Volume 9, Issue 4, December 2014, Pages 1472–1484
Bahaaeddin Alareeni1 and Omar Aljuaidi2
1 Department of Accounting, University College of Applied Sciences, Gaza, Palestine
2 Department of Accounting, University College of Applied Sciences, Gaza, Palestine
Original language: English
Copyright © 2014 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
This study attempts to find out if the Modified Jones (1995) and Yoon et al., (2006) models are effective in detecting earnings management in an emerging economy as Palestine. The study also compares the Modified Jones (1995) model with the Yoon et al., (2006) model. That is to give an overview of the best model in detecting earnings management practiced by listed companies in the PEX. The study results shows that the Yoon et al., (2006) model is better than the Modified Jones (1995) model in detecting earnings management in the Palestinian's context, and the Modified Jones (1995) model is very poor. Additionally, the results proves that the effectiveness of the Yoon et al., (2006) model is also weak compared to other studies done in other countries (Yoon and Miller, 2006; Yoon et al., 2006; Islam et al., 2011). Consequently, developing new models is vital to be used in detecting earnings management in Palestinian's context.
Author Keywords: earnings management, discretionary and non-discretionary accruals, effectiveness, efficacy, the explanatory power.
Bahaaeddin Alareeni1 and Omar Aljuaidi2
1 Department of Accounting, University College of Applied Sciences, Gaza, Palestine
2 Department of Accounting, University College of Applied Sciences, Gaza, Palestine
Original language: English
Copyright © 2014 ISSR Journals. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract
This study attempts to find out if the Modified Jones (1995) and Yoon et al., (2006) models are effective in detecting earnings management in an emerging economy as Palestine. The study also compares the Modified Jones (1995) model with the Yoon et al., (2006) model. That is to give an overview of the best model in detecting earnings management practiced by listed companies in the PEX. The study results shows that the Yoon et al., (2006) model is better than the Modified Jones (1995) model in detecting earnings management in the Palestinian's context, and the Modified Jones (1995) model is very poor. Additionally, the results proves that the effectiveness of the Yoon et al., (2006) model is also weak compared to other studies done in other countries (Yoon and Miller, 2006; Yoon et al., 2006; Islam et al., 2011). Consequently, developing new models is vital to be used in detecting earnings management in Palestinian's context.
Author Keywords: earnings management, discretionary and non-discretionary accruals, effectiveness, efficacy, the explanatory power.
How to Cite this Article
Bahaaeddin Alareeni and Omar Aljuaidi, “The Modified Jones and Yoon Models in Detecting Earnings Management in Palestine Exchange (PEX),” International Journal of Innovation and Applied Studies, vol. 9, no. 4, pp. 1472–1484, December 2014.
