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The objective of this paper is to examine the impacts of stock market segmentations (SMS) and surplus free cash flow (SFCF) on income-increasing discretionary accruals. The study also provides the initial evidence regarding the influence of audit quality (AQ) as a moderating variable on those relationships. A sample of non-financial firms was taken from the list of Amman Stock Exchange over the period 2013-2019. Using Huber-White’s sandwich estimator for pooled OLS regression, the current research presents empirical evidence harmonious with the prediction in all hypotheses. Further, the findings document that a Big 4 auditor weakens the SMS-DAC and SFCF-DAC associations, which suggests that the role of Big 4 audit firms is effective in mitigating management’s opportunistic behaviour. However, the reported results provide beneficial information to investors, regulators, external auditors, policymakers, shareholders, and other countries with similar institutional environment.

This paper applies runs test -runs up and down, distributions of runs by length, and runs above and below -to examine whether ASE is weak form efficient. The empirical results obtained in this paper suggest that the price behavior in ASE does not follow the random walk model over time. However, this does not necessarily imply a violation of weak form efficiency (vice versa is not correct).

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This study aimed to test the effect of information asymmetry on the stock return in the presence of accounting conservatism in industrial companies listed in Amman Stock Exchange (ASE) in the period from 2006 to 2012. The study found that investors who have private information can benefit from that through achieving outstanding returns, which means that information asymmetry affects the stock return positively, but when taking into consideration the conservative accounting policies practiced by management, this effect was faded.