Accounting Policies And Corporate Governance In Jordan

Financial crises and Globalization has increased need to ensure the validity of financial statements issued by companies, especially after the bankruptcy of many companies as a result of the adoption and changing of accounting and financial policies by company managers that distort the financial statements , that led to adopt corporate governance both developed and developing countries which is the way organized relationships between all stakeholders of business and to preparing financial statements in accordance International Financial Reporting Standards (IFRS ) . The purpose of this paper is to present the current legislative environment and institutional framework of corporate governance in Jordan and to develop knowledge about assess accounting and financial policies in the practice of corporate governance, accordance with the key principles of corporate governance by Organization for Economic Co-operation and Development (OECD), and how accounting policies effect on corporate governance. Corporate governance is the way that Company is managed by management through the approved accounting and financial policies which help companies enhance their ability to achieve the objectives and increase efficiency and effectiveness with the best use of available resources, which means that company who have good governance will have more disclosure and transparency. In general, Jordan has some features of the best corporate governance practices, but he still needs more progress in the independence of directors, shareholder rights and entitlement, and needs more independent for internal and external auditing. The problems of Jordanian business environment which impact on corporate governance are: 1-There is a need to raise awareness and education about corporate governance, its importance and the mechanisms for its implementation. 2-Adequate disclosure and transparency instructions are required only from companies listed on the Amman Stock Exchange; 3-Some managers use creative accounting by changing certain accounting policies to affect the company's financial results; 4-Some companies still owned and managed families, and some limited liability companies are not listed on the Amman Stock Exchange.