The study investigates whether different types of cost accounts are sticky or anti-sticky cost behavior using all listed Jordanian manufacturing companies during the period 2008-2012. Also, the study examines the effect of some explanatory factors on cost stickiness. These factors are asset intensity, debt intensity, free cash flow and growth. The study finds anti-sticky cost behavior for cost of goods sold, and selling expenses, while the cost behavior for SG&A and Administration costs is found to be symmetric, exhibiting neither stickiness nor anti-stickiness. The CGS model shows higher degree of stickiness for companies that have higher asset intensity, and less degree of stickiness for free cash flow. Also, less degree of stickiness is found for growth in the GDP declining period (pessimistic period) as in the case of Jordan. On the other hand, selling expenses model shows higher degree of stickiness for free cash flow and a less degree of stickiness is found for debt intensity.

Islamic banks use finance leases as a mode of financing, after incorporating major alterations in the structure of the contract in order to meet Shariah principles. In this case, the contract is called 'Ijarah Muntahia Bittamleek'. As different structures might lead to different accounting results, the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) issued Financial Accounting Standards to tackle the accounting treatment for such transactions. The paper criticised the accounting treatment offered by AAOIFI for violating the matching principle and lacking faithful representation. Suggested amendments for accounting treatments are also proposed.

Purpose The purpose of this paper is to investigate if Jordanian banks using provision accounts as a technique to smooth income, manage capital ratio, signal future earning and test other determinants affecting provision accounts. Design/methodology/approach The study was conducted on all Jordanian listed banks, and it covers the period 2005-2014. Different models are applied to test the dependent variables (loan loss provision [LLP] accounts) and its effects on different explanatory variables by using several statistical techniques (e.g. multiple regression). Findings The results show that there is no conclusive evidence supports that Jordanian banks used provision to smooth income, manage capital ratio or engage in pro-cyclical behavior. However, a positive and significant effect between one year ahead change in earnings and loan loss allowance, indicating that banks may use provisions to signal future positive changes in earnings. In addition, the results show that loan-to-asset ratio and beginning loan loss allowance have positive effect on provision accounts. Practical implications The results of this study are useful in assisting the regulators (e.g. US Securities and Exchange Commission, central bank) in efforts toward improving the quality of the reported financial reporting in the banking industry and focus on LLP management motivations. This study gives shareholders further insight which enables them to better understand the actions of managers and thus increase their control over their investments. Additionally, auditors should be aware of different incentives for using LLP as a tool of earnings management to be able to detect eventual manipulation of accounting earnings. Originality/value Banking in is one of the most stringently regulated of sectors and, furthermore, has a major impact on other sectors and on economic growth in general. In view of such importance, this study focuses on the banking industry and contributes to the literature in several ways. First, it represents the first known study, to the best of author knowledge, which examines if Jordanian banks use LLP accounts as a tool to smooth income and/or to manage capital. Second, unlike most existing research, which usually studies one aspect of LLP, this study focuses on four main motivations influencing provision accounts in the banks of Jordan. Third, additional tests were carried out to check the robustness of results, for example, sensitivity analysis is used to examine the change of findings by repeating of tests after using different proxies. Fourth, as a difference from other studies, this study investigates the effects of global financial crisis of 2008 on income smoothing behavior of Jordanian banking sector. Fifth, this paper provides a timely contribution to the continuous debate of the effect of LLP on earnings management in a poorly exploited setting, emerging market context.

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The study aimed to examine the relationship between executive compensations and earnings management. Also, it investigates whether managerial ownership influences that relation for the non-financial firms listed in Amman Stock Exchange (ASE) during the period 2010–2019. The study provides evidence that firms with a higher level of executive compensations are associated with a low level of earnings management practices. Results also show that the mitigating role of executive compensations is moderated in firms with managerial ownership, and executive compensations level in firms with managerial ownership is unlikely to be effective. In an attempt to maximize the personal interest, managers with sufficient ownership managed earnings in an opportunistic way to exploit the minority interest through taking advantage of the compensations contracts loopholes.