The Influence of Corporate Ownership Structure and Board Members? Skills on the Accounting Conservatism: Evidence from Non-Financial Listed Firms in Amman Stock Exchange

The purpose of the current study is to examine the influence of ownership structure and board members? skills in the practice of accounting conservatism of Jordanian listed firms. The data were obtained from the annual reports of 116 Jordanian listed firms for year 2011. By using the multiple regression analysis, the results show that the influence of corporate ownership structure and board skills on accounting conservatism were somewhat varied. All variables were a positive relationship with the conservatism with the exception of the board multiple directorship which has negative relationship with conservatism. Five hypotheses were developed and offered in this paper, institutional ownership and board financial expertise were supported, while family ownership, board tenure and board multiple directorships were not supported due to the higher level of P-value compared to 0.05. These results refer that corporate governance plays a vital role in enhancing the level of conservatism and reducing the agency conflict. Further, regulators bodies in Jordan should increase the effectiveness role of corporate governance in Jordanian companies in order to enhance the quality of financial reports. In addition, this study opens up avenues for more studies on accounting conservatism not only in Jordan, but also in other countries where this area of study is lacking.