The Impact of Demographic Variables of Audit Committee on Earning Management in Listed Companies in Amman Stock Exchange

Abstract

Purpose: The purpose of this study is to inspect the influence of demographic variables of the AC on EM in listed companies on the ASE. Specifically, the study aims to examine the effect of AC size, independence, expertise, and diversity on EM practices in Jordanian firms.   Theoretical framework: The influence of demographic variables of the AC on EM is an important topic that has been studied by a significant number of researchers, as well as those who are interested in the accounting profession. This subject has gotten a lot of attention from academics, professionals, and other interested parties in recent years (Al-Thuneibat, Alsmadi, and Alsharairi (2017); Al-Khadash (2016); Srouji and Khamees (2021) and Al-Rawashdeh and Al Khattab (2020).   Findings: In this study, demographic variables of the AC, such as gender diversity, age, education, and experience, are expected to affect the effectiveness of the committee in fulfilling its monitoring and control functions or its supportive functions. For instance, a more diverse AC may bring different perspectives and enhance the quality of decision-making, whereas an experienced committee may have a better understanding of the company's operations and risks.   Research, practical & social implications: The study population comprised of all Jordanian industrial firms listed on the ASE for 5 years, from 2017 to 2021. Moreover, 55 industrial firms were included in the analyses. Analyses was used to analyze the panel data which was collected from the annual report were used to analyze the panel data.   Originality/Value: The fact, our current study is the first to inspect the influence of demographic variables of the AC on EM in listed companies on the ASE. Specifically, the study aims to examine the effect of AC size, independence, expertise, and diversity on EM practices in Jordanian firms.