Other Corporate Information Sources Usage: Evidence from Jordanian Individual Investors

Fawzi Al Sawalqa

doi:10.5539/ibr.v5n4p81

Abstract

This study aims to provide insight into of the extent of usage of other corporate financial information sources by Jordanian individual investors in taking their investment decisions in Amman Stock Exchange (ASE) in comparison with annual corporate reports. The study also aims to identify the main reasons for using sources of information other than corporate annual reports. The result of study revealed that corporate annual report was the most used sources of information. This followed by published daily share price, newspapers and magazines, corporate web sites, advice of friend, tips and rumours, stockbrokers’ advice and discussion with company staff respectively. These results indicated that Jordanian individual investors put more emphasis on the usage of the written sources than verbal sources. The results also indicated that Jordanian individual investors start to give more attention to the usage of electronic sources as the corporate web sites ranked forth. In respect to reasons that encouraged investors to use sources of information other than corporate annual reports, the results indicated that the first three reasons include; easier to get information, containing new information and giving up-to-date information. These reasons form the features of the written sources which were indicated as the most used sources of information.

Highlights

Accounting information is useful and effective when it supports decision-making
The results presented in the table showed that corporate annual report was ranked as “used to a great extent” or “used to a very great extent” by about 54.3 % of the Jordanian individual investors with a means of 3.52
This result, contradicts the argument of Loibl and Hira (2009) which assumes that an information source on financial markets can only to some limited extent become automatic. This followed by advice of friend, tips and rumours, stockbrokers’ advice and discussion with company staff respectively. This result indicated that Jordanian individual investors put more emphasis on the usage of written financial information sources and avoid the usage of verbal sources such as stockbrokers’ advice and discussion with company staff

Summary

Introduction

Accounting information is useful and effective when it supports decision-making. Optimal decision support is the main purpose of accounting information that corresponds to decision usefulness (Bagaeva, 2008). This research seeks to contribute to the development of knowledge in this field in Jordan as a developing country and to identify the main other information sources that used by individual investor for invest decision-making. Different regulative institutions and laws have played an important role in developing accounting in Jordan. These include for example, Amman Stock Exchange (ASE), Jordanian Association of Certified Public Accountants (JACPA), Income Tax Law, General Sales Tax Law and Companies Law. In addition, Jordan has been under pressure to use and enforce international accounting standards, exerted by several international institutions including the International Accounting Standards Board (IASB), the International Federation of Accountants (IFAC), the International Organization of Securities Commissions (IOSCO), the World Bank, and the International Monetary Fund (IMF)

Objectives

Results

Conclusion