The effect of ownership structure and board structure on accounting conservatism throughout financial reporting: Evidence from Jordanian industrial corporations

Abstract

This study is based upon constructing two models for quantifying the impact of ownership structure upon accounting conservatism and the impact of board structure upon accounting conservatism for the industrial enterprises registered with the Amman Stock Exchange ASE from 2011 to 2020. Moreover, the finding revealed that conservatism was at a low level among industrial enterprises in Jordan. Family ownership, board independence and large investor ownership have moral impact upon accounting reservations though not upon institutional ownership, managerial ownership, board size, dispersed ownership, board duality or board meetings. So that financial reporting accuracy can be preserved, the research urges against the abandonment of conservative accounting rule adoption, especially in the context of the current economic position of Jordan, with restriction and disclosure of ownership quantities in their various forms within industrial facilities within Jordan. Great attention should be paid to characteristics in boards of directors so that the various stakeholders that are engaged in the firm are protected and the beneficial behavior of the management can be limited.

Keywords

• board structure
• ownership structure
• industrial corporations
• accounting conservatism
• Jordan