Abstract:
The main objective of this study is to investigate the extent to which the phenomena of "income smoothing" exists across Jordanian firms listed in Amman Stock Exchange, and to make predictions about the use of accounting techniques that lead to income smoothing behaviour. The research assumes that the net income numbers which are disclosed by Jordanian firms do not show reality, and do not actually reflect the earning variability. The selection of this problem is based on the importance of the subject, and because of scarcity of research about income smoothing phenomena in Jordan. Therefore, beside the main objective mentioned above, this study attempts to make possible comparisons between industrial and service sectors, and to find the effect of firm size on income phenomenon, The research hypotheses assume the relative incidence of income smoothing phenomena in both industrial and service sectors and expects significant differences between the two sectors, and among different sizes of firms across the two sectors, The results of this study confirm the income smoothing incidence hypothesis, but are inconclusive regarding the significant differences between sectors, and among various sizes of firms in applying the income smoothing techniques.
