The Impact of Intangible Assets Efficiency on the Earnings Quality in the Industrial Companies Listed on Amman Stock Exchange

Abstract

      The objective of this study was to investigate the impact of the efficiency of intangible assets on profit quality in the context of the Jordanian industrial companies operating within the business environment. To achieve this fundamental aim, data were collected from 55 industrial companies listed on the Amman Stock Exchange during the period spanning from 2017 to 2021, encompassing a total of 260 observations used for the entire study duration. The study relied on non-tangible resources, human capital, and utilized capital to measure the impact of the independent variable, intangible assets. Furthermore, the dependent variable, profit quality were assessed by calculating the absolute difference between the actual return on assets during the specified period, and the expected return on assets for the same period. Additionally, two control variables were used, namely, market value and company size. The study utilized a multiple regression analysis approach within the E-Views statistical software to examine the hypotheses formulated in the study. The findings demonstrated a substantial influence of intangible assets on profit quality. Also, they revealed the presence of an effect of intangible asset proficiency on profit quality in the presence of company size and market value. Based on the findings of the study, the researchers recommend that companies allocate greater attention to their human capital through enhancing employee knowledge, skills, innovations, and the cultivation of new ideas. This approach is advisable for companies aiming to improve their profit quality and generate additional added value.