Jordanian Companies Research Articles

Audit committee financial expertise and internal control weakness: does CEO overconfidence matter?

Purpose The presence of financial experts within audit committees (AC, hereafter) has been a central concern for regulatory bodies. These guidelines underscore the significance of having members with distinct financial acumen and proficiency on AC. The primary objective of this research is to explore the influence of financial expertise within AC on internal control weaknesses (ICWs, hereafter). Furthermore, another aim of this study is to examine the potential combined impact of CEO overconfidence on this correlation. Design/methodology/approach The statistical analysis has been done through the implementation of a multiple regression model by adopting a sample of 82 Jordanian companies, chosen from the years 2014 to 2020. Findings This research reveals that an AC with higher levels of financial expertise is linked to fewer ICWs. Upon further examination, this paper observes that this negative impact is primarily driven by the presence of accounting expertise, as opposed to nonaccounting expertise. It is also evident that CEOs with overconfidence may interfere with the decision-making processes of the audit committees, thus compromising the internal controls even though the committee is financially and accountancy literate. Originality/value This research distinguishes between accounting and nonaccounting financial experience in AC and shows that accounting experience significantly reduces internal control problems. In addition, it introduces CEO overconfidence as a moderating variable, which provides new insights into the field of corporate governance. The implications of these findings are far-reaching in enhancing transparency, trust and accountability by enhancing the quality of internal control.

Factors affecting the quality of accounting disclosures provided in the annual reports for Jordanian firms

AbstractThis study aims to cover the factors that affect Jordanian companies’ annual reports’ accounting disclosures within the country's regulatory framework. This study analyses the qualitative content of accounting disclosures in Jordanian service and manufacturing companies to ascertain whether Jordanian law affects the company's capacity to provide adequate disclosures to stakeholders and whether industry type affects disclosure quality. The content analysis results indicated that Jordanian firms are aware of the laws and regulations governing the preparation of annual reports. Still, corporate governance rules are insufficient. Furthermore, the results revealed that annual report preparers are committed to mandatory and voluntary but provide inadequate CSR disclosures. The findings showed that service firms outperform manufacturing companies in terms of paying attention to narrating events and taking action to reduce their impact. Multiple factors influence the quality of accounting disclosures in Jordan. As for a limitation, content analysis inherently involves some level of subjectivity in interpreting and coding data, which could introduce bias into the analysis. Nevertheless, conducting targeted studies on particular sectors within Jordan could yield valuable information regarding industry‐specific disclosure procedures and obstacles, which could be a future study.

Does the adoption of extensible business reporting language impact the quality of financial reporting? The mediating role of the e-disclosure system

The study aimed to demonstrate the mediating role of the e-disclosure system (E-DS) in the relationship between the extensible business reporting language (XBRL) and the quality of financial reporting (FRQ), for the Jordanian companies listed at the Amman Stock Exchange (ASE). This study uses AMOS to perform structural equation modelling to analyze the data; survey data was gathered from 284 respondents working across various industries and sectors listed at the ASE; 229 usable responses were received. This study finds that XBRL is positively associated with the FRQ. Further, it is found that E-DS positively influences FRQ and plays a mediating role in the connection between XBRL and FRQ. The results of this study are expected to be of high quality regarding the preparation and presentation of financial statements by XBRL. Also, the study’s findings make original contributions to developing countries other than Jordan, which are expected to benefit.

A mathematical model for potash supply chain management with a strategic logistics perspective

Abstract Accepted by: M. Zied Babai This paper introduces a novel Integer Linear Programming model designed to enhance the efficiency and sustainability of the potash supply chain, a crucial element supporting global agriculture. The developed mathematical optimization model focuses on fleet selection (private/outsource) and incorporates the concept of ‘inter-warehouse collaboration’, which addresses key logistics considerations. Integrating mining, processing, storage and transportation, the model encompasses decision variables like extracted carnallite amount, production, storage levels and shipped potash amount. Illustrated through a case study on the Arab Potash Company in Jordan, the results showcase the model’s proficiency in meeting local and international market demands. The model ensures resilient and sustainable supply chain performance by emphasizing logistics optimization, particularly in fleet selection. The study attains the highest ‘warehouse-to-warehouse’ support for Standard and Granular potash types in the international demand scenario, contributing to efficient production planning and fleet management. In conclusion, the presented mathematical model is a valuable tool for potash industry stakeholders, offering insights for strategic decision-makers involved in production planning and fleet management.

Literature Review on Human Resources Agility and Organizational Resilience in Industrial Companies in Jordan

Literature Review on Human Resources Agility and Organizational Resilience in Industrial Companies in Jordan

The Impact of Supply Chain Agility on Operational Performance in Dairy Companies in Jordan

The Impact of Supply Chain Agility on Operational Performance in Dairy Companies in Jordan

The Role of Digital Supply Chain on Inventory Management Effectiveness within Engineering Companies in Jordan

The Role of Digital Supply Chain on Inventory Management Effectiveness within Engineering Companies in Jordan

The role of green marketing strategies for a competitive edge: A case study about analysis of leading green companies in Jordan

AbstractThis study aims to explore the relationship among green marketing practices, leadership commitment, and environmental performance specifically within Jordan's pharmaceutical industry. It explores the impact of green marketing strategies on the competitive advantage of leading green companies in Jordan. The limitations of this study focused on the Jordanian market, and its findings are not generalizable to other countries due to market contrasts. A quantitative approach was employed to address the research question of “to what extent” these strategies contribute. The theory of the resource‐based view (RBV) was applied to this topic because it suggests that a firm's competitive advantage and performance are primarily determined by its unique resources and capabilities. The research instrument consists of 9 factors clarifying the role of green marketing strategies in improving the competitive edge of leading green companies in Jordan. The population of this study includes all implementing managers of Jordanian leading green companies, while the sample of this study consists of 32 implementing managers. After distributing the scale to the participants of this study, their responses were collected and discussed carefully. Then, their responses were analyzed by using SPSS statistical tests. The results show a significant positive correlation between green marketing strategies and competitive edge. This indicates that leading Jordanian green companies actively gain “green marketing” initiatives to gain and maintain a competitive advantage in the market. The study concludes that embracing green marketing is crucial for Jordanian green companies to compete effectively and achieve sustained success. Novelty or originality in this research looks for specific statements that indicate to a novel theoretical approach, a new methodology, or an innovative application of existing theories, or a unique data. This adds new ideas to the knowledge of this study.

The Impact of Comprehensive Innovation on Sustainable Performance in Small and Medium-Sized Jordanian Companies

The Impact of Comprehensive Innovation on Sustainable Performance in Small and Medium-Sized Jordanian Companies

The impact of internal control of non-financial reporting-related weaknesses on audit fees: does external audit size matter?

This study intends to examine the impact of internal control of non-financial reporting-related weakness on the audit fees of corporations. To pursue the research objectives, two research questions are formalized: (i) How does internal control over non-financial reporting-related weakness (ICWN-FR) affect audit fees (ADF)?; (ii) What is the effect of external audit size on the link between ICWN-FR and ADF ?. Multiple regression models with 82 listed Jordanian companies from 2014 to 2020 used as the study sample reveal the following findings. Our findings underscore the importance of considering the characteristics of the audit firm when analyzing the relationship between ICWN-FR and audit fees. Companies audited by Big 4 firms may face greater scrutiny and potentially higher fees for ICWN-FR compared to those audited by non-Big 4 firms. While prior studies have explored various factors influencing audit fees and the impact of internal controls on audit costs, this research uniquely delves into the differential effects observed when companies are audited by different categories of audit firms. The study accentuates the significance of impeccable internal controls within non-financial reporting procedures and their far-reaching consequences on audit fees, thereby highlighting the imperative for corporations to give precedence to augmenting their internal control mechanisms.

The impact of information technology capability on audit report lag and audit fees: empirical evidence from the COVID-19 pandemic

Purpose This study aims to examine the impact of client information technology (IT) capabilities on audit report lag and audit fees in Jordanian companies listed on the Amman Stock Exchange (ASE) during the COVID-19 pandemic. Design/methodology/approach This study analysed financial and non-financial data from 72 Jordanian public shareholding companies listed on the ASE between 2014 and 2021. Using fixed- and random-effects models, the authors examined the impact of client IT capabilities on audit report lag and audit fees. The authors also examined how the COVID-19 pandemic might affect audit report lag and audit fees. The analysis incorporated various control variables specific to the Jordanian context to ensure accuracy. Findings Empirical evidence indicates that client IT capabilities do not significantly impact audit report lag and audit fees. In contrast, the COVID-19 pandemic has positively impacted audit report lag and audit fees, leading to an increase in audit report lag of 60 to 67 days and an increase in audit fees of approximately 15%. It is worth noting that these effects are more pronounced when influenced by factors including return on assets, company losses and audits conducted by the Big 4 firms. Research limitations/implications The scope of this study, which focuses on Jordanian firms, may limit the generalisability of the findings to other contexts. Reliance on aggregate IT infrastructure and software assets as proxies for IT capabilities might not fully capture their multifaceted nature, overlooking the qualitative aspects crucial for audit outcomes. Furthermore, excluding external factors such as governmental regulations underscores the need for future research to explore the nuanced interplay between IT capabilities, internal control systems and regulatory environments, enriching our understanding of audit practices. Originality/value This study contributes to auditing literature by examining the interplay between IT capabilities and audit processes during the COVID-19 pandemic in Jordan. This study highlights the unexpected finding that IT capabilities have minimal impact on audit report lags and fees, opening new avenues for research on how pandemics and similar crises can reshape auditing practices and influence regulatory policies in an evolving economic environment.

Literature Review on Green Supply Chain Management and Competitive Advantage in Manufacturing Companies in Jordan

Literature Review on Green Supply Chain Management and Competitive Advantage in Manufacturing Companies in Jordan

Using ARIMA Model to Forecast Electricity Load in Jordan

Objectives: This study aims to forecast the daily peak electricity load in Jordan using a dataset of hourly peak load data for the period from January 1, 2010, to December 31, 2022, compiled by the National Electric Power Company (NEPCO). Methods: This study employs the Seasonal Autoregressive Integrated Moving Average (SARIMA) model to make forecasts. The data exhibits an upward trend, seasonality, and non-constant variance. To address these features, the SARIMA model is used to account for the trend and seasonality, while a Box-Cox transformation is applied to manage the non-constant variance. Results: Following the standard Box-Jenkins methodology (identification, estimation, diagnostic checking, and forecasting) and utilizing the “(auto.arima)” function in the RStudio software package, the resulting SARIMA model is ARIMA(1,0,1)(2,1,2)[7]. This model is used to forecast 7 future values of the electricity load. The Mean Absolute Percentage Error (MAPE) and the Root Mean Square Error (RMSE) values, as measures of forecast accuracy, support the precision of our forecasts. Conclusion: Based on empirical results, electricity companies in Jordan are encouraged to use time series models for forecasting electricity loads instead of relying on simple spreadsheet models.

Enhancing the internal auditors' effectiveness in jordanian companies: The impact of cloud-based accounting usage and the moderating role of digital proficiency

The main aim of this research was to explore how the digital proficiency of internal auditors impact the relationship between adopting cloud-based accounting and the digital efficiency of internal auditors in Jordanian-listed industrial firms. 98 questionnaires, gathered from internal audit managers in these companies, underwent analysis using Statistical Package for Social Sciences (SPSS) using descriptive-analytical methods. Results indicated that adopting cloud-based accounting significantly influences the effectiveness of internal auditors in these Jordanian-listed industrial companies. Moreover, the study found that the digital proficiency of internal auditors positively affects how much cloud-based accounting adoption impacts their effectiveness. These findings hold importance for regulators and decision-makers, offering insights to shape potential new regulations aimed at enhancing the use of cloud-based accounting in internal audit departments within Jordan's industrial sector. This could ultimately help internal auditors in overseeing public funds. Given the extensive impact of cloud technology on modern business, it's crucial to understand how these innovations can improve the precision and benefits of internal audit functions. Exploring the factors that drive the implementation of cloud technologies in internal audit is also essential. Notably, this study represents the initial attempt to examine existing research on the role of cloud-based accounting in enhancing internal audit effectiveness concerning the digital proficiency of auditors within Jordan's industrial sector.

Entrepreneurial leadership: key to sustainable innovation and competitiveness in Islamic insurance companies in Jordan

Purpose This study delves into the significant impact of entrepreneurial leadership (EL), organizational innovation (OI) and competitive advantage (CA) on the sustainability of organizations in the Jordanian Islamic insurance sector. This study aims to unravel the intricate dynamics among these pivotal factors, highlighting their collective role in the sustained success and resilience of Islamic insurance companies in Jordan. By examining the synergistic interplay between EL, OI and CA, the research seeks to offer invaluable insights into cultivating a sustainable future for these institutions. Design/methodology/approach This study adopts a positivist, quantitative approach to investigate the relationships between EL, OI, CA and organizational sustainability (OS). Data collection was achieved through questionnaires in a cross-sectional analysis of these variables. Convenience sampling yielded 389 valid responses, an 81% response rate, ensuring a thorough understanding of the dynamics within this framework. Findings The findings from the study on Jordanian Islamic insurance companies highlight the critical role of EL in influencing organizational dynamics. The research establishes a positive relationship between EL and both OI and OS. Furthermore, it identifies a significant positive correlation between EL and CA, underscoring the importance of leadership in securing a competitive edge. This study also emphasizes the vital role of OI in bolstering OS and confirms that a strong CA enhances OS, reinforcing the interconnectivity of these essential organizational components. Practical implications This study provides important insights for professionals in the insurance sector, especially those within the Jordanian Islamic insurance industry. It emphasizes the crucial role of EL in fostering innovation, competitiveness and sustainability. By understanding the significance of EL, companies can adopt more dynamic and effective strategies in leadership, organizational development and strategic planning, thereby enhancing their overall performance and resilience. Originality/value By conceptualizing EL and OS as second-order constructs, this study seeks to provide a detailed understanding of how EL catalyzes OI, CA and sustainability in an organizational context. This approach contributes significantly to the broader discussion on EL and OS, particularly within the Arab region and specifically in Jordan, offering nuanced insights into their roles and interrelations in shaping organizational dynamics.

Leadership in the digital era: Exploring the nexus between leadership styles and job satisfaction. The mediating role of perceived organizational politics in Jordanian insurance companies

The study intends to determine how leadership techniques adjusted to the trends impact employee job satisfaction, considering the mediating influence of perceived organizational politics in light of the expanding influence of digital technology and virtual work settings. The study included a solid sample of 300 workers from different parts of Jordan. The employees filled out the questionnaire anonymously. 5-point rating Likert scales were used to capture a range of viewpoints. Using the Partial Least Squares software, this study applies Structural Equation Modelling analysis to examine the relationships between job satisfaction, perceived organizational politics, and leadership styles in Jordanian insurance companies. The study focuses on all employees of insurance companies in Jordan, including people working at various administrative levels. The most common length of job tenure was between one and five years (38.67%). Initial results show a strong beneficial relationship between transformational leadership philosophies and contentment at work (β = 0. 378, t = 6.266, LL = 0.483, UL = 0.718, p < 0.001). Similarly, transformational leadership had the highest standardized effect on perceived organizational politics with a coefficient of 0.443. Furthermore, the complex processes by which leadership philosophies tangentially affect job satisfaction levels are revealed by the role of mediation of perceived organizational politics.

The Relationship between Perceptions of High-Performance Work Systems and Corporate Social Responsibility (CSR) Considering the Moderating Effect of a Positive Diversity Climate

Companies have shown interest in advanced human resource management as a means to secure distinctive competitive advantages for organizational survival and growth through sustainable management systems. Hence, in the current context, where sustainability in business is a growing concern, the objective of this study was to investigate the relationship between high-performance work systems and a company’s social performance, taking into account the organizational climate as a situational variable. Specifically, this study aimed to analyze the impact of perceptions of a high-performance work system on the perception of a company’s social responsibility (CSR) among employees of Jordanian companies with an organizational size of 300 or more. This study used 175 valid questionnaires, and SPSS and AMOS 24 were used to test the hypotheses. The results showed that there was a positive relationship between the perception of a high-performance work system and the perception of a company’s CSR. Furthermore, this study found that a positive diversity climate could enhance the positive relationship between the two. These findings suggest that high-performance work systems can contribute to the development of sustainable human resource management systems and that a positive diversity climate is essential in shaping these systems. Based on these results, it is recommended that companies implement HPWSs and encourage workforce diversity to maximize the value of CSR activities and ensure their sustainability.

Artificial intelligence applications for enhancing organizational excellence: Modifying role of supply chain agility

The study’s goal was to demonstrate the modifying role of supply chain agility in the impact of artificial intelligence applications on organizational excellence in Jordanian e-commerce companies. The analytical and descriptive approach was adopted. The study population consisted of 160 companies operating in the e-commerce sector in Jordan. The sample comprised 400 respondents working in senior and middle management positions. The questionnaire was utilized to collect the data. The results showed an impact of artificial intelligence applications in all dimensions (expert systems and neural networks) on the organizational excellence of e-commerce companies in Jordan. The value of the adjusted coefficient of determination (Adj. R2) was .265%. Based on the model’s F value (4.1190) and its level of significance (P; 0.00), the impact of these techniques on organizational excellence is statistically significant. Additionally, the results displayed an impact of supply chain agility on improving the impact of artificial intelligence applications on organizational excellence. The value of the degree of influence ß after introducing the modified variable supply chain agility and the value of R Square increased by .11 at the significance level (Sig). = 0.000. This study recommended training workers to stay up to date with developments in artificial intelligence, expert systems, and neural networks in their operations, control of searching for this evidence within databases, and knowledge representation.

The Practice of Enterprise Risk Management and Sustainable Performance in Jordan

The primary objective of any organization is to minimize risks and losses while optimizing values, revenues and returns. Therefore, risk management, which is often referred to as risk identification, likelihood of occurrence, and impact on the business, is essential. Recent corporate catastrophes have brought to light how inadequately corporations handle risks. In reaction to these challenges, organizations have shifted from separate and personalized procedures to a more comprehensive and integrated enterprise risk management (ERM) perspective in their risk management strategies. To address these new global sustainable challenges which include hunger, poverty, high unemployment, climate change, and related issues, businesses should place a strong priority on environmental preservation and social responsibility. Jordan is one of the countries dealing with several issues related to sustainability. The sustainable performance of Jordanian firms deserves further attention. Managers in Jordanian industrial businesses must keep a close eye on how the company's environmental environment is being improved to reduce air pollution, the usage of hazardous materials, and other difficulties. Therefore, companies in Jordan must adopt strategies that will allow them to face this issue to improve their social, environmental, and economic performance. Jordan's manufacturing and service industries should be at the forefront of a comprehensive approach to risk management and board monitoring, given the growing concerns regarding the environment, society, and economy. Since ERM is a relatively new concept, its implementation in Jordanian industrial and service companies is still in its early stages. Moreover, there is a lack of comprehensive research regarding the ERM in Jordan.

Does corporate governance moderate the impact of earnings management on capital structure of the listed corporations on Palestine and Amman Bourses

The purpose of this research is to investigate the moderating role of corporate governance on the relationship between earnings management and debt level in capital structure. The paper used a hypothesis-testing research approach to gather data from the annual reports of 13 industrial companies listed on Palestine Exchange and 25 Jordanian companies listed on Amman Stock Exchange from 2013 to 2020. Descriptive and inferential statistics were employed, along with correlation analysis to evaluate linear relationships between variables. The fixed and random effect regressions were utilized to develop the research model. In the case of Palestinian manufacturing firms, the results revealed that Earnings Management (EM) had a significant negative impact on debt level. According to the moderating role of Corporate Governance (CG), larger boards and the existence of female members on the board of directors causes an increase in the high-leverage impact of EM, whereas CEO duality mitigates the high-leverage impact. However, in the case of Jordanian manufacturing firms, EM showed an insignificant impact on debt level. Regarding the moderating role of CG, it was proved that the presence of female members on the board of directors increased the firm’s reliance on debt financing as a result of EM practices, while institutional investors mitigate the effect of EM on debt financing, leading to a decrease in reliance on debt. The findings of this research are suitable for the regulators while formulating policies on the Corporate Governance and the Impact of Earnings Management on Capital Structure. These findings have guided the policymakers that they should enhance their focus on Palestine and Jordan companies to test Corporate Governance Moderates the Impact of Earnings Management on Capital Structure. This study is also helpful for the new researcher while investigating this area in the future.