The impact of external auditor size on the relationship between audit committee effectiveness and earnings management

This research aims to explore new evidence on the nature of the relationship between the effectiveness of audit committee and earnings management in one of the emerging economies, Jordan. In addition, it investigates how external auditor size might moderate this relationship. For this purpose, a panel data consisting of 64 industrial firms listed on Amman Stock Exchange (ASE) is used, covering the period between 2009 and 2014. An index consisting of four characteristics is developed to measure the effectiveness of audit committee, namely audit committee independence, size, meetings and financial expertise. Results show that audit committee effectiveness has a significant and negative impact on earnings management. Moreover, a positive interaction effect of external auditor size and audit committee effectiveness on earnings management is found, which is supportive of the substitute relationship between the external auditor size and effective audit committee in reducing earnings management. Policy makers and professional accounting bodies in Jordan might benefit from these results, as they show that legislative reforms can motivate firms to adopt good governance practices to mitigate earnings management

The effect of brand experiences and relational benefits on loyalty in the fast-food restaurants

Purpose The aim of this study is to examine the role of relational benefits and brand experience measurements on willingness to pay more (WPM), effects of word of mouth (WOM) and repurchase intention (RI) in fast-food restaurants (FFR). Design/methodology/approach Employing an online questionnaire survey with a sample size of 503 respondents, the quantitative methodology included multiple regression and factor analysis to facilitate the analyses of data. Findings Relational benefits and their dimensions (confidence, special treatment and social benefits) found to positively impact WPM, WOM and RI. With reference to brand experiences, the current study found that behavioural and intellectual experiences have significant and positive effects on WPM, WOM and RI. Surprisingly, no positive significance was identified between sensory experiences and WPM, WOM and RI. Practical implications The findings show that relational benefits and brand experience dimensions play an essential role in improving brand loyalty. Originality/value The current study subscribes to the concept of relationship marketing theory, suggesting that loyalty to FFRs can be enhanced by offering customers relational benefits and augmenting their brand experiences