The Relationship between Earnings Management and Stock Price Liquidity

Abstract

This study aimed to examine the relationship between Earning's Management and the Stock Price Liquidity for a selected sample of (49) Jordanian Service Companies listed on Amman stock market for The period of (2010-2015), the importance of this study comes from The Obvious effect of Earning's Management on the Companies Performances by manipulating the Financial reports in Positive or Negative way, therefore this study attempted to examine such impact or Relationship between the dependent variable (Stock Liquidity) and The independent variable (Earning's Management), Using the Jones Modified Model (1995) through the description.Analysis to find out The Earning's Management Practice and using The (SPSS) analysis System to Prove The study assumption.The outcomes of this study indicated a non-significant relationship between the Earning's Management and the Stock Price Liquidity in The Jordanian Service Companies. In addition there were the Recommendation of using a concept of linking the corporate Governance with some Earning’s Management, through some Accounting application approved by the international financial Standards to attain the use of positive Earning’s Management within Companies to improve the overall performance and serve all the Users of the financial reports.