Preprint posted on ResearchGate.com; last accessed January 14, 2025.
ISSN/ISBN: Not available at this time. DOI: Not available at this time.
Abstract: This research examines irregularities and the rounding behavior of financial accounting figures (revenue and net income) within the context of 169 Jordanian firms listed in Amman Stock Exchange. The investigation employs Benford's Law to analyze the distribution patterns of the first and second digits of these financial metrics over the period spanning from 2012 to 2022. Moreover, the Jordanian firms under investigation are stratified into two categories based on their net income—positive and negative. The examination of the first digit reveals that Jordanian companies exhibit inaccuracies in financial accounting figures pertaining to revenue figures, regardless of their profitability status. Companies with positive net income display limited indications of manipulating net income, whereas those with negative net income show no tendency for such manipulation. Conversely, the second digit analysis yields no statistically significant evidence of rounding practices in revenue and net income figures. Consequently, there is a obvious need for proactive measures aimed at mitigating earning management practices.
Bibtex:
@misc{,
author = {Omar Alsinglawi and Mohammad Aladwan and Sadam AL Wadi and Emad Alqisi},
title = {Utilizing Benford's Law to Spot Earning and Revenue Management Practices in Jordanian’s Listed Companies},
year = {2024},
url = { https://www.researchgate.net/publication/386904242_Utilizing_Benford's_Law_to_Spot_Earning_and_Revenue_Management_Practices_in_Jordanian's_Listed_Companies},
}
Reference Type: Preprint
Subject Area(s): Accounting