IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2017-03-4.html
   My bibliography  Save this article

Evidence on the Extent of Cosmetic Earnings and Revenues Management by Jordanian Companies

Author

Listed:
  • Ahmad Ahed Bader

    (Department of Financial and Administrative Sciences, AL-Balqa' Applied University, Aqaba Branch, Jordan,)

  • Mousa Mohammad Abdullah Saleh

    (Department of Financial and Administrative Sciences, AL-Balqa' Applied University, Jordan.)

Abstract

This study investigates anomaly and rounds up or down in financial accounting numbers (sales, net income, and comprehensive net income) by applying Benford's law to first and second digit numbers of 164 Jordanian firms, for period from (2000 to 2014). Furthermore, Jordanian firms classified into two groups (positive and negative net income), the first digit testing shows Jordanian companies to have inaccurate financial accounting numbers for sales accounts, regardless of their profit or loss results, and companies with positive net income have low evidence for manipulating net income, but firms with negative net incomes don't manipulate it, and negative net income firms have evidence to manipulate comprehensive net income where positive net income firms don't do such manipulation, for testing second digit there are no significant evidences for rounds up or down sales, net income, and comprehensive net income accounts, so effective acts to reducing cosmetic earning management are needed.

Suggested Citation

  • Ahmad Ahed Bader & Mousa Mohammad Abdullah Saleh, 2017. "Evidence on the Extent of Cosmetic Earnings and Revenues Management by Jordanian Companies," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 20-30.
    • Handle: RePEc:eco:journ1:2017-03-4
    as

    Download full text from publisher

    File URL: http://www.econjournals.com/index.php/ijefi/article/download/4370/pdf
    Download Restriction: no
    File URL: http://www.econjournals.com/index.php/ijefi/article/view/4370/pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Xavier Garza-Gomez & Xiaobo Dong & Ziyun Yang, 2015. "Unusual patterns in reported segment earnings of US firms," Journal of Applied Accounting Research, Emerald Group Publishing Limited, vol. 16(2), pages 287-304, September.
    2. Dominique Geyer & Christoph Drechsler, 2014. "Detecting Cosmetic Debt Management Using Benford's Law," Post-Print hal-01059758, HAL.
    3. Rachappa Shette & Sudershan Kuntluru, 2014. "Rounding-up in reported income numbers," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 13(2), pages 156-170, May.
    4. Dominique Geyer, 2012. "Digital Analysis of Sales And Industry Partition: An Examination Of U.S. Public Companies," Post-Print hal-00956949, HAL.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antonio, Fernando J. & Itami, Andreia S. & Dalmedico, Jônatas F. & Mendes, Renio S., 2022. "On the dynamics of reporting data: A case study of UFO sightings," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 603(C).
    2. Al-Rawashdeh, Firas, 2017. "Applying Benford's law into Jordanian insurance companies to identify earning's manipulations," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 13(2).

    More about this item

    Keywords

    Benford's Law; Cosmetic Earning Management; Cosmetic Revenues Managements;
    All these keywords.

    JEL classification:

    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2017-03-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.