1
Faculty of Business, Isra University, Jordan
(mohammed.makhlouf@iu.edu.jo)
2
Faculty of Business, Isra University, Jordan
(ashraf.almaharmeh@iu.edu.jo)
Abstract :
The study aims to explore the moderating effect of audit quality on the association between voluntary disclosure and profitability. The study sample consists of (34) industrial companies listed on the "Amman Stock Exchange (ASE)" during the period (2017-2021). To achieve the objectives of the study, the content analysis method has been used to measure the impact of voluntary disclosure by reviewing 32 items of voluntary disclosure. Several statistical methods that fit the objectives of the study are used as well. The results of the study show that there is a positive association between the voluntary disclosure level and the profitability of the company, and that the moderating variable of audit quality negatively affects the relationship between voluntary disclosure and the profitability of the company. Considering the aforesaid results, the study recommends making voluntary disclosure by the industrial companies listed on the "ASE" due to its role in enhancing the profitability of companies.
Keywords :
Disclosure; Voluntary disclosure; Profitability; Audit quality
References :
[1] Makhlouf, M., Oroud, Y., and Soda, M. Z., "Does The Board Independence Influence The Association Between Risk Disclosure And Firm Value? Evidence From Jordan," Humanities & Social Sciences Reviews, vol. 8, pp. 46-54, 2020.
[2] Altawalbeh, M. A. F., "Audit Committee Attributes, Corporate Governance and Voluntary Disclosure: Evidence from Jordan," Management, vol. 10, pp. 233-243, 2020.
[3] Elfeky, M., "The extent of voluntary disclosure and its determinants in emerging markets: Evidence from Egypt," The Journal of Finance Data Science, vol. 3, pp. 45-59, 2017.
[4] Rody, P. H. A., de Sousa, A. F., de Souza, T. R., and Reina, D. R. M., "Profitability and voluntary disclosure of Brazilian equity companies," Contemporary Journal of Economics and Management vol. 18, pp. 264-274, 2020.
[5] Makhlouf, M., Laili, N. H. B., Basah, M. Y. A., and Siam, Y. A., "Board Members'age, Gender Diversity And Firm Performance, Proposing Conceptual Framework," in Kuala Lumpur International Business, Economics and Law Conference (KLIBEL6), Kuala Lumpur, 2015.
[6] Makhlouf, M. and Al-Sufy, F., "Ownership concentration and going concern: Evidence from jordanian listed firms," International Journal of Business and Management, vol. 13, pp. 139-147, 2018.
[7] Al-Homaidi, E. A., Tabash, M. I., and Ahmad, A., "The Profitability Of Islamic Banks And Voluntary Disclosure: Empirical Insights From Yemen," Journal of Cogent Economics Finance, vol. 8, p. 1778406, May 2020.
[8] Alzoubi, E. S. S., "Board Characteristics And Financial Reporting Quality: Evidence From Jordan," Corporate Ownership & Control, vol. 11, pp. 8-29, 2014.
[9] Samaha, K., Khlif, H., and Hussainey, K., "The impact of board and audit committee characteristics on voluntary disclosure: A meta-analysis," Journal of International Accounting, Auditing and Taxation, vol. 24, pp. 13-28, 2015.
[10] Hamada, R. A. and Dahdouh, H. A., "Proposed Model For Measuring And Applying Voluntary Disclosure In The Syrian Business Environment," Damascus University Journal of Economic and Legal Sciences, vol. 31, pp. 34-42, 2015.
[11] Musyoka, M. N., "Effect Of Voluntary Disclosure On Financial Performance Of Firms Listed At Nairobi Securities Exchange," Master SCIENCE (FINANCE AND INVESTMENT), Kca University, Kenya. , 2017.
[12] Albawwat, A. H., Ali Basah, M., and Faizal Khairi, K., "The Relationship Between Voluntary Disclosure And Company Performances On Interim Reports In Jordan Using The Method Of Causality Directions," International Journal of Economics Finance, vol. 7, pp. 266-288, June 25 2015.
[13] Albassam, W., "Corporate Governance, Voluntary Disclosure And Financial Performance: Ban Empirical Analysis Of Saudi Listed Firms Using A Mixed-Methods Research Design," PhD Thesis, University of Glasgow, 2014.
[14] Enache, L., Parbonetti, A., and Srivastava, A., "Are all outside directors created equal with respect to firm disclosure policy?," Review of Quantitative Finance and Accounting, vol. 55, pp. 541-577, 2020.
[15] Alshirah, M. H., Rahman, A. A., and Mustapa, I. R., "Board of directors' characteristics and corporate risk disclosure: the moderating role of family ownership," EuroMed Journal of Business, vol. 15, pp. 219-255, 2020.
[16] Al Lawati, H., Hussainey, K., and Sagitova, R., "Disclosure quality vis-à-vis disclosure quantity: Does audit committee matter in Omani financial institutions?," Review of Quantitative Finance and Accounting, vol. 57, pp. 557-594, 2021.
[17] Aikaeli, J. and Rashid, Z., "Relationship Between Profitability And Voluntary Disclosure: A Case Of Banks In Kenya," November 2015.
[18] Milad, I. A. A. and Bicer, A. A., "The Impact Of Firm Characteristics On The Level Of Voluntary Disclosure:: Evidence From Listed Banks In Borsa Istanbul," International Journal of Finance Banking Studies, vol. 9, pp. 13-25, 2020.
[19] Sartawi, I. I. M., Hindawi, R. M., Bsoul, R., and Ali, A. e. J., "Board Composition, Firm Characteristics, and Voluntary Disclosure: The Case of Jordanian Firms Listed on the Amman Stock Exchange," International Business Research, vol. 7, pp. 67-82, 2014.
[20] Naran, P. M., "The Effect Of Company Size And Voluntary Disclosure On Financial Performance Of Commercial Banks In Kenya," Master, Science In Finance Degree, University of Nairobi, University Of Nairobi- Kenya, 2013.
[21] Ado, A. B., Rashid, N., Mustapha, U. A., and Ademola, L. S., "The impact of audit quality on the financial performance of listed companies Nigeria," Journal of Critical Reviews vol. 7, pp. 37-42, 2020.
[22] Makhlouf, M., Soda, M. Z., Oroud, Y., and Ramadan, A., "The moderating effect of audit quality on the relationship between information asymmetry and earnings management: evidence from Jordan," Afro-Asian Journal of Finance and Accounting, vol. 12, pp. 165-177, 2022.
[23] Makhlouf, M. H. and Al-Ghosheh, D., "The Impact of Ownership Structure on Risk Disclosure: Evidence from Jordan," in International Conference on Business and Technology, 2023, pp. 438-448.
[24] Oroud, Y., Islam, M. A., Ahmad, T. S. T., and Ghazalat, A., "Does Audit Quality Moderate the Relationship between Accounting Information and the Share Price? Evidence from Jordan," International Business Research, vol. 12, pp. 58-65, 2019.
[25] Putri, L. and Suputra, I., "The effect of disclosure of financial report and managerial ability on earnings management with audit quality as a moderating variable," Journal of Finance Accounting, vol. 10, pp. 32-39, 2019.
[26] Soda, M., Oroud, Y., and Makhlouf, M., "The effect of financial policy and capital assets on firm performance: Evidence from service companies listed on the Amman Stock Exchange," Accounting, vol. 7, pp. 917-924, 2021.
[27] Matoke, V. and Omwenga, J., "Audit Quality and Financial Performance of Companies Listed in Nairobi Securities Exchange," International Journal of Scientific and Research Publications, vol. 6, pp. 372-381, 2016.
[28] Hassan, S. U. and Farouk, M. A., "Audit Quality And Financial Performance Of Quoted Cement Firms In Nigeria," European Journal of Business and Management Research, vol. 6, 2014.
[29] Al Qtaish, H. F. and Makhlouf, M. H., "The extent of use of analytical procedures by external auditors in Jordan in the light of ISA 520," International Journal of Economics and Finance, vol. 11, pp. 77-88, 2019.
[30] Dewi, K. and Monalisa, M., "Effect Of Corporate Social Responsibility Disclosure On Financial Performance With Audit Quality As A Moderating Variable," Binus Business Review, vol. 7, pp. 149-155, August 2016.
[31] Soda, M. Z., Makhlouf, M., Oroud, Y., and Al Omari, R., "Is firms’ profitability affected by working capital management? A novel market-based evidence in Jordan," Cogent Business & Management, vol. 9, p. 2049671, 2022.
[32] Soda, M., Makhlouf, M., Oroud, Y., Alshehadeh, A., Omari, R., and Al-Khawaja, H., "Does the audit quality have any moderating impact on the relationship between ownership structure and dividends? Evidence from Jordan," Uncertain Supply Chain Management, vol. 11, pp. 1789-1800, 2023.
[33] Alani, R. and Makhlouf, M. H., "Does Ownership Structure Moderate the Relationship Between Corporate Governance and Corporate Social Responsibility Disclosures? Evidence from Emerging Countries," in International Conference on Business and Technology, 2023, pp. 1347-1360.
[34] Makhlouf, M., "Audit committee and impression management in financial annual reports: evidence from Jordan," EuroMed Journal of Business, vol. ahead-of-print, 2022.
| Style | # |
|---|---|
| MLA | Mohammed Hassan Makhlouf , Ashraf Almaharmeh. "Voluntary Disclosure-Profitability Nexus: The Moderating Effect of Audit Quality." American Journal of Business and Operations Research, Vol. 11, No. 1, 2024 ,PP. 43-53 (Doi : https://doi.org/10.54216/AJBOR.110105) |
| APA | Mohammed Hassan Makhlouf , Ashraf Almaharmeh. (2024). Voluntary Disclosure-Profitability Nexus: The Moderating Effect of Audit Quality. Journal of American Journal of Business and Operations Research, 11 ( 1 ), 43-53 (Doi : https://doi.org/10.54216/AJBOR.110105) |
| Chicago | Mohammed Hassan Makhlouf , Ashraf Almaharmeh. "Voluntary Disclosure-Profitability Nexus: The Moderating Effect of Audit Quality." Journal of American Journal of Business and Operations Research, 11 no. 1 (2024): 43-53 (Doi : https://doi.org/10.54216/AJBOR.110105) |
| Harvard | Mohammed Hassan Makhlouf , Ashraf Almaharmeh. (2024). Voluntary Disclosure-Profitability Nexus: The Moderating Effect of Audit Quality. Journal of American Journal of Business and Operations Research, 11 ( 1 ), 43-53 (Doi : https://doi.org/10.54216/AJBOR.110105) |
| Vancouver | Mohammed Hassan Makhlouf , Ashraf Almaharmeh. Voluntary Disclosure-Profitability Nexus: The Moderating Effect of Audit Quality. Journal of American Journal of Business and Operations Research, (2024); 11 ( 1 ): 43-53 (Doi : https://doi.org/10.54216/AJBOR.110105) |
| IEEE | Mohammed Hassan Makhlouf, Ashraf Almaharmeh, Voluntary Disclosure-Profitability Nexus: The Moderating Effect of Audit Quality, Journal of American Journal of Business and Operations Research, Vol. 11 , No. 1 , (2024) : 43-53 (Doi : https://doi.org/10.54216/AJBOR.110105) |