IDEAS home Printed from https://ideas.repec.org/a/ibn/ibrjnl/v11y2018i7p130-141.html
   My bibliography  Save this article

Board Diversity and Accounting Conservatism: Evidence from Jordan

Author

Listed:
  • Mohammed Hassan Makhlouf
  • Fares Jamiel Al-Sufy
  • Haitham Almubaideen

Abstract

The main aim of this research is to investigate whether board diversity affect the accounting conservatism. This study depends on a panel data set drawn from 68 industrial firms listed on Amman Stock Exchange (ASE) for the period from 2013 to 2016. Four demographic characteristics of directors have been investigated, namely: gender diversity, education level, average age and nationality diversity. Accounting conservatism was measured by accrual-based conservatism. The results indicate that gender diversity, education level and nationality diversity are significantly positively correlated with accounting conservatism. However, the findings fail to reveal any significant effect for directors' age on accounting conservatism. The findings of this study assert that it is necessary to take board diversity (directors' demographic characteristics) into account when choosing board of directors members because demographic characteristics diversity influences directors' behavior to deal with different issues that are related to accounting principles.

Suggested Citation

  • Mohammed Hassan Makhlouf & Fares Jamiel Al-Sufy & Haitham Almubaideen, 2018. "Board Diversity and Accounting Conservatism: Evidence from Jordan," International Business Research, Canadian Center of Science and Education, vol. 11(7), pages 130-141, July.
    • Handle: RePEc:ibn:ibrjnl:v:11:y:2018:i:7:p:130-141
    as

    Download full text from publisher

    File URL: http://www.ccsenet.org/journal/index.php/ibr/article/view/76160/42128
    Download Restriction: no
    File URL: http://www.ccsenet.org/journal/index.php/ibr/article/view/76160
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Schultz, Joseph Jr. & Lopez, Thomas J., 2001. "The impact of national influence on accounting estimates: Implications for international accounting standard-setters," The International Journal of Accounting, Elsevier, vol. 36(3), pages 271-290, September.
    2. Amneh Alkurdi & Munther Al-Nimer & Mohammad Dabaghia, 2017. "Accounting Conservatism and Ownership Structure Effect: Evidence from Industrial and Financial Jordanian Listed Companies," International Journal of Economics and Financial Issues, Econjournals, vol. 7(2), pages 608-619.
    3. Roman Horváth & Persida Spirollari, 2012. "Do the Board of Directors' Characteristics Influence Firm's Performance? The U.S. Evidence," Prague Economic Papers, Prague University of Economics and Business, vol. 2012(4), pages 470-486.
    4. Simon Ho & Annie Li & Kinsun Tam & Feida Zhang, 2015. "CEO Gender, Ethical Leadership, and Accounting Conservatism," Journal of Business Ethics, Springer, vol. 127(2), pages 351-370, March.
    5. Roszaini Haniffa & Mohammad Hudaib, 2006. "Corporate Governance Structure and Performance of Malaysian Listed Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(7‐8), pages 1034-1062, September.
    6. Amy J. Hillman & Gavin Nicholson & Christine Shropshire, 2008. "Directors' Multiple Identities, Identification, and Board Monitoring and Resource Provision," Organization Science, INFORMS, vol. 19(3), pages 441-456, June.
    7. Robert M. Bushman & Joseph D. Piotroski & Abbie J. Smith, 2011. "Capital Allocation and Timely Accounting Recognition of Economic Losses," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 38(1-2), pages 1-33, January.
    8. Rahimah Mohamed Yunos & Zubaidah Ismail & Malcolm Smith, 2012. "Ethnicity and accounting conservatism: Malaysian evidence," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 20(1), pages 34-57, May.
    9. Abdul Hadi Ibrahim & Mustafa Mohd Hanefah, 2016. "Board diversity and corporate social responsibility in Jordan," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 14(2), pages 279-298, October.
    10. Siti Nuryanah & Sardar M. N. Islam, 2015. "Corporate Governance and Financial Management," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-137-43561-3.
    11. Ahmed, Anwer S. & Duellman, Scott, 2007. "Accounting conservatism and board of director characteristics: An empirical analysis," Journal of Accounting and Economics, Elsevier, vol. 43(2-3), pages 411-437, July.
    12. Givoly, Dan & Hayn, Carla, 2000. "The changing time-series properties of earnings, cash flows and accruals: Has financial reporting become more conservative?," Journal of Accounting and Economics, Elsevier, vol. 29(3), pages 287-320, June.
    13. Antia, Murad & Pantzalis, Christos & Park, Jung Chul, 2010. "CEO decision horizon and firm performance: An empirical investigation," Journal of Corporate Finance, Elsevier, vol. 16(3), pages 288-301, June.
    14. Ayman Haddad & Wasim AlShattarat & Naser AbuGhazaleh & Haitham Nobanee, 2015. "The impact of ownership structure and family board domination on voluntary disclosure for Jordanian listed companies," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 203-234, December.
    15. Roszaini Haniffa & Mohammad Hudaib, 2006. "Corporate Governance Structure and Performance of Malaysian Listed Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(7-8), pages 1034-1062.
    16. Huang, Jiekun & Kisgen, Darren J., 2013. "Gender and corporate finance: Are male executives overconfident relative to female executives?," Journal of Financial Economics, Elsevier, vol. 108(3), pages 822-839.
    17. Weili GE & Dawn Matsumoto & Jenny Li Zhang, 2011. "Do CFOs Have Style? An Empirical Investigation of the Effect of Individual CFOs on Accounting Practices," Contemporary Accounting Research, John Wiley & Sons, vol. 28(4), pages 1141-1179, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fares Jamiel Hussein Alsufy, 2019. "The Impact of Audit Committees Controls Commitment on Strengthening Corporate Governance: Evidence from Jordan," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(3), pages 69-76, March.
    2. Mohammed Hassan Makhlouf & Fares Jamiel Al-Sufy, 2018. "Ownership Concentration and Going Concern: Evidence from Jordanian Listed Firms," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(9), pages 139-139, August.
    3. Siti Fadilah Bt Mat Zin & Marziana Madah Marzuki & Nik Kamaruzaman Hj. Abdulatiff, 2020. "The Likelihood of Fraudulent Financial Reporting: The New Implementation of Malaysian Code of Corporate Governance (MCCG) 2017," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(3), pages 84-91, June.
    4. Festus Oladipupo Olaoye & Ademola Adeniran Adewumi, 2020. "Corporate Governance and the Earnings Quality of Nigerian Firms," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 161-171, October.

    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. Rahimah Mohamed Yunos Author_Email: rahim221@johor.uitm.edu.my & Malcolm Smith & Zubaidah Ismail & Syahrul Ahmar Ahmad, 2011. "Inside Concentrated Owners, Board Of Directors And Accounting Conservatism," Annual Summit on Business and Entrepreneurial Studies (ASBES 2011) Proceeding 2011-053-178, Conference Master Resources.
    2. Bill Francis & Iftekhar Hasan & Jong Chool Park & Qiang Wu, 2015. "Gender Differences in Financial Reporting Decision Making: Evidence from Accounting Conservatism," Contemporary Accounting Research, John Wiley & Sons, vol. 32(3), pages 1285-1318, September.
    3. repec:zbw:bofrdp:2014_001 is not listed on IDEAS
    4. Santanu Mitra & Hakjoon Song & Sang Mook Lee & Shin Hyoung Kwon, 2020. "CEO tenure and audit pricing," Review of Quantitative Finance and Accounting, Springer, vol. 55(2), pages 427-459, August.
    5. Muhammad Bilal Saeed & Syed Kashif Saeed, 2018. "Corporate Governance and Accounting Conservatism: Moderating role of Audit Quality and Disclosure Quality," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 10(2), pages 123-150, June.
    6. Ala Hussein Albawwat & Ammar Almansour & Mo¡¯taz Kamel Al Zobi & Nahed Habis Alrawashedh, 2020. "The Effect of Board of Directors and Audit Committee Characteristics on Company Performance in Jordan," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(6), pages 10-24, December.
    7. Francis, Bill & Hasan, Iftekhar & Wu, Qiang & Park, Jong Chool, 2014. "Gender differences in financial reporting decision-making: Evidence from accounting conservatism," Bank of Finland Research Discussion Papers 1/2014, Bank of Finland.
    8. Alaa Mansour Zalata & Collins Ntim & Ahmed Aboud & Ernest Gyapong, 2019. "Female CEOs and Core Earnings Quality: New Evidence on the Ethics Versus Risk-Aversion Puzzle," Journal of Business Ethics, Springer, vol. 160(2), pages 515-534, December.
    9. Oehmichen, Jana, 2018. "East meets west—Corporate governance in Asian emerging markets: A literature review and research agenda," International Business Review, Elsevier, vol. 27(2), pages 465-480.
    10. Mohd Rashdan Sallehuddin & Nor Azrin Mohamad Rosli, 2019. "Corporate Governance and Performance: Evidence from Industrial Product and Service Sector in Bursa Malaysia," International Journal of Science and Business, IJSAB International, vol. 3(6), pages 87-98.
    11. Doan, Trang & Iskandar-Datta, Mai, 2020. "Are female top executives more risk-averse or more ethical? Evidence from corporate cash holdings policy," Journal of Empirical Finance, Elsevier, vol. 55(C), pages 161-176.
    12. Mejbel Al-Saidi, 2020. "Capital Structure and Corporate Governance Mechanisms in Kuwait Stock Exchange (KSE)," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(6), pages 1-38, June.
    13. Jin-hui Luo & Zeyue Huang & Xue Li & Xiaojing Lin, 2018. "Are Women CEOs Valuable in Terms of Bank Loan Costs? Evidence from China," Journal of Business Ethics, Springer, vol. 153(2), pages 337-355, December.
    14. Dina El Mahdy & Fatima Alali, 2023. "Female CFOs and managerial opportunism," Review of Quantitative Finance and Accounting, Springer, vol. 60(3), pages 1161-1207, April.
    15. Wan-Hussin, Wan Nordin, 2009. "The impact of family-firm structure and board composition on corporate transparency: Evidence based on segment disclosures in Malaysia," The International Journal of Accounting, Elsevier, vol. 44(4), pages 313-333, December.
    16. Luo, Jin-hui & Peng, Chenchen & Zhang, Xin, 2020. "The impact of CFO gender on corporate fraud: Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 63(C).
    17. Kravet, Todd D., 2014. "Accounting conservatism and managerial risk-taking: Corporate acquisitions," Journal of Accounting and Economics, Elsevier, vol. 57(2), pages 218-240.
    18. García Lara, Juan Manuel & García Osma, Beatriz & Penalva, Fernando, 2016. "Accounting conservatism and firm investment efficiency," Journal of Accounting and Economics, Elsevier, vol. 61(1), pages 221-238.
    19. Liu, Yin & Neely, Pamela & Karim, Khondkar, 2022. "The impact of CFO gender on corporate overinvestment," Advances in accounting, Elsevier, vol. 57(C).
    20. Houcine, Asma, 2017. "The effect of financial reporting quality on corporate investment efficiency: Evidence from the Tunisian stock market," Research in International Business and Finance, Elsevier, vol. 42(C), pages 321-337.
    21. Mejbel Al-Saidi, 2021. "Ownership Structure and Timeliness of Corporate Internet Reporting (TOCIR): Case of Kuwait," International Journal of Business and Management, Canadian Center of Science and Education, vol. 15(10), pages 1-60, July.

    More about this item

    Keywords

    board diversity; female; education level; age; nationality diversity; accounting conservatism; Jordan;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    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:ibn:ibrjnl:v:11:y:2018:i:7:p:130-141. 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: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    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.