Accounting is considered the chief pillars of which play an of import and important to the success of economic activity in that it provides to all users of fiscal statements information to assist in the planning, control and public presentation rating and managerial decision-making and investing administration. Accounting is considered as the linguistic communication of concern because they are based on the bringing of information to the users of fiscal studies, the sum and quality of that information based on the demands of users and the types of determinations ( Weygant et. Al. , 2002 ) .
Accounting criterions have worked to place ways, processs and regulations necessary for the practical application for truth, uniformity and consistence so that a determination shaper of the comparing and analysis and reading of the figures in the fiscal studies decently.
To finish benefit expected from accounting through fiscal statement analysis and reading must be that the fiscal statements are classified in a mode consistent with accounting criterions, and must be disclosed to the full and decently all information that is necessary to understand the fiscal statements and aid in the analysis and reading ( Rashed, 1999 ) .
The rule of information revelation in the fiscal statements play an of import and cardinal function in the readying of accounting informations published, where a great attending to this rule, whether by the academies of professional accounting or regulative organic structures of the profession.
In order to fix informations that meets the revelation of adequate and appropriate, there was an increasing involvement by the organisers of the companies and regulators for the accounting profession in assorted states of the universe have information that should be disclosed and how to disclosed.
The Jordanian Law determined the registering companies as ( Public Shareholding, Private Shareholding, Limited Liability, General Partnership and Limited Partnership ) . The importance of this of companies emanates from the importance of the national economic public presentation and gross domestic merchandise where of making the handiness of effectual control tools particularly the volume of its activates and capitals and the bases of stockholders were increased in the market sphere and other economic sectors and this enforce some control processs and use wise administration that adopted internationally for companies ( companies control department-forth one-year study 2008 ) .
Limited Liability Company in brief, made up of two or more, and is the fiscal revelation of an independent company from the fiscal revelation of each spouse and to which the company ‘s assets and money is responsible for the debts and duties which would non be the spouse responsible for those debts, liabilities, losingss merely to the extent that quotas are owned by the company ( article 53 – Jordanian Companies jurisprudence No. ( 22 ) for the twelvemonth 1997 and its amendments ) .
Be registered as a limited liability company consists of one individual or become owned by one individual.
Determines the capital of a limited liability company in Jordanian Dinars, provided that non less than one 1000 dinars, divided into portions of equal value dinars per portion at least one indivisible ( article 54- Jordanian Companies jurisprudence No. ( 22 ) for the twelvemonth 1997 and its amendments ) .
Deduce a limited liability company name from the aims and must be added the words ( with limited liability ) , and these words can be abbreviated characters ( LLC. ) and to include the name and the sum of capital and enrollment figure in all the documents and publications used in her work and contracts ( article 55- Jordanian Companies jurisprudence No. ( 22 ) for the twelvemonth 1997 and its amendments ) .
The Director of the company ‘s direction or executive board, with at least two members and no more than seven, whether they are spouses or than others, harmonizing to the commissariats in the Statute of the company for four old ages and may supply the system for less than the director commission shall elect a Chairman and Vice-Chair and Commissioners to subscribe on behalf of the company ( article 60-A-Jordanian Companies jurisprudence No. ( 22 ) for the twelvemonth 1997 and its amendments ) .
The director of the limited liability company or the director commission shall hold full power in the direction of the company within the bounds prescribed by its regulations. The actions and behaviour or exercised by the director or board of managers, on behalf of the company are adhering on them in the face of others covering with the company in good religion, irrespective of any limitation contained in the company ‘s Memorandum and Articles of Association ( article 60-B-Jordanian Companies jurisprudence No. ( 22 ) for the twelvemonth 1997 and its amendments ) .
The director of a limited liability company or its directors commission shall fix the company ‘s one-year balance sheet and fiscal histories including the net income and loss history, necessary elucidations and hard currency flow statements, to the full audited by a accredited hearers in conformity with recognized and accredited international auditing rules, in add-on to the one-year study on the company ‘s activities. The director shall so subject the same to the company ‘s General assembly, during its one-year ordinary meeting and shell present the Controller with a transcript thereof accompanied by the appropriate recommendations prior to the terminal of the initial three month period of the new financial twelvemonth of the company ( article 62-Jordanian Companies jurisprudence No. ( 22 ) for the twelvemonth 1997 and its amendments ) .
This survey was to show the committedness of limited liability companies with the instructions of accounting revelation, and to place the consequence of some administrative and fiscal indexs related to the company and some features of the environment in which they operate at the degree of committedness of these companies to unwrap accounting instructions.
2. Research Importance
Fiscal studies are of great involvement from assorted professional and legislative organic structures, because of its of import agencies of communicating of information utile to a figure of classs related companies exporting to these studies, and therefore the success of the loaning or investing determination depends on the handiness of the necessary information for determination shapers and to enable them to take an appropriate determination can be obtained much of this information through the fiscal studies published by companies, and therefore is disclosed in these studies is a cardinal right of users of these fiscal studies and necessary benefit to the beginning of these studies ( Jayyousi, 2003 ) . the survey of these studies and place how incorporate the information required in conformity with the revelation demands of accounting is vitally of import to do informed determinations and appropriate.
All old surveies and research focused on Public Shareholding companies listed in the fiscal markets and ignored other types of companies, So this survey is The first of its sort, which provides a topographic point visible radiation on the limited liability company which are less controlled in using the criterions of accounting revelation.
3. Research Problem
Since the one-year fiscal studies of the most of import primary beginnings of informations and information used by investors in constructing their investing determinations and fiscal establishments in allowing loans and recognition determination devising and additions assurance in the coverage duty under international accounting criterions and revelation demands of local Jordanian jurisprudence, so The job of this survey is to reply the undermentioned inquiries:
What is the grade of committedness for limited liability companies with revelation demands and accounting criterions?
Is there a relationship between internal factors ( such as company manner and fiscal indexs ) and the existent degree of revelation in fiscal studies issued by the Limited Liability Companies?
Is there a relationship between external factors ( such as the economic sector and the size of the audit company ) and the degree of revelation of the existent fiscal studies issued by the Limited Liability Companies?
4. Research Aims
This survey aims in general to place the existent degree of revelation in fiscal studies issued by limited liability companies, every bit good as place the factors that can impact the measure and quality of information disclosed and the intent of this survey to accomplish the undermentioned aims:
Know the grade of committedness for limited liability companies with revelation demands and accounting criterions.
Determine the relationship between internal factors ( such as company manner and fiscal indexs ) and the existent degree of revelation in fiscal studies issued by the Limited Liability Companies.
Determine the relationship between external factors ( such as the economic sector and the size of the audit company ) and the degree of revelation of the existent fiscal studies issued by the Limited Liability Companies.
5. Literature Survey
There are no old surveies spoke openly of accounting revelation criterions in limited liability companies, for that I based on some surveies of the same topic but on public shareholding companies which are:
The survey of Cerf ( 1961 ) , from the open uping surveies on the relationship between revelation and features of the company in America, where a promising index of revelation identified the types of information that must be displayed by the company ‘s one-year study, on the footing of analyzing the procedure of investing determination, and so applied the index on a sample of one-year fiscal studies for companies to pull out the grade of revelation for each company harmonizing to its index, and so associate the findings of three features: the size of the company as measured by entire assets and figure of stockholders, the interpolation in the fiscal market, and the research worker found a positive correlativity between the grade of revelation of all three belongingss of the company.
Study Gharaybeh and Naber ( 1987 ) , turn toing the handiness of revelations in one-year fiscal studies of the industrial public shareholding companies in Jordan, where the survey aimed chiefly to place the handiness of revelations in the study every bit good as the extent of the relationship between these accounts and some features of companies, such as entire assets and return on equity and the figure of stockholders. The purpose of the survey every bit good as to take the extent of consensus among fiscal analysts and investors in measuring the comparative importance of the information that is disclosed. The research workers used the questionnaire included ( 36 ) points of information provided by the published fiscal statements. The consequences showed that the rate of revelation of information which are contained in declaration is low, and found similarities between the demands of single investors and fiscal analysts with regard to the fiscal statements. Equally good as the survey found a positive correlativity between the proportion of revelation and entire assets of the company and the figure of stockholders.
Study of Wallace et Al. ( 1994 ) , This survey focused on analysing the relationship between the grade of accounting revelation in the fiscal studies and a figure of features of these companies in a sample of Spanish companies, a ( 50 ) companies from non-financial companies registered in each of the Madrid Stock Exchange and the Stock Exchange in add-on to Valencia ( 100 ) Company of non-financial companies non registered in the stock market.
The features of companies has been divided into three groups harmonizing to the undermentioned categorization:
1 – features associated with the construction of the company, including: the size of houses ( plus size, gross revenues volume ) , and the construction of the support ( the per centum of loans, belongings rights ) .
2 – features associated with the public presentation of the company and include: ( liquidness ratio, rate of return, profitableness ratio ) .
3 – features associated with the market and include: ( nature of activity, enrollment of the securities market, the external hearer ) .
And the survey showed that there is a positive relationship between the size of each degree of revelation of the size of the company and the company ‘s stock market, while there was no nexus between the degree of revelation of accounting and liquidness ratio.
Khcharmeh survey ( 1999 ) , the purpose of this survey was to find the degree of revelation in one-year fiscal studies published by the industrial and service companies of Jordan and to place whether there is betterment in the degree of revelation by these companies during the survey period from 1988 to 1995, the survey has besides identified after some of the factors in the degree of revelation factors such as plus size and gross revenues volume and the proportion of debt, and the liquidness ratio, and the nature of the activity.
A The survey found that the degree of revelation in corporate fiscal studies, the sample which consisted of ( 50 ) public shareholding companies, industrial and service in the diminution in the period between 1988 to 1993. With some exclusions, which reduced the degree of revelation in the one-year fiscal studies during this period, the sample companies increased by 50 % . The survey besides demonstrated a relationship between the liquidness ratio and the proportion of debt and the nature of the activity and the degree of revelation in one-year fiscal studies for these companies, while the survey did non show a relationship between each of the gross revenues volume and degree of revelation in fiscal studies of companies during the period
Survey of Abu-Nassar and Rutherford ( 2000 ) , conducted on a sample of single investors and institutional investors and loaners, faculty members, and writers of the fiscal statements in Jordan to place the most of import information to be published in the one-year fiscal studies required by the users of fiscal statements, the survey aimed to mensurate the grade of existent revelation of such information in one-year studies of public shareholding companies in Jordan. Survey consequences showed the presence of homogeneousness among users of fiscal statements in measuring the importance of information to be published in one-year studies, while demoing a difference between the preparers and users of fiscal statements in measuring the significance of this information, and the other consequences of the survey of the low degree of revelation in one-year fiscal studies and non run into the basic demands of information needed by users.
Hmeidat survey ( 2004 ) , The survey aimed to place the extent to which industrial companies listed on the ASE with revelation demands and instructions of the International Securities Commission when fixing their one-year fiscal studies, in add-on to analyzing the relationship between the grade of committedness to revelation demands and certain features of companies represented in the size of the company, and the figure of stockholders, return on equity, and the old in the industry, and size of the debt. The survey attempted to place the comparative importance of the revelation demands of domestic and international investor position of the single and institutional investor, and the grade of disagreement between these two classs to find the importance of revelation demands.
A A The survey found that the rate of committedness to revelation demands harmonizing to the demands of international accounting 79 % , while the rate of committedness to the demands of the Securities 79.4 % . And that there are disagreements between the companies adhere to revelation demands in conformity with the demands of international accounting and revelation demands of the Securities Commission. The survey showed that there a positive relationship between house size and grade of conformity with revelation demands contained in the international accounting criterions, and a fresh relationship between returns on equity, and the grade of conformity with revelation demands of the Securities Commission, the survey did non show a relationship between the grade of conformity with those demands and other features of companies. showed survey that there is a difference in measuring the comparative importance of the revelation demands contained in the international accounting criterions, the single investor and institutional investor, while there is no disparity between the two groups in measuring the comparative importance of the revelation demands in the instructions of securities.
Study of Tsamenyi et. Al. ( 2007 ) , Which aimed to utilize the degree of revelation to analyze the corporate administration patterns of listed companies in Ghana. The survey examined the impact of factors ( ownership construction, the distribution of portions, house size and purchase ) at the degree of revelation. The survey sample included ( 22 ) companies listed in the fiscal market, Ghana, where the survey showed that the rate of revelation is low in Ghana compared with other developing states. In add-on, the survey showed that the construction of ownership, distribution of portions, the size of the company with important impact on the degree of revelation, while the purchase of no important impact in act uponing the degree of revelation.
6. Theoretical Model
This subdivision reviews the variables and theoretical accounts, society and sample of the survey and informations aggregation methods of the survey.
6.1. Operational Definitions:
A. Dependent variable
The Level of Disclosure: Which measures the extent to which Limited Liability Companies using International Financial Reporting Standards ( IAS ) and ( IFRS ) in its fiscal statement ( in general signifier ) .
B. Independent variable
First: The Internal Factors
Company Control Environment: Represent How senior executive direction trade with fiscal, accounting and other administrative affairs and the direction credence of the application of a new criterions, for illustration with an strong regulative environment, the map depend on the footing on hazard appraisal, which lead company to unwrap more and get the better of the fright of the new trial for revelation, besides its include the Knowledge and experience of fiscal directors about revelation standards ( IAS & A ; IFRS ) and its application in the fiscal studies.
Company Accounting Principles and Standards: Fundamentalss of accounting adopted by the company to register its day-to-day minutess and directed its one-year fiscal studies and the accounting information system used.
Company Financial Position: The fiscal indexs of the company such as company size, its profitableness, liquidness, solvency and proprietors equity and its consequence on the Borrowing determination and capital enlargement and the revelation for Tax intents.
Nature of the Company Partners: the Relationship spouse in the house, whether a household concern or non-family company and the figure of spouses and their willingness to disclosure on the accounting criterions that affect them personally like its personal privileges.
Cost of Disclosure: Some international criterions require some high-cost revelation demand, such as high-efficiency systems to publish certain studies and assignment of people with high efficiency and the ability of company to Supply that.
Second: The External Factors
Economic Sector: There are some economic sectors require full and much revelation of certain criterions non required by other sectors, like fiscal investings and Bankss sectors need more revelation than Industrial, commercial and service sectors.
Legal Environment: include all actions and policies that govern limited liability companies and the consequence of the Lack of legal control Institutions ( the Companies Control Department is the lone legal control establishment for the limited liability companies Unlike public shareholding companies which controlled by more than one legal establishment ) , and the Lack of theoretical accounts of the fiscal statements of limited liability companies in the Companies Control Department and the ineffectualness of the regulative governments in this respect, and the most of import legal issues is the revelation for Tax intents.
Size of Audit Firm: The most of import feature of the quality of the audit company is the quality of audited fiscal statements, the most big and trusted audit companies is the ( Big 4 ) which are:
PricewaterhouseCoopers, Its agent in Jordan ( Bawab & A ; spouses company ) .
Deloitte & A ; Touche , Its agent in Jordan ( Saba & A ; spouses company ) .
KPMG, Its agent in Jordan ( Auditors Distributor Company ) .
Ernst & A ; Young, Its agent in Jordan ( United Accountants Company ) .
Other factors that affect revelation in limited liability companies, It will non be measured in this survey ( for cognition and reference merely ) :
The nature of the accounting criterions themselves: there are some criterions that relate to public shareholding companies do non use to the fiscal statements of limited liability companies, such as ( IFRS 8 ) and ( IAS 33 ) .
Company fiscal instrument: which is any contract created an plus or a fiscal duty or a right of ownership to another company, such as preferable and option stock with ( AIS 32 & A ; IFRS 7 & A ; IAS 39 ) .
Some revelation demands and the ability of limited liability companies to react to those revelations: Most limited liability companies in Jordan do non pull off their histories accordance right foundations and methodological analysis such as hazard direction, capital direction, plus direction and other histories while the international accounting criterions prepared harmonizing to a footing assume that companies are running their histories accordance those right foundations, Therefore this spread between revelation demands and the world of companies constitutes a barrier to the quality of revelation.
7.1. Chief hypothesis:
Holmium: There is no committedness for limited liability companies with revelation demands and accounting criterions.
HO1: There is no statistical important consequence of Company Control Environment on the degree of revelation in fiscal statement of limited liability companies in Jordan.
HO2: There is no statistical important consequence of Company Accounting Principles and Standards on the degree of revelation in fiscal statement of limited liability companies in Jordan.
HO3: There is no statistical important consequence of Company Financial Position on the degree of revelation in fiscal statement of limited liability companies in Jordan.
HO4: There is no statistical important consequence of Nature of the Company Partners on the degree of revelation in fiscal statement of limited liability companies in Jordan.
HO5: There is no statistical important consequence of Cost of Disclosure on the degree of revelation in fiscal statement of limited liability companies in Jordan.
HO6: There is no statistical important consequence of Economic Sector on the degree of revelation in fiscal statement of limited liability companies in Jordan.
HO7: There is no statistical important consequence of Size of Audit Firm on the degree of revelation in fiscal statement of limited liability companies in Jordan.
HO8: There is no statistical important consequence of Legal Environment on the degree of revelation in fiscal statement of limited liability companies in Jordan.
8.1. Population and Sample
As we see above we have a big population, so the sample must be representative and suited for this size so I will seek to take 20 companies from each economic sector for a sum of 100 companies.
8.2. Data Collection Methods
The survey utilized a primary method of informations aggregation which is a five Point Likert-type Questionnaire Scaled from ( 1 Strongly Agree ) to ( 5 Strongly Disagree ) .
The questionnaire will be distributed to the fiscal director of 100 limited liability companies in Jordan, for extra aid I will distributed the same questionnaire to the Hearers in some auditing houses in Jordan because of their experience in scrutinizing many limited liability companies in Jordan.
8.3. Applied Statistical Methods
Descriptive statistics ( agencies, standard divergence, standard mistake of mean ) will be used to depict the feature of sample and the response to the questionnaire. Statistical Package for Social Science ( SPSS ) will be usage to Analyze and look into the job of the survey utilizing t-test, f-test and ANOVA.