Evaluating earnings management before and after the implementation of the IFRS-XBRL taxonomy: evidence from Jordan

Purpose This paper aims to compare “earnings management (EM)” practices proxied by “accrual-based earnings management (AEM) and real earnings management (REM)” in the years before and after the implementation of IFRS electronic financial reporting – XBRL in Jordan. Design/methodology/approach A fixed panel data regression model was used to test the developed hypotheses on a data set of 53 Jordanian finance-listed companies from 2005 to 2024. Findings The analysis shows that the proportions of EM practices have decreased as the implementation of IFRS-XBRL when compared to the years preceding this adoption. The AEM and REM measures suggest that the IFRS-XBRL appears to have a negative relationship with EM practices. The results suggest that the adoption of IFRS-XBRL has been linked to reduced EM following implementation, suggesting that the use of IFRS-XBRL facilitates external oversight and transparency of financial reporting. Originality/value The study offers fresh insights into XBRL adoption and EM, helping firms grasp IFRS-XBRL processes to facilitate compliance and transparency. As one of the few longitudinal empirical studies on XBRL and EM, it addresses the lack of evidence on how this relationship has evolved in developing nations. This study examines whether the introduction of EM criteria into the recent XBRL models leads to EM practices reduction in emerging countries.