The impact of external audit quality on reducing illegal accounting practices of firm size and corporate governance in Jordan

Abstract

The purpose of the study is to investigate the function of external audit quality (EAQ), corporate governance (CG), and firm size in eliminating adulterous accounting practices (AP) in Jordanian businesses. A quantitative research design is used, with data from 50 Jordanian enterprises. Primary data is acquired through surveys issued to auditors, financial managers, and compliance officials, while secondary data is sourced from financial statements and audit reports covering the years 2019-2023. Analyzing numbers can help us understand fraud better. We can look at simple statistics but also check relationships between different variables. This is done using techniques like chi-square tests, t-tests, and logistic regression. The study found that when audit quality is better, fewer fraud cases occur. Large companies, known as the Big Four, seem to be much better at catching and preventing fraud compared to smaller ones. It also appears that the better the company's business ethics and the larger the firm, the less fraud happens. Therefore, these findings offer practical guidance for managers and policymakers who want to reduce fraud and enhance financial integrity in Jordanian companies. Although the results were not entirely conclusive, organizations should encourage auditors to be unbiased and utilize top-notch fraud detection methods to effectively prevent fraud in Jordanian companies.