The Impact of Applying Corporate Governance Rules on Companies Going Concern - Applied Study on Jordanian Public Shareholding Industrial companies listed on the Amman Stock Exchange

Abstract

This study aimed to examine the effect of applying corporate governance rules on going concern of 51 Jordanian Public Shareholding Industrial companies listed on the Amman Stock Exchange. The data were collected through the annual reports of these companies over the period 2011-2016 (Time Series Data). The research methodology employed content analysis of annual reports, Stepwise Multiple Regression and descriptive statistics. The findings of this study provide evidence of a positive association between corporate governance (Number of Independent Directors, Board Size, CEO Duality, and Ownership Concentration) and going concern of Jordanian Public Shareholding Industrial companies. In the same aspect the study revealed that there is positive association between corporate governance and both of return on assets and net cash flow from operating activities as indicators for going concern. The study recommends that companies should enact a standard pertaining going concern and financial forecasting. Thus, companies can take the necessary precautions to avoid financial failure that affect going concern negatively