THE IMPACT OF THE QUALITY OF FINANCIAL REPORTS OF JORDANIAN PUBLIC SHAREHOLDING COMPANIES ON INVESTORS' DECISIONS

Abstract

Grounded in agency theory, this study examines the relationship between financial reporting quality and investment decisions within Jordanian public shareholding firms. Adopting a deductive, quantitative, and cross-sectional research design, it employs a structured, close-ended questionnaire to gather data from 50 financial analysts and 150 investors. The data analysis is conducted using the PLS-SEM technique. The findings indicate that financial reporting quality—specifically transparency, relevance, and reliability—exerts a significant influence on investment decisions. Notably, relevance and reliability positively impact investment choices, underscoring the critical need for high-quality financial disclosures. These insights contribute to corporate governance literature by emphasising the fundamental role of financial transparency in emerging markets such as Jordan, where regulatory challenges persist.  The study presents key implications for policymakers, regulatory authorities, and financial institutions, advocating for enhanced disclosure mechanisms to strengthen investor confidence and market efficiency. It further suggests that Jordanian public shareholding firms must uphold financial information quality, as investors rely heavily on such disclosures when making investment decisions.