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This study intends to investigate how accounting conservatism (AC) impacts the quality of earnings and to determine the mediating role of net assets. The study focused on Royal Jordanian Airlines (RJA) and analyzed data from the years 2017 to 2021. Structural modeling software (Smart PLS) is utilized to test the hypotheses. The findings reveal that AC has an influential impact on the quality of earnings as measured by the model, as well as on net assets. Furthermore, net assets are found to mediate the relationship between earnings quality and accounting conservatism. However, in the case of RJA, net assets do play a mediating role in impacting AC the quality of earnings according to the models used. Based on these results, it is recommended that decision-makers at RJA activate the supervisory authority responsible for overseeing the financial reporting process. They should also enforce the implementation of reasonable levels of accounting conservatism, which would enhance the reliability of the information presented in the financial statements and benefit all users.

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The Impact of Accounting Conservatism on the Earnings Quality and the Net Assets’ Mediating Role: Royal Jordanian Airlines as a Case Study

  • 章节

  • 发表日期：

    2025年

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  • Ola Muhammad Khresat,
  • Ali Mousa Al-Hayari

摘要

This study intends to investigate how accounting conservatism (AC) impacts the quality of earnings and to determine the mediating role of net assets. The study focused on Royal Jordanian Airlines (RJA) and analyzed data from the years 2017 to 2021. Structural modeling software (Smart PLS) is utilized to test the hypotheses. The findings reveal that AC has an influential impact on the quality of earnings as measured by the model, as well as on net assets. Furthermore, net assets are found to mediate the relationship between earnings quality and accounting conservatism. However, in the case of RJA, net assets do play a mediating role in impacting AC the quality of earnings according to the models used. Based on these results, it is recommended that decision-makers at RJA activate the supervisory authority responsible for overseeing the financial reporting process. They should also enforce the implementation of reasonable levels of accounting conservatism, which would enhance the reliability of the information presented in the financial statements and benefit all users.