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The aim of this research is to assess how accounting conservatism impacts the profitability of insurance firms listed on the ASE for a period between 2018 and 2022, taking into account the effects related to COVID-19. The assessment of the level of accounting conservatism was conducted using the Basu model (J Account Econ 24(1), 3–37, 1997 [1]), and other statistical tests were performed to validate the results utilizing the EViews 13 software. The sample for this study consisted of 19 insurance companies that are listed on the ASE. The study findings indicate the presence of accounting conservatism in the financial reports of these companies, as losses were recognized more promptly compared to profits. The results demonstrated a positive and statistically significant influence of accounting conservatism on both Return on Equity (ROE) and Return on Assets (ROA). However, no significant impact of accounting conservatism on Return on Invested Capital (ROIC) was observed. Furthermore, the outcomes did not reveal any significant effect of the pandemic of COVID-19 on the Jordanian insurance companies’ profitability. Building on these results, the study proposes several recommendations, including the enhancement of accounting conservatism practices by insurance companies to enhance the quality of their financial reports and bolster investor confidence. It is imperative for regulatory authorities to enforce strict adherence to accounting conservatism standards by insurance companies. Additionally, investors and financial analysts should duly consider the influence of accounting conservatism when assessing the financial performance of insurance firms.

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The Impact of Accounting Conservatism on the Profits of Insurance Companies Listed on a Stock Exchange During the COVID-19 Pandemic

  • 章节

  • 发表日期：

    2025年

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  • Ola Khresat,
  • Khaldoun Omar Ali Al Khalayla

摘要

The aim of this research is to assess how accounting conservatism impacts the profitability of insurance firms listed on the ASE for a period between 2018 and 2022, taking into account the effects related to COVID-19. The assessment of the level of accounting conservatism was conducted using the Basu model (J Account Econ 24(1), 3–37, 1997 [1]), and other statistical tests were performed to validate the results utilizing the EViews 13 software. The sample for this study consisted of 19 insurance companies that are listed on the ASE. The study findings indicate the presence of accounting conservatism in the financial reports of these companies, as losses were recognized more promptly compared to profits. The results demonstrated a positive and statistically significant influence of accounting conservatism on both Return on Equity (ROE) and Return on Assets (ROA). However, no significant impact of accounting conservatism on Return on Invested Capital (ROIC) was observed. Furthermore, the outcomes did not reveal any significant effect of the pandemic of COVID-19 on the Jordanian insurance companies’ profitability. Building on these results, the study proposes several recommendations, including the enhancement of accounting conservatism practices by insurance companies to enhance the quality of their financial reports and bolster investor confidence. It is imperative for regulatory authorities to enforce strict adherence to accounting conservatism standards by insurance companies. Additionally, investors and financial analysts should duly consider the influence of accounting conservatism when assessing the financial performance of insurance firms.