporary Accounting Research, 18(4), 539-570. doi:https://doi.org/10.1506/RM1J-A0YM-3VMV-TAMV
Bédard, J., Chtourou, S. M., & Courteau, L. (2004). The effect of audit committee expertise, independence, and activity on aggressive earnings management. Auditing: A journal of practice & Theory, 23(2), 13-35. doi:https://doi.org/10.2308/aud.2004.23.2.13
Bradbury, M., Mak, Y. T., & Tan, S. (2006). Board characteristics, audit committee characteristics and abnormal accruals. Pacific Accounting Review, 18(2), 47-68. doi:https://doi.org/10.1108/01140580610732813
BRC. (1999). Report and Recommendations of the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees. Retrieved from https://www.jstor.org/stable/40687877
Chen, J., Duh, R. R., & Shiue, F. N. (2008). The effect of audit committees on earnings–return association: Evidence from foreign registrants in the United States. Corporate Governance: An International Review, 16(1), 32-40. doi:https://doi.org/10.1111/j.1467-8683.2008.00660.x
Chen, J. J., & Zhang, H. (2014). The impact of the corporate governance code on earnings management–Evidence from Chinese listed companies. European Financial Management, 20(3), 596-632. doi:https://doi.org/10.1111/j.1468-036X.2012.00648.x
Choi, S., Han, J., Jung, T., & Song, B. (2020). Audit committee members with CEO experience and the value of cash holdings. Managerial Auditing Journal, 35(7), 897-926. doi:https://doi.org/10.1108/MAJ-04-2019-2269
Cohen, D., Dey, A., & Lys, T. Z. (2008). Real and accrual?based earnings management in the pre?and post?Sarbanes?Oxley periods. The Accounting Review, 83(3), 757-787. doi:https://doi.org/10.2308/accr.2008.83.3.757
Davidson III, W. N., Xie, B., & Xu, W. (2004). Market reaction to voluntary announcements of audit committee appointments: The effect of financial expertise. Journal of Accounting and Public Policy, 23(4), 279-293. doi:https://doi.org/10.1016/j.jaccpubpol.2004.06.001
Davidson, R., Goodwin?Stewart, J., & Kent, P. (2005). Internal governance structures and earnings management. Accounting & Finance, 45(2), 241-267. doi:https://doi.org/10.1111/j.1467-629x.2004.00132.x
Dey, A. (2008). Corporate governance and agency conflicts. Journal of Accounting Research, 46(5), 1143-1181. doi:https://doi.org/10.1111/j.1475-679X.2008.00301.x
DeZoort, T. (1998). An analysis of experience effects on audit committee members' oversight judgments. Accounting, Organizations and Society, 23(1), 1-21. doi:https://doi.org/10.1016/S0361-3682(97)00029-9
DeZoort, T., Hermanson, D. R., Archambeault, D. S., & Reed, S. A. (2002). Audit committee effectiveness: A synthesis of the empirical audit committee literature. Journal of Accounting Literature, 21, 38-75.
DeZoort, T., & Salterio, S. E. (2001). The effects of corporate governance experience and financial?reporting and audit knowledge on audit committee members' judgments. Auditing: A journal of practice & Theory, 20(2), 31-47. doi:https://doi.org/10.2308/aud.2001.20.2.31
Eklemet, I., Mohammed, I., Gyamera, E., & Twumwaah, D. A. (2023). Do Audit Committees and Corporate Governance Mechanisms Affect the Bank’s Performance? Empirical Evidence from Panel Data Analysis. Theoretical Economics Letters, 13(4), 1036-1059. doi:https://doi.org/10.4236/tel.2023.134057
Fama, E. F., & Jensen, M. C. (1983). Agency problems and residual claims. The Journal of Law and Economics, 26(2), 327-349. doi: Available at jstor: https://www.jstor.org/stable/725105
Fields, M. A., & Keys, P. Y. (2003). The emergence of corporate governance from Wall St. to Main St.: Outside directors, board diversity, earnings management, and managerial incentives to bear risk. Financial review, 38(1), 1-24. doi:https://doi.org/10.1111/1540-6288.00032
Ghosh, A., Marra, A., & Moon, D. (2010). Corporate boards, audit committees, and earnings management: pre?and post?SOX evidence. Journal of Business Finance & Accounting, 37(9?10), 1145-1176. doi:https://doi.org/10.1111/j.1468-5957.2010.02218.x
Ha, H. H. (2022). Audit committee characteristics and corporate governance disclosure: evidence from Vietnam listed companies. Cogent Business & Management, 9(1), 2119827. doi:https://doi.org/10.1080/23311975.2022.2119827
He, L., Labelle, R., Piot, C., & Thornton, D. B. (2009). Board monitoring, audit committee effectiveness, and financial reporting quality: Review and synthesis of empirical evidence. Journal of Forensic & Investigative Accounting, 1(2). doi: Available at SSRN: https://ssrn.com/abstract=1159453
Healy, P. M., & Wahlen, J. M. (1999). A review of the earnings management literature and its implications for standard setting. Accounting Horizons, 13(4), 365-383. doi:https://doi.org/10.2308/acch.1999.13.4.365
Hillman, A. J., & Dalziel, T. (2003). Boards of directors and firm performance: Integrating agency and resource dependence perspectives. Academy of management review, 28(3), 383-396. doi:https://doi.org/10.5465/amr.2003.10196729
Huang, P., Louwers, T. J., Moffitt, J. S., & Zhang, Y. (2008). Ethical management, corporate governance, and abnormal accruals. Journal of Business Ethics, 83(3), 469-487. doi:https://doi.org/10.1007/s10551-007-9632-9
IASB. (2018). Conceptual Framework for Financial Reporting. Retrieved from https://www.ifrs.org/issued-standards/list-of-standards/conceptual-framework/
Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance, 48(3), 831-880. doi:https://doi.org/10.1111/j.1540-6261.1993.tb04022.x
Jonas, G. J., & Blanchet, J. (2000). Assessing quality of financial reporting. Accounting Horizons, 14(3), 353–363. doi:https://doi.org/10.2308/acch.2000.14.3.353
Kalbers, L. P., & Fogarty, T. J. (1993). Audit committee effectiveness: An empirical investigation of the contribution of power. Auditing: A journal of practice & Theory, 12(1), 24.
Klein, A. (2002). Audit committee, board of director characteristics, and earnings management. Journal of accounting and Economics, 33(3), 375-400. doi:https://doi.org/10.1016/S0165-4101(02)00059-9
Krishnan, G., & Visvanathan, G. (2008). Does the SOX Definition of an Accounting Expert Matter? The Association between Audit Committee Directors' Accounting Expertise and Accounting Conservatism. Contemporary Accounting Research, 25(3), 827-858. doi:http://dx.doi.org/10.2139/ssrn.866884
Krishnan, J. (2005). Audit committee quality and internal control: An empirical analysis. The Accounting Review, 80(2), 649-675. doi:https://doi.org/10.2308/accr.2005.80.2.649
Krishnan, J., Wen, Y., & Zhao, W. (2011). Legal expertise on corporate audit committees and financial reporting quality. The Accounting Review, 86(6), 2099-2130. doi:https://doi.org/10.2308/accr-10135
Levitt, A. (1999). An Essential Next Step in the Evolution of Corporate Governance. Retrieved from https://www.sec.gov/news/speech/speecharchive/1999/spch289.htm
Lin, P. T., Hutchinson, M. R., & Percy, M. (2009). The role of the audit committee and institutional investors in constraining earnings management: evidence from Chinese firms listed in Hong Kong. Paper presented at the Accounting & Finance Association of Australia & New Zealand Annual Conference.
Liu, Q., & Lu, Z. J. (2007). Corporate governance and earnings management in the Chinese listed companies: A tunneling perspective. Journal of Corporate Finance, 13(5), 881-906. doi:https://doi.org/10.1016/j.jcorpfin.2007.07.003
Mansour, M., Al Amosh, H., Alodat, A. Y., Khatib, S. F., & Saleh, M. W. (2022). The relationship between corporate governance quality and firm performance: The moderating role of capital structure. Sustainability, 14(17), 10525. doi:https://doi.org/10.3390/su141710525
Mansour, M., Al Zobi, M. t., Saleh, M. W., Al?Nohood, S., & Marei, A. (2024). The board gender composition and cost of debt: Empirical evidence from Jordan. Business Strategy & Development, 7(1), e300. doi:https://doi.org/10.1002/bsd2.300
Mansour, M., Hashim, H. A., Almaqtari, F. A., & Al-ahdal, W. M. (2023). A review of the influence of capital structure on the relationship between corporate governance and firm performance. International Journal of Procurement Management, 17(1), 79-105. doi:https://dx.doi.org/10.1504/IJPM.2021.10047744
Mansour, M., Hashim, H. A., Salleh, Z., Al-ahdal, W. M., Almaqtari, F. A., & Abdulsalam Qamhan, M. (2022). Governance practices and corporate performance: Assessing the competence of principal-based guidelines. Cogent Business & Management, 9(1), 2105570. doi:https://doi.org/10.1080/23311975.2022.2105570
McMullen, D. A., & Raghunandan, K. (1996). Enhancing audit committee effectiveness. Journal of Accountancy, 182(2), 79.
Menon, K., & Williams, J. D. (1994). The use of audit committees for monitoring. Journal of Accounting and Public Policy, 13(2), 121-139. doi:https://doi.org/10.1016/0278-4254(94)90016-7
Mohammad, W. M. W., Wasiuzzaman, S., & Salleh, N. M. Z. N. (2016). Board and audit committee effectiveness, ethnic diversification and earnings management: a study of the Malaysian manufacturing sector. Corporate Governance: The International Journal of Business in Society, 16(4), 726-746. doi:https://doi.org/10.1108/CG-06-2015-0085
Naheed, R., Rizwan, S., Jawad, M., & Naz, M. (2022). The role of the boards’ financial expertise in the investment dynamics of businesses in emerging markets. Cogent Business & Management, 9(1), 1-21. doi:https://doi.org/10.1080/23311975.2022.2096804
Naiker, V., & Sharma, D. S. (2009). Former audit partners on the audit committee and internal control deficiencies. The Accounting Review, 84(2), 559-587.
doi:https://doi.org/10.2308/accr.2009.84.2.559
Namakavarani, O. M., Daryaei, A. A., Askarany, D., & Askary, S. (2021). Audit committee characteristics and quality of financial information: The role of the internal information environment and political connections. Journal of Risk and Financial Management, 14(6), 273. doi:https://doi.org/10.3390/jrfm14060273
Nelson, S. P., & Devi, S. (2013). Audit committee experts and earnings quality. Corporate Governance: The International Journal of Business in Society, 13(4), 335-351. doi:https://doi.org/10.1108/CG-02-2011-0009
Okyere, S. A., Fiador, V., & Sarpong?Kumankoma, E. (2021). Earnings management, capital structure, and the role of corporate governance: Evidence from sub?Saharan Africa. Managerial and Decision Economics. doi:https://doi.org/10.1002/mde.3324
Osma, B. G., & Noguer, B. G. d. A. (2007). The effect of the board composition and its monitoring committees on earnings management: Evidence from Spain. Corporate Governance: An International Review, 15(6), 1413-1428.
doi:https://doi.org/10.1111/j.1467-8683.2007.00654.x
Park, Y. W., & Shin, H.-H. (2004). Board composition and earnings management in Canada. Journal of Corporate Finance, 10(3), 431-457. doi:https://doi.org/10.1016/S0929-1199(03)00025-7
Pathak, S., Samba, C., & Li, M. (2021). Audit committee diversity and financial restatements. Journal of Management & Governance, 25, 899-931.
doi:https://doi.org/10.1007/s10997-020-09548-4
Peasnell, K. V., Pope, P. F., & Young, S. (2005). Board monitoring and earnings management: do outside directors influence abnormal accruals? Journal of Business Finance & Accounting, 32(7?8), 1311-1346. doi:https://doi.org/10.1111/j.0306-686X.2005.00630.x
Qamhan, M. A., Haat, M. H. C., Hashim, H. A., & Salleh, Z. (2018). Earnings management: do attendance and changes of audit committee members matter? Managerial Auditing Journal, 33(8/9), 760-778. doi:https://doi.org/10.1108/MAJ-05-2017-1560
Raghunandan, K., Rama, D. V., & Read, W. J. (2001). Audit committee composition,“gray directors,” and interaction with internal auditing. Accounting Horizons, 15(2), 105-118. doi:https://doi.org/10.2308/acch.2001.15.2.105
Roychowdhury, S. (2006). Earnings management through real activities manipulation. Journal of accounting and Economics, 42(3), 335-370.
doi:https://doi.org/10.1016/j.jacceco.2006.01.002
Saeed, A., Ali, Q., Riaz, H., & Khan, M. A. (2022). Audit committee independence and auditor reporting for financially distressed companies: evidence from an emerging economy. SAGE Open, 12(2), 21582440221089951.
doi:https://doi.org/10.1177/21582440221089951
Saleh, M. W., & Mansour, M. (2024). Is audit committee busyness associated with earnings management? The moderating role of foreign ownership. Accounting Research Journal, 37(1), 80-97. doi:https://doi.org/10.1108/ARJ-04-2023-0106
Sarens, G., De Beelde, I., & Everaert, P. (2009). Internal audit: A comfort provider to the audit committee. The British Accounting Review, 41(2), 90-106.
doi:https://doi.org/10.1016/j.bar.2009.02.002
Schipper, K. (1989). Earnings management. Accounting Horizons, 3(4), 91.
Schipper, K., & Vincent, L. (2003). Earnings quality. Accounting Horizons, 17, 97-110. doi:https://doi.org/10.2308/acch.2003.17.s-1.97
Sharma, V. D., & Kuang, C. (2014). Voluntary Audit Committee Characteristics, Incentives, and Aggressive Earnings Management: Evidence from New Zealand. International Journal of Auditing, 18(1), 76-89. doi:https://doi.org/10.1111/ijau.12013
Sharma, V. D., Sharma, D. S., & Ananthanarayanan, U. (2011). Client importance and earnings management: The moderating role of audit committees. Auditing: A journal of practice & Theory, 30(3), 125-156. doi:https://doi.org/10.2308/ajpt-10111
Uadiale, O. M. (2012). Earnings management and corporate governance in Nigeria. Research journal of finance and accounting, 3(3), 1-10.
Vafeas, N. (1999). Board meeting frequency and firm performance. Journal of Financial Economics, 53(1), 113-142. doi:https://doi.org/10.1016/S0304-405X(99)00018-5
Xie, B., Davidson III, W. N., & DaDalt, P. J. (2003). Earnings management and corporate governance: the role of the board and the audit committee. Journal of Corporate Finance, 9(3), 295-316. doi:https://doi.org/10.1016/S0929-1199(02)00006-8
Yang, J. S., & Krishnan, J. (2005). Audit committees and quarterly earnings management. International Journal of Auditing, 9(3), 201-219. doi:https://doi.org/10.1111/j.1099-1123.2005.00278.x
Zalata, A. M., Tauringana, V., & Tingbani, I. (2018). Audit committee financial expertise, gender, and earnings management: Does gender of the financial expert matter? International Review of Financial Analysis, 55, 170-183.
doi:https://doi.org/10.1016/j.irfa.2017.11.002
Zhang, Y., Zhou, J., & Zhou, N. (2007). Audit committee quality, auditor independence, and internal control weaknesses. Journal of Accounting and Public Policy, 26(3), 300-327. doi:https://doi.org/10.1016/j.jaccpubpol.2007.03.001

(Al-Nohood et al., 2024)
Al-Nohood, S., Hamid, M. A. bin A., & Latiff, A. R. A. (2024). Impact of Audit Committee Effectiveness on Accrual and Real Earnings Management among Jordanian Listed Firms: Conceptual Paper. International Journal of Academic Research in Business and Social Sciences, 14(2), 2103–2118.

Copyright: © 2024 The Author(s)
Published by HRMARS (www.hrmars.com)
This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seenavc at: http://creativecommons.org/licences/by/4.0/legalcode