The effect of financial reporting quality on earnings quality of industrial companies

Abstract

This study investigates the relationship between financial reporting quality and earnings quality in Jordanian industrial companies. This paper used a survey-based approach, utilizing questionnaires to collect data from selected participants representing Jordanian industrial companies using SmartPLS 4. The study confirms a positive relationship between financial reporting and earnings quality in Jordanian industrial companies. Preparing accurate financial reports allows visualization of the company’s financial position and performance in accordance with accounting standards and disclosure practices. The findings offer valuable guidance to regulators, investors, and stakeholders in understanding the significance of financial reporting quality and its implications for evaluating financial performance and decision-making processes. In addition to promotes financial transparency and informed decision making in the Jordanian industrial sector. This study enhances understanding of the importance of financial reporting quality for ensuring reliable and accurate earnings information. The study’s PLS-SEM methodology also contributes to the methodological literature in this area.