Research Article: 2021 Vol: 25 Issue: 4S
Saqer Al-Tahat, Al al-Bayt University
Osama Abdel Moneim, Jerash University
Sulaiman weshah, Al-Balqa Applied University
The present study aimed to demonstrate the intellectual impact of IFRS(15): revenue from contracts with customers on limiting the profit management in Jordanian public shareholding companies, where the study population consisted of (362) Jordanian auditors. (123) questionnaires were distributed to audit offices. The researchers recovered (107) Questionnaire from the study sample, and after reviewing the retrieved questionnaires, it was found that there are (7) questionnaires that are not valid for statistical analysis. Thus, the number of questionnaires valid for analysis has reached (100) questionnaires. The (Skewness & Kurtosis) test was used to test the normal distribution of data, and the (VIF) test was also relied on to ensure that there was no problem of multiple linear relationships (multiple correlation). The study reached many results, the most important of which was the existence of the intellectual impact of the revenue standard from contracts with customer’s standard on limiting the profit management in Jordanian public shareholding companies. As for the most important recommendations, they crystallized in the necessity for those interested in the affairs of the company, including the external auditor, to study and analyze all areas that could be exploited by the administration in managing profits and manipulating financial data. As these areas include recognition, measurement, presentation, disclosure and contract costs as well as the need to train accountants, financial managers and internal auditors on the new developments and accounting controls arising from the application of Financial Reporting Standard No. 15 “Revenue from contracts with customers” and its real intellectual impact in limiting the profit management practices in Jordanian public shareholding companies.
Standard 15, Profits Management, Jordanian Public Shareholding Companies
In 2014, the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) published a common standard that introduces new requirements for the process of recognizing revenue arising from contracts from customers. Whereas, the new financial reporting standard IFRS 15 was applied as of January 1, 2018, which replaced IAS 11 and IAS 18 and their interpretations. At present, revenues are seen as the first factor that must be taken into account when making investment decisions. Moreover, as a result of the emergence of globalization, more and more companies are using (US GAAP) and Financial Reporting Standards (IFRS), which has led to the need for the emergence of a new revenue standard to remove weaknesses and inconsistencies in existing revenue standards.
At the present time, there are many fraud and profit management operations related to the recording of revenues and the time of their recognition (multiple sources of revenue, scheduling of payments, free service, maintenance contracts ... etc.) and the method of accounting proof is still the same, which led companies to circumvent their proven revenues and shade current and future investors. Therefore, this study comes to shed light on the IFRS 15 financial reporting standard related to revenues from contracts with customers, and its role in limiting the phenomenon of profit management in Jordanian public shareholding companies.
The practical importance of the study is highlighted by the fact that it will help provide some indications and signs for stakeholders about the availability of the contents of Standard No. 15 related to revenue from contracts with customers in limiting the management of profits in Jordanian public shareholding companies and then proposing appropriate recommendations.
In our present age, decision-makers and stakeholders face the problem of managing profits in the financial statements of companies, which shows the untrue accounting numbers, that is, misleading the decision-makers, and therefore the purpose of the study is to examine the intellectual impact of the standard of revenue from contracts with customers in limiting the profits management in Jordanian public shareholding companies, therefore, the study problem crystallizes with the following main question:
Main Question
Is there an effect on the intellectual impact of the revenue standard from contracts with customers on limiting profit management in Jordanian public shareholding companies? The following sub-questions are divided from it:
The First Sub-Question
Is there an effect on the intellectual impact of the revenue standard from contracts with customers represented in the recognition in limiting profit management in Jordanian public shareholding companies?
The Second Sub-Question
Is there an effect on the intellectual impact of the revenue standard from contracts with customers represented by the measurement in limiting profit management in Jordanian public shareholding companies?
The Third Sub-Question
Is there an effect on the intellectual impact of the revenue standard from contracts with customers, represented by the Display in limiting profit management in Jordanian public shareholding companies?
The Fourth Sub-Question
Is there an effect on the intellectual impact of the revenue standard from contracts with customers represented by disclosure in limiting profit management in Jordanian public shareholding companies?
The Fifth Sub-Question
Is there an effect on the intellectual impact of the revenue standard from contracts with customers represented by the contract costs in limiting profit management in Jordanian public shareholding companies?
Main Hypothesis
There is no effect on the intellectual impact of the revenue standard from contracts with customers on limiting profit management in Jordanian public shareholding companies. The following sub-hypotheses are divided from it:
H1: There is no effect on the intellectual impact of the revenue standard from contracts with customers represented in the recognition in limiting profit management in Jordanian public shareholding companies
H2: There is no effect on the intellectual impact of the revenue standard from contracts with customers represented by the measurement in limiting profit management in Jordanian public shareholding companies
H3: There is no effect on the intellectual impact of the revenue standard from contracts with customers, represented by the Display in limiting profit management in Jordanian public shareholding companies
H4: There is no effect on the intellectual impact of the revenue standard from contracts with customers represented by disclosure in limiting profit management in Jordanian public shareholding companies
H5: There is no effect on the intellectual impact of the revenue standard from contracts with customers represented by the contract costs in limiting profit management in Jordanian public shareholding companies.
There were many intellectual aspects when defining profit management and the definitions were launched from different backgrounds according to the beliefs of the thinkers who embraced this concept, so we find:
Some concepts of profit management focused on choosing accounting policies, as Schipper defined it as "choosing certain accounting policies to accomplish a predetermined goal" and also (Gaio; Al-Banna & Grace, 2020) said that Profit management represents the manager’s choice of accounting procedures and policies, such as announcing expected earnings and voluntary disclosure of information, and how the assessment of accrual accounting affects earnings in an intended manner. The efficiency of selecting accounting policies is also determined by the efficiency of management in designing and implementing those policies.
(Hassan, 2015) mentioned that managers and accountants found that accrual accounting management is attractive, and the reason for that is that managing profits on an accrual basis is not entirely apparent, and therefore it does not need to be disclosed or justified as it represents their preferred method. Because of its relatively low costs.
And in the same direction, (Scott & Ali, 2019) goes in his definition of it “by giving some managers the possibility to choose accounting policies from generally accepted principles, and it is natural to expect that the policies will be chosen to maximize personal benefit or to maximize unit value.” Perhaps here the high flexibility of accounting that allows the accountant to choose different accounting policies or estimates and within the generally accepted accounting principles, in normal circumstances and situations, but unusual circumstances and situations may force the accountant to choose a specific accounting alternative instead of that used during a certain period.
While some concepts of profit management focused on accounting estimates, as (Healy & Wahlen) defined it as "the managers' use of their personal judgments and estimates in financial reporting and in structuring deals (transactions) to change financial reports, either with the aim of misleading some shareholders about the basic economic performance of the economic unit, Or to influence the contractual results that depend on the announced accounting numbers (Al-Banna & Naama, 2020).
(Merchant & Rockness) also defines it as "the work undertaken by the administration to influence the announced financial data, which will not add any real economic advantage to the economic unit, and its impact, may be detrimental to it in the long run (Jassim, 2018).
As for the concepts that dealt with the pessimistic aspect of profit management, we can find it in the concept presented by each of (Mulford & Comiskey), “Active manipulation of profits towards a predetermined goal, which may be set by (previously) or predicted by financial analysts, or they are the sums that achieve a smooth flow. From this, it is clear that profit management is an undesirable accounting practice in several aspects, namely: (Al-Banna & Naama, 2020).
1. Managers ’choice of accounting policies that achieve their personal benefits that meet or match the expectations of financial analysts and other stakeholders.
2. Exploiting gaps in (GAAP) and using their judgments and personal estimates of some accounting measures arbitrarily.
3. Misleading the stakeholders (all or some of them) about the basic economic performance of the unit, especially when the managers have information that is not available to other stakeholders (information asymmetry), thus avoiding transparency in the delivery of information and would be monopolizing it.
From the above, it becomes clear to researchers that profit management can be used to achieve personal benefits or to maximize the value of the unit, depending on its connection to the specific goal desired to be achieved from these accounting practices, whether within the limits of acceptable principles or outside them, to influence the accounting figures disclosed (by increasing or decreasing).
In order to practice profit management methods, the following conditions must be met (parfet & Jassim, 2018)
1. Segregation between ownership and management.
2. The existence of a relationship between the profits that are achieved and the benefit of those entrusted with the management.
3. The freedom of management to choose between alternatives and different accounting methods.
4. That the administration has the authority that enables it to take administrative decisions.
Motives for Profit Management
There are two motives for managing profits: (Ali & Al-Noor, 2014, 140) (Al Samara et al., 2017)
Opportunistic Motivation
This Motivation is when realizing self-benefits related to the company's management, and the profit management has a fundamental influence on its true position.
Efficiency Motivation
Here, the motivation is through directly affecting the users of the financial statements and accounting information by showing the company in a way that achieves a balance between the return and the degree of risk, with the aim of ensuring the survival and continuity of the enterprise in the competitive market. The motives for profit management can be divided here into three main motives, each of which may involve the opportunistic motive or the efficiency motive, or the two of them together as follows: -
A. Contractual Incentives for Profit Management
Noting that when the contract between the company and other parties is based on the accounting results, managers have an incentive to manage profits, and the incentives for contracting are: -
1. Debt charters
2. Maximize the management bonus
3. Meeting the terms of the loans
4. Job Safety
5. Gaining advantages when negotiating with unions
B. Market Incentives for Profit Management
Many of the incentives of profit management are linked to the stock market, especially the market prices of the company's shares, so the profit management intervenes to report figures for accounting profit that are consistent with the forecasts of profits published by market analysts, or to raise stock prices when compensation is determined based on these prices at a specific date, As in the case of stock choosing or to increase the market price in the case of initial stock offerings.
C. Regulatory Incentives
Organizational incentives for profits management arise when there is a belief that declared profits have an effect on the work of legislators or government officials. Thus, by managing the results of operations, managers can influence the work of legislators or government officials, which reduces political pressure and the impact of legislation on the facility. Therefore, establishments that are of interest to the state and public opinion may be subject to government decisions that impose political costs on them, which leads to The large fluctuations in the profits of these establishments may attract the government's attention, in that the fluctuations in profits, which take the form of a large increase, may be seen as an indicator of monopolism, but if the fluctuations take the form of a large decrease in profits, it may be seen as an indicator of the establishment's insolvency and turmoil, which prompts the state to intervene in both cases.
Results of intellectual convergence of professional organizations in highlighting IFRS 15 - Revenue from contracts with customers:
On May 28, 2014 and as a result of joint cooperation between the (FASB) and the (IASB), IFRS 15 - Revenue from contracts with customers was issued with the aim of (Edwards, 2016; Godwin, 2016):
1. Eliminate inconsistencies and weaknesses in the current literature on revenue recognition.
2. Provide a more robust framework to address revenue recognition issues.
3. Improve revenue comparability in practices across all industries and capital markets.
4. Reducing the complexity of applying revenue recognition requirements by reducing the size of the relevant standards.
5. Providing more useful information to users through the new detection requirements.
6. Improve the financial reports on revenues.
7. Improving the comparison between the most important financial statements on the global level.
In response to these challenges, boards of directors have developed new and completely convergent requirements for revenue recognition in both IFRS and GAAP in the United States of America, thus providing significant improvements in the quality and consistency of how revenue is reported while improving comparability in corporate financial statements which uses reports based on IFRS and GAAP in the United States of America (Edwards, 2016).
The joint intellectual cooperation project indicated that revenue is a vital measure for users of financial data, so that it is used to assess the financial performance and expectations of companies. However, the previous requirements for both IFRS and GAAP in the United States are different. Which resulted in a different accounting for transactions that were economically similar. Moreover, the revenue recognition requirements for IFRSs lacked important details, while the accounting requirements for GAAP in the United States were considered to be excessive in contradiction and inconsistency in some areas.
The researchers believe that if the data and ideas of this standard were taken into consideration and applied in practice, it would undoubtedly solve many problems in accounting policies and profit management related to the recognition of complex revenues and overcome all the difficulties that were faced by accountants in companies in highlighting the real reality of the recognition of revenues that give Important information for those who have a direct and indirect relationship with those establishments or companies.
(Khamis, 2016) believes that the reason for the emergence of the need for the new standard is represented by the following values:
1. Improving the revenue recognition process in order to develop a conceptual framework for revenue recognition that would improve the financial reporting process by addressing the deficiency in IFRSs in specific instructions for some transactions.
2. Limiting excessive rules of (GAAP).
3. Correcting inconsistencies and weaknesses in current standards.
4. Meeting the needs arising from complex revenue transactions and exploiting them with profit management methods by corporate managers.
Steps specific to Standard (No. 15) related to when it is applied, its reasons and its relationship to profit management:
The IFRS15 revenue recognition form is based on five steps:
The first step: Define the contract with the customer.
The second step: Determine the pledges or obligations to be performed under the contract.
The third step: Determine the transaction price.
The fourth step: allocating the transaction price to the terms and components of the contract.
The fifth step: revenue recognition when the company fulfills its obligations under the contract.
From the researchers' point of view, the methods of fraud and profit management and their forms have become common in recent times, and it is possible that the administration may resort to them to cover certain aspects at the expense of others, but it is necessary to control matters and confront these crimes and work to reduce them by adopting modern and assertive internal and external control systems and methods to punish everyone who does this, and it can also be confronted with modern accounting methods and policies whose aim is to advance the profession of accounting and access to financial information from the financial statements that are credible and transparent, that is the goal that all end-users aspire to be from investors and Governmental agencies, employees, and many others, and all of that is conducive to achieving the goal of this study.
Study Population and Sample
The study population consists of Jordanian auditors of (362) auditors. (123) questionnaires were distributed to audit offices from the study sample, from which the researcher retrieved (107) questionnaires, and after reviewing the retrieved questionnaires, it was found that there are (7) questionnaires that are not valid for statistical analysis. Thus, the number of questionnaires valid for analysis had reached (100).
Characteristics of the Study Sample
Table No. (1) shows the demographic characteristics of the individuals responding to the questionnaire questions, which consist of academic qualification, scientific specialization, job title, professional certificates and years of work experience, i.e., the distribution of the study sample according to its variables, as follows:
| Table 1 Distribution of The Sample Members According to Personal Variables |
|||
|---|---|---|---|
| Variable | Level | Frequency | Percentage |
| Qualification | Intermediate diploma | 10 | 10 |
| Bachelor | 68 | 68 | |
| M.Sc. | 14 | 14 | |
| PhD | 8 | 8 | |
| Total | 100 | 100 | |
| Scientific specialization | Accounting | 77 | 77 |
| Business Administration | 7 | 7 | |
| Banking and Financial Sciences | 10 | 10 | |
| Economy | 4 | 4 | |
| Other | 2 | 2 | |
| Total | 100 | 100 | |
| Job title | Main Auditor | 23 | 23 |
| Auditor | 44 | 44 | |
| Assistant auditor | 33 | 33 | |
| Total | 100 | 100 | |
| Professional Certificates | JCPA | 53 | 53 |
| CPA | 12 | 12 | |
| None | 35 | 35 | |
| Total | 100 | 100 | |
| Years of Experience | From 5 years or less | 22 | 22 |
| From 5 years - less than 10 years | 37 | 37 | |
| From 10 years - less than 15 years | 23 | 23 | |
| Over 15 years | 18 | 18 | |
| Total | 100 | 100 | |
It appears from Table (1) that the study sample is qualified to answer the paragraphs of the questionnaire and to be relied upon, and thus can be relied upon in their answer, which enhances and strengthens the results of this study.
Test of Validity and Reliability of the Study Instrument
The validity of the content of the instrument used in the study was verified by presenting it to a group of experienced and qualified faculty members and departments in the companies, totaling (7), to express an opinion in each field of study and the drafting of paragraphs and the extent to which each paragraph is related to its field, As some of the questions were modified, others were deleted, and new ones were added to conform to the proposals and observations of the arbitrators. Thus, the study instrument (the questionnaire) became in its final form consisting of (34) paragraphs distributed into (6) fields.
While the stability of the study instrument means the stability, reliability and predictability of the results; That is, the extent of compatibility or consistency in the results of the questionnaire, as it was applied more than once in similar conditions. To calculate the stability of the study instrument, the study instrument was divided into six fields to measure the reliability of each field and for the instrument as a whole. The internal consistency test (Cronbach Alpha) was used for the answers of the study sample obtained, and alpha can be interpreted as the internal stability factor between the answers., And its high value indicates the degree of high stability, and the statistically acceptable value for this scale is (60%) or more (Sekaran & Bougie, 2017), and in other studies the statistically acceptable value is (70%) or more, and it is evident from the results of data analysis in Table (1) The result of the stability of the study paragraphs is high.
| Table 2 Internal Consistency Coefficients (Cronbach Alpha) for Each Field of the Study Instrument and for the Instrument as a Whole |
||
|---|---|---|
| Field | Paragraph numbers | (Cronbach alpha) |
| The independent variable: The revenue criterion from contracts with customers | ||
| - Recognition | 5 | 0.805 |
| -Measurement | 4 | 0.803 |
| -Display | 5 | 0.888 |
| -Disclosure | 6 | 0.875 |
| -Contract costs | 4 | 0.816 |
| Dependent variable: profit management | 10 | 0.896 |
| The instrument as a whole | 34 | 87.1 |
Table (2) shows that all the values of the Cronbach alpha coefficients were high and that the stability of the study paragraph as a whole was high, reaching (87.1), which indicates that the study instrument has high reliability (stability).
Normal Distribution
Table (3) shows the result of the normal distribution test for the data, where the (Skewness & Kurtosis) test was used, and the results were as follows:
| Table 3 The Result of The Normal Distribution Test |
||
|---|---|---|
| Field | Skewness | Kurtosis |
| Recognition | -0.629 | -0.325 |
| Measurement | 0.939 | 0.39 |
| Display | -1.236 | 1.679 |
| Disclosure | 0.464 | -0.186 |
| Contract costs | -1.341 | 1.854 |
| Profit management | -0.471 | -0.931 |
It appears from Table (3) that the test value for Skewness is between (1.96) and the value of the Kurtosis test lies between (± 2.85), so the distribution of the data is subject to a normal distribution (Hair, Black, Babin & Anderson, 2010)
Test for interference (correlation) between independent variables
Table (4) shows the value of VIF and Tolerance
The First Hypothesis
The (VIF) test was relied on to ensure that there is no problem of multiple linear relationships (multiple correlation), because it is considered a problem as one of the issues facing the statistical estimation of the regression coefficients, and Table (4) shows the results of the test for VIF:
| Table 4 The Value of VIF and Tolerance |
||
|---|---|---|
| Field | VIF | Tolerance |
| Recognition | 1.076 | 0.929 |
| Measurement | 1.055 | 0.948 |
| Display | 1.031 | 0.97 |
| Disclosure | 1.019 | 0.981 |
| Contract costs | 1.007 | 0.993 |
The above table shows that there is no multiple correlation problems between the independent variables being less than 5, thus accepting the level of variance in each of the independent variables.
Discussion of the study’s results:
Main Hypothesis
There is no effect on the intellectual impact of the revenue standard from contracts with customers on limiting profit management in Jordanian public shareholding companies. To test this hypothesis, multiple regression analysis was used to identify the relationship between the intellectual impacts of the revenue standard from contracts with customers represented by (recognition, measurement, Display, disclosure, contract costs) in limiting profit management in Jordanian public shareholding companies.
Table No. (5) shows that the value of Adj. R2 reached 0.576, which means that the independent variables explain 57.6% of the variance in the dependent variable. Likewise, the value of F=27.874 and in statistical significance at the level of 0.000 confirms that there is a strong and statistically significant relationship between the intellectual impact of the revenue standard from contracts with customers represented by (recognition, measurement, Display, disclosure, contract costs) in limiting profit management in Jordanian public shareholding companies.
Thus, we reject the main null hypothesis, and accept the alternative hypothesis, which states: "There is an intellectual impact of the revenue standard from contracts with customers in limiting the management of profits in Jordanian public shareholding companies."
| Table 5 Multiple Regression Analysis |
|||
|---|---|---|---|
| value F | 27.874 | F Statistical significance | 0 |
| Adj. R2 | 0.576 | R2 | 0.597 |
| Durbin-Watson | 2.063 | Number of watches | 100 |
| Independent variable | value β | value t | Statistical significance |
| Constant | 12.177 | 13.519 | 0 |
| Recognition | -0.303 | -3.148 | 0.002 |
| Measurement | -0.37 | -4.007 | 0 |
| Display | -0.661 | -8.446 | 0 |
| Disclosure | -0.382 | -4.701 | 0 |
| Contract costs | -0.575 | -5.865 | 0 |
Results Related to the First Sub-Hypothesis
There is no effect on the intellectual impact of the revenue standard from contracts with customers represented in the recognition in limiting profit management in Jordanian public shareholding companies.
The result of the multiple regression showed an inverse relationship between recognition on the intellectual impact of the revenue standard from contracts with customers and was found to be statistically significant, as the result indicates that an increase in the independent variable by 1% leads to a decrease of the dependent variable by (0.303) units, thus we reject the null hypothesis and accept the alternative hypothesis "There is an effect on the intellectual impact of the revenue standard from contracts with customers represented in the recognition in limiting profit management in Jordanian public shareholding companies."
Results Related to the Second Sub-Hypothesis
There is no effect on the intellectual impact of the revenue standard from contracts with customers represented by the measurement in limiting profit management in Jordanian public shareholding companies.
The result of the multiple regression showed an inverse relationship between the measurement on the intellectual impact of the revenue standard from contracts with customers and was found to be statistically significant, as the result indicates that an increase in the independent variable by 1% leads to a decrease of the dependent variable by (0.370) units, thus we reject the null hypothesis and accept the alternative hypothesis " There is an effect on the intellectual impact of the revenue standard from contracts with customers represented by the measurement in limiting profit management in Jordanian public shareholding companies."
Results Related to the Third Sub-Hypothesis
There is no effect on the intellectual impact of the revenue standard from contracts with customers, represented by the Display in limiting profit management in Jordanian public shareholding companies.
The result of the multiple regression showed an inverse relationship between the Display on the intellectual impact of the revenue standard from contracts with customers and was found to be statistically significant, as the result indicates that an increase in the independent variable by 1% leads to a decrease of the dependent variable by (0.661) units, thus we reject the null hypothesis and accept the alternative hypothesis " There is an effect on the intellectual impact of the revenue standard from contracts with customers, represented by the Display in limiting profit management in Jordanian public shareholding companies.
Results Related to the Fourth Sub-Hypothesis
There is no effect on the intellectual impact of the revenue standard from contracts with customers represented by disclosure in limiting profit management in Jordanian public shareholding companies.
The result of the multiple regression showed an inverse relationship between the disclosure on the intellectual impact of the revenue standard from contracts with customers and was found to be statistically significant, as the result indicates that an increase in the independent variable by 1% leads to a decrease of the dependent variable by (0.382) units, thus we reject the null hypothesis and accept The alternative hypothesis " There is an effect on the intellectual impact of the revenue standard from contracts with customers represented by disclosure in limiting profit management in Jordanian public shareholding companies.
Results Related to the Fifth Sub-Hypothesis
There is no effect on the intellectual impact of the revenue standard from contracts with customers represented by the contract costs in limiting profit management in Jordanian public shareholding companies
The result of the multiple regression showed an inverse relationship between contract costs on the intellectual impact of the revenue standard from contracts with customers and was found to be statistically significant, as the result indicates that an increase in the independent variable by 1% leads to a decrease of the dependent variable by (0.575) units, and thus we reject the null hypothesis and accept The alternative hypothesis: " There is an effect on the intellectual impact of the revenue standard from contracts with customers represented by the contract costs in limiting profit management in Jordanian public shareholding companies.
1. The need for supervisory authorities, headed by the Jordanian Association of Certified Public Accountants, to hold workshops, lectures and training programs, to explain the recent trends of Financial Reporting Standard No. 15 “Revenue from Contracts with Customers.”
2. The need for those interested in the affairs of the company, including the external auditor, to study and analyze all areas that the management could exploit in managing profits and manipulating financial data, as these areas include recognition, measurement, display, disclosure and contract costs.
3. Emphasizing the commitment of all accounting controls for the contract with the customers for fear of exploiting the companies ’management in the related aspects, especially those related to the verbal or written agreement between the parties to the contract, or preventing the re-evaluation of the controls that are committed to, with the aim of limiting the practices of profit management.
4. The necessity for the company to increase the level of quantitative and qualitative disclosure of all operations that were carried out in accordance with Financial Reporting Standard No. 15 “Revenue from Contracts with customers” to limit profit management practices.
5. Paying Attention to distinguishing the additional costs resulting from obtaining the contract with the customers, and to prove them on the assets side in the event that the company expects to recover them to limit the revenue inflated, which is considered a profit management practice.
6. Training the internal accountants, financial managers and auditors on the accounting developments and controls arising from the application of Financial Reporting Standard No. 15 “Revenue from Contracts with Customers” and its real intellectual impact on limiting profit management practices in Jordanian public shareholding companies.
This study shows the Intellectual orientations of the International Financial Reporting Standard No. IFRS15, and its real importance in limiting the profit management in Jordanian public shareholding companies, which resort these creative practices to show their profits untrue numbers, which comes from emphasizing a commitment to all accounting controls in the contract with the customer for fear of exploitation of companies’ management in related aspects, especially those related to the verbal or written agreement between the parties to the contract, or preventing the re-evaluation of the controls that are committed to them, with the aim of limiting the practices of profit management. In addition to the need for the company to increase the level of quantitative and qualitative disclosure about all operations in accordance with Financial Reporting Standard No. 15 “Revenue from contracts with customers” to limit profit management practices.