Does Corporate Governance Matter? Evidence from Accounting Conservatism Practices among Jordanian Listed Companies

Abstract

The problem in accounting conservatism practice has been the focus of everyone. In our view, it was attributed amongst other factors to the weak of corporate governance practices. Such study develops an empirical model on the association between some mechanisms of corporate governance and accounting conservatism in terms of foreign ownership, board independence, board size and audit committee, through choosing Jordanian listed companies as research sample. The data were collected through using the annual reports of 113 Jordanian companies for year 2011. Four hypotheses were developed in this study. Upon using the multiple regression analysis, three of them were significant while one was not. This study concludes that there is a positive and significant association between each of foreign ownership, board independence and audit committee and accounting conservatism. While a negative and insignificant relationship between board size and conservatism. In addition, this study opens up opportunities and provides avenues for more in-depth research related to the accounting conservatism.