A Suggested Model for Employing Accounting Information for Forecasting the Earnings Continuation as a Tool of Earnings Quality

Nidal Omar Zalloum


This study overviews developing a model for employing the financial accounting information for forecasting the earnings continuation as a method of earnings quality. The population of the study includes all the annual reports for Jordanian companies listed in Amman Stock Exchange (ASE) for the period (2002-2012). The sample contains (72) companies divided into (23) services companies and 49 manufacturing companies. The cluster analysis was used and categorized companies in accordance to their earnings quality into three groups: high earnings quality, moderate earnings quality and questionable earnings quality. In addition, multinomial logistic regression was employed in order to check the belonging group of earnings quality for each company. The study concluded to employ a model for calculating the earnings quality.


Accounting Information, Earnings Continuation, Earnings Quality

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