The Auditing Quality and Accounting Conservatism

摘要: [Abstract] This study aims at verifying that there is accounting conservatism in the financial reports issued by industrial corporations listed on Amman Stock Exchange (ASE) and testing impact of auditing quality characteristics (the firm size, contacts with other global firms, client retention period, fees specialty client's industry) enhancement level conservatism. Towards realizing objectives study, relationship was estimated examined through Binomial Test to test first hypothesis a One-Sample T-Test second hypothesis, multiple regressions (Ordinary Least Squares OLS). Data 39 companies sector for period 2001-2006 were arranged way made it possible apply Pooled Regression. The found significant results indicating low statements Jordanian corporations. indicated some are good, audit have an improving Based these results, we provided recommendations interested parties. [Keywords] quality; conservatism; stock exchange (ASE); company (ProQuest: ... denotes formulae omitted.) Introduction Many scandals breakdowns markets emerged recent years, but most important which not expected events, increased awareness importance role auditing, many parties realized crucial played performance (Abu Ijela & Hamdan, 2010). On hand, number failures declared, as evidenced lawsuits penalties imposed Commission (SEC), very small, having annual failure rate close zero (DeFond Francis, 2005). These events led calls increase effectiveness auditing. However, no agreement concept quality. Both International Federation Accountants (IFAC), American Institute Certified Public (AICPA) failed introduce explicit several attempts define including being defined external auditor detects anomaly then revealing users (DeAngelo, 1981). Deis Giroux (1992) argue auditor's ability detect weaknesses gaps system reporting. Copley Doucet, (1993) go another direction defining application professional standards related field work reporting standards. set methods techniques reduce errors fraud, supported access sufficient convincing evidence order protect interests relevant probability detection matter competence, whereas revelation depends independence auditor, i.e., his/her willingness face pressure exerted producers (Kot Janin, researchers its fraud assist reaching appropriate opinion about fairness statements. provide additional Jordan, degree Accounting Conservatism prepared companies. …