Degree of Disclosure and Conservatism in the Annual Financial Statements in Service and Industrial Public Shareholding Companies listed in Amman Stock Exchange

摘要

The study aimed to reveal the extent of compliance with a proposed index of disclosure in the financial statements by Jordanian public shareholding companies of service and industrial sectors listed in Amman Stock Exchange and to reveal the extent of the Jordanian companies’ compliance with the concept of conservatism (accounting conservatism )in their financial reports in addition to reveal the impact of accounting conservatism in the level of disclosure. To achieve the objectives of the study, an index of disclosure consisting of 105 items has been built and the financial reports of the companies listed in Amman Stock Exchange of the services and industry sectors have been reviewed to identify their compliance with the proposed index of disclosure. The level of conservatism in the companies’ financial reports was measured using two models: ratio of the firm’s book to market ratio and the accrual model. To test the hypotheses of the study, descriptive statistics, One Sample (T) test and a simple regression test were all used. The study revealed lack of full compliance with disclosure in presenting the financial statements according to the proposed index of disclosure in the service and industrial companies and at the sectorial level. The results also showed lack of compliance with concept of conservatism at the annual financial reports’ preparation process and lack of conservatism’s existence in the disclosure’s level in presenting the financial statements in the companies of service and industrial sectors and at the sectorial level. Based on these results, the study recommended the control’s parties to follow up the compliance with international accounting standards and the concept of conservatism which adds more reliability to the financial statements. Key words: Accounting Conservatism, Financial Statements, Disclosure, Public Shareholding Companies listed in Amman Stock Exchange.