The Extent of Using Income Smoothing Practices in Service Sector in Jordan

Abeer Fayez Al- Khoury, Mohammad Ziad Shakhatreh


The objective of this study is to investigate the extant of using income smoothing practices in services sector of Jordan, using a sample of 45 services company listed on the Amman Stock exchange for the period (2005-2009), for the purposes of achieving the objective of the study the sample have been divided into two group, smoother and non-smoother by using Eckel index, via testing four measures of income: the net operating income, and net income before tax, net income and earnings per share. The study also aimed to investigate the effect of the properties of the company over income smoothing practices, the hypotheses of this study states that there is no income smoothing practices in Jordanian companies, and there is no relationship between the characteristics of the company and income smoothing. The result of this study indicates the existance of income smoothing practices in services sectore in Jordan, through the use of logistic regression analysis showed that there is no relationship between each of the profit and dividend policy with income smoothing in all income measurement, and also found positive relationship between each of the tax payments and Debt with income smoothing at the level of net income, and show a positive relationship between the capital Intensive and the income smoothing at level of net income and earnings per share, and finding indicates that there is a strong negative relationship between audit and income smoothing behavior at all income levels. The researcher recommends to apply the study to all sectors of the Jordanian economy, and overcome the problem of the variety in accounting systems, and the need to extend the study of the causes and motives of management to engage in Income smoothing practices, the expansion also in the study of determinants and factors effecting the policy of income smoothing.


Income Smoothing, Factor Of Income Smoothing, Capital Intensive, Eckel index.

Full Text:



  • There are currently no refbacks.