Moderating effect of voluntary disclosure quality on the relationship between earnings management and cost of capital
Earnings management is one of the most important issues that determines the financial position of the companies. However, the method that influences the expectations of investors are the firms that need to be credible, transparent, and more informative about their activities, because when the firms’...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Human Resources Management Academic Research Society (HRMARS)
2024
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| Online Access: | http://psasir.upm.edu.my/id/eprint/116890/ http://psasir.upm.edu.my/id/eprint/116890/1/116890.pdf |
| _version_ | 1848867111881932800 |
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| author | Ghaleb Al Qadi, Maher Azzam Abdul Hamid, Mohamad Ali Saidin, Saidatunur Fauzi |
| author_facet | Ghaleb Al Qadi, Maher Azzam Abdul Hamid, Mohamad Ali Saidin, Saidatunur Fauzi |
| author_sort | Ghaleb Al Qadi, Maher Azzam |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | Earnings management is one of the most important issues that determines the financial position of the companies. However, the method that influences the expectations of investors are the firms that need to be credible, transparent, and more informative about their activities, because when the firms’ stocks have more liquid, the ability to attract investors will increase and it will obtain the necessary funds for their various activities. Therefore, this study investigates the moderating effect of voluntary disclosure quality on the relationship between earning management and cost of capital. That is, the direct relationship between earnings management and cost of capital and as well as the indirect relationship which moderated by voluntary disclosure quality. The study employed panel data analysis to an initial sample of 191 listed companies in the Amman Stock Exchange (ASE) covering 10-years period between 2010-2019. However, we sampled 99 nonfinancial listed companies on the Jordan Stock Exchange. The results of this study show that voluntary disclosure does moderate the relationship between earnings management and the cost of capital. This is because, the companies do not manage their debt profile effectively and efficient in order to improve their earnings management attractive. Low voluntary disclosure could lead to low earnings management, thus, decrease cost of capital. This study contributes to the literature by using cost of equity capital and cost of debt simultaneously and as far as the researcher’s knowledge, there are no studies that had addressed this issue yet in Jordan. It is useful for Jordanian regulators and policymakers (e.g., Amman Stock Exchange (ASE), Companies Control Department). |
| first_indexed | 2025-11-15T14:31:18Z |
| format | Article |
| id | upm-116890 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T14:31:18Z |
| publishDate | 2024 |
| publisher | Human Resources Management Academic Research Society (HRMARS) |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-1168902025-04-17T03:58:42Z http://psasir.upm.edu.my/id/eprint/116890/ Moderating effect of voluntary disclosure quality on the relationship between earnings management and cost of capital Ghaleb Al Qadi, Maher Azzam Abdul Hamid, Mohamad Ali Saidin, Saidatunur Fauzi Earnings management is one of the most important issues that determines the financial position of the companies. However, the method that influences the expectations of investors are the firms that need to be credible, transparent, and more informative about their activities, because when the firms’ stocks have more liquid, the ability to attract investors will increase and it will obtain the necessary funds for their various activities. Therefore, this study investigates the moderating effect of voluntary disclosure quality on the relationship between earning management and cost of capital. That is, the direct relationship between earnings management and cost of capital and as well as the indirect relationship which moderated by voluntary disclosure quality. The study employed panel data analysis to an initial sample of 191 listed companies in the Amman Stock Exchange (ASE) covering 10-years period between 2010-2019. However, we sampled 99 nonfinancial listed companies on the Jordan Stock Exchange. The results of this study show that voluntary disclosure does moderate the relationship between earnings management and the cost of capital. This is because, the companies do not manage their debt profile effectively and efficient in order to improve their earnings management attractive. Low voluntary disclosure could lead to low earnings management, thus, decrease cost of capital. This study contributes to the literature by using cost of equity capital and cost of debt simultaneously and as far as the researcher’s knowledge, there are no studies that had addressed this issue yet in Jordan. It is useful for Jordanian regulators and policymakers (e.g., Amman Stock Exchange (ASE), Companies Control Department). Human Resources Management Academic Research Society (HRMARS) 2024-03-19 Article PeerReviewed text en cc_by_4 http://psasir.upm.edu.my/id/eprint/116890/1/116890.pdf Ghaleb Al Qadi, Maher Azzam and Abdul Hamid, Mohamad Ali and Saidin, Saidatunur Fauzi (2024) Moderating effect of voluntary disclosure quality on the relationship between earnings management and cost of capital. International Journal of Academic Research in Business and Social Sciences, 14 (3). pp. 791-808. ISSN 2222-6990 https://hrmars.com/index.php/IJARBSS/article/view/21000/Moderating-Effect-of-Voluntary-Disclosure-Quality-on-The-Relationship-Between-Earnings-Management-and-Cost-of-Capital 10.6007/ijarbss/v14-i3/21000 |
| spellingShingle | Ghaleb Al Qadi, Maher Azzam Abdul Hamid, Mohamad Ali Saidin, Saidatunur Fauzi Moderating effect of voluntary disclosure quality on the relationship between earnings management and cost of capital |
| title | Moderating effect of voluntary disclosure quality on the relationship between earnings management and cost of capital |
| title_full | Moderating effect of voluntary disclosure quality on the relationship between earnings management and cost of capital |
| title_fullStr | Moderating effect of voluntary disclosure quality on the relationship between earnings management and cost of capital |
| title_full_unstemmed | Moderating effect of voluntary disclosure quality on the relationship between earnings management and cost of capital |
| title_short | Moderating effect of voluntary disclosure quality on the relationship between earnings management and cost of capital |
| title_sort | moderating effect of voluntary disclosure quality on the relationship between earnings management and cost of capital |
| url | http://psasir.upm.edu.my/id/eprint/116890/ http://psasir.upm.edu.my/id/eprint/116890/ http://psasir.upm.edu.my/id/eprint/116890/ http://psasir.upm.edu.my/id/eprint/116890/1/116890.pdf |