Management of Earnings and Shareholding Structure: Evidence from Jordan


  • Nahed Habis Alrawashedh


The management of accounting data has been the subject of research, discussion and even controversy in several countries, such as the United States, Canada, the United Kingdom, Australia and France. Initially the objective of this article was to conduct a review of the literature leading to a proposal for a conceptual framework for classifying the different forms of accounting data management and ownership structure. This framework is based on the desire to influence the possibilities of wealth transfers between the different stakeholders, which materialise at two levels: earnings per share and the debt-to-equity ratio. The literature on this subject is extremely rich. However, there are several areas that would merit further research.The other objective of this paper is also to study the link between ownership structure and earnings management in Jordan companies. The study is conducted on a sample of companies listed on the Amman Stock Exchange index over the period 2010-2014. Shareholding concentration, measured by the percentage of capital held by the largest shareholder, is negatively associated with earnings management up to a certain level, and then positively above that level (curvilinear relationship). In addition, the share held by the second shareholder is negatively associated with earnings management. As regards to the nature of shareholding, the analyses show that the weight of family and industrial shareholders limits the intensity of earnings management. This result could be explained by the long-term investment horizon of these players, which does not encourage managers to engage in this type of management.