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Browsing Graduate Studies by Subject "Financial statement comparability, accrual quality."

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    THE EXTENT TO WHICH FINANCIAL INFORMATION COMPARABILITY IS AFFECTED BY ACCRUAL QUALITY AMONG SELECTED PALESTINIAN AND JORDANIAN INDUSTRIAL AND SERVICES LISTED COMPANIES
    (جامعة النجاح الوطنية, 2022-07-07) Arafat, Nour
    This research aims to investigate whether accrual quality has an effect on financial statement comparability in Palestinian and Jordanian listed companies. Financial statement users are in a better position to have the ability to compare financial statements that are characterized with high quality; thus making the correct decision. The research has chosen the industrial and service sectors as the research sample, covering the period (2010-2020). Research results have shown that accrual quality is insignificantly related to comparability among all the selected sectors. This research refers the insignificance results to financial statement comparability. According to De Franco et al. (2011), Comparability is defined as a mapping from economic events to financial statements. Earnings are taken as a proxy for financial statement and stock price return as a proxy for economic events. Comparability regression results have shown that this relation does not explain the variation in the variables and the model does not fit well in our setting. The change in stocks prices both in Jordanian and Palestinian selected sector is not that much changeable; as a result, it could not have an effect on net income. This research concludes that using market measures may not be reliable in comparing firms. Adopting such comparability models that highly depend on market value measures may not provide reliable answers. These models are likely to be applicable appropriately in developed countries that are characterized with high capital markets. Whereas developing countries, are characterized with weak capital markets, thus will lead to information asymmetry. The research recommends investors and any type of financial statement users, who are concerned in financial statement comparability, must be cautious in selecting a comparability model that suites the surrounding economic setting, so as to get validating answers. Future research would investigate an output based comparability model fits the regions where may not actually present markets value measures and have variation in market efficiencies.