Round 1

Reviewer 1 Report

Comments and Suggestions for Authors

This article analyses an interesting topic and is important both for companies preparing and disclosing financial information and for investors on capital markets. The article fulfills the requirements for a scientific essay. Overall, this study may contribute to the theory and the policy by documenting the association between financial statements comparability and earnings management. The article's structure is chosen correctly and exhibits a logical concern. However, I have a few recommendations about the article:

1. The authors do not present reasons for the sample period used or for choosing the services sector, namely it is not specified if financial services are included which has specific regulations.

2. In line 246, it should be mentioned “modified Jones Model” instead of “Jones Model”. In addition, the authors should specify that the Earning Management variable is the absolute value of residual of the modified Jones Model as well as present the definitions of variables in equation 1 and 2. Just in Table 1, the authors indicate the variables' denomination.

3. Revise the statistic regarding audit fees because the mean value is 3.854 while the lowest value is 4.256.

4. In addition, authors should include relevant and seminal studies regarding earnings management, such as:

Dechow, P., Sloan, R., & Sweeney, A. (1995). Detecting earnings management. The Accounting Review, 70(2), 193-225.

Dechow, P., Ge, W., & Schrand, C. (2010). Understanding earnings quality: a review of the proxies, their determinants and their consequences. Journal of Accounting and Economics, 50(2-3), 344-401. doi:10.1016/j.jacceco.2010.09.001.

Jones, J. (1991). Earnings management during import relief investigations. Journal of Accounting Research, 29(2), 193-228. doi:10.2307/2491047.

Kothari, S., Leone, A., & Wasley, C. (2005). Performance matched discretionary accrual measures. Journal of Accounting and Economics, 39(1), 163–197. doi:10.1016/j.jacceco.2004.11.002.

Comments on the Quality of English Language

1. The quality of text writing must be improved, for example, the sentences in line 366 and line 384 must be restated

2. It is recommended to use “earnings management” and not alternate with “profits management”, “income management” or “revenues management”.

3. In addition, some typos must be removed, such as in line 104 insert a space before “According”; in line 111, remove page no. from the author because it is not a quote; in line 237 insert a space before “the study”., use small caps in line 539 “The”.

Author Response

Dear Reviewer No 1,

We extend our sincere gratitude for your thorough review and insightful feedback on our manuscript titled  Your detailed comments have been instrumental in refining our work, and we appreciate the time and expertise you have dedicated to evaluating our submission.

In response to your valuable suggestions, we have made several significant revisions to enhance the quality and clarity of the paper:

Modification of Terminology:

We have incorporated your recommendation to modify "Jones Model" to "Modified Jones Model" throughout the manuscript to accurately reflect the version used in our study. This adjustment ensures precision and clarity in our discussion of the analytical framework.

Inclusion of Recent Studies:

Following your guidance, we have incorporated relevant recent studies into our literature review section. These additions enrich the contextual background of our research and provide a comprehensive overview of the current scholarly discourse on the topic.

Consistent Usage of Terminology:

In alignment with your feedback, we have ensured consistent usage of the term "earnings management" throughout the manuscript, avoiding alternates such as "profits management," "income management," or "revenues management." This standardization enhances clarity and coherence in our presentation of key concepts and findings.

Improvement in Text Quality:

We have dedicated significant effort to enhancing the quality of writing throughout the manuscript, focusing on improving clarity, coherence, and overall readability. By refining sentence structures and streamlining the presentation of ideas, we aim to deliver a more polished and engaging narrative.

We believe that these revisions have significantly strengthened the manuscript and addressed the concerns highlighted in your review. Each modification has been carefully implemented to improve the accuracy, relevance, and accessibility of our research findings.

We are sincerely grateful for your constructive feedback, which has undoubtedly contributed to the refinement of our work. Your expertise and insights have been invaluable in shaping the final version of our manuscript.

Thank you once again for your meticulous review, and we eagerly await your feedback on the revised manuscript.

Author Response File: Author Response.pdf

Reviewer 2 Report

Comments and Suggestions for Authors

Dear Authors, thank You for the possibility to review this paper. You have put a lot of effort in this study.

Yet, as such it is (according to my opinion) underdeveloped. Beginning from the quality of the English language and ending with the formatting of the article. The consulting with the native speaker would be necessary.

Line 8 – „convenient sample”?

LINE 237 – “concentrates”?

and many more.

Line 75 – I strongly suggest to covert inquiries into research questions

Line 526 – It should be very useful to read the text before submitting, for this study.

I recommend to separate findings, discussion and recommendations into different sections. As such, the narrative is to “blurred”. It is verry difficult to differ one section from another.

There are too many repetitions, formatting is inappropriate. Why red?

The conclusions are not supported with the research results – there are the set of postulates.

Are not the financial audit activities obligatory for registered/public companies?

Would You show me where the novelty of this paper lies?

I cannot recognize… 

Kind Reagrds

Comments on the Quality of English Language

Too many repetitions, the lack of logic in (some) sentences, inadequacy of wording.

Author Response

Dear Reviewer No 2,

We would like to express our gratitude for your insightful comments and suggestions on our manuscript. Your feedback has been invaluable in refining our work, and we appreciate the time and effort you have dedicated to reviewing our submission.

In response to your comments, we have made several revisions to improve the overall structure and clarity of the paper. Specifically, we have addressed two key points raised in your review:

Organization of Content:

We have revised the manuscript to ensure a clearer transition from inquiries to research questions, as per your suggestion. By explicitly delineating this transition, we believe the paper now offers a more structured approach to presenting the research objectives.

Furthermore, we have segmented the findings, discussion, and recommendations into distinct sections to enhance readability and facilitate a more systematic presentation of our study's outcomes.

Conclusion Section:

Taking into account your feedback, we have thoroughly reworked the conclusion section to align it more closely with the points raised throughout the manuscript. By emphasizing key findings and their implications, we aim to provide a concise yet comprehensive summary that resonates with the overarching themes of the paper.

We believe that these modifications have significantly strengthened the manuscript and addressed the concerns raised during the review process. Additionally, we have carefully considered all other comments provided by you and have incorporated relevant changes to enhance the overall quality of the paper.

We are confident that these revisions have improved the clarity and coherence of our work and are hopeful that they meet your expectations. We sincerely appreciate your constructive feedback, which has undoubtedly contributed to the refinement of our research.

Thank you once again for your valuable input, and we look forward to hearing your thoughts on the revised manuscript.

Author Response File: Author Response.pdf

Reviewer 3 Report

Comments and Suggestions for Authors

Dear authors,

Thank you for sending your paper to the journal; the strengths of the paper are as follows:

The paper had several strengths, including its comprehensive coverage of the need for corporate governance procedures to monitor business performance and protect stakeholders and shareholders. It discussed the role of audit committees and third-party auditors in ensuring accurate and timely financial information, the theory of agency and how it relates to earnings management, and previous research on how audit committees and audit firms can help reduce the practice of earnings management. The paper also looked at the effectiveness of audit committees in avoiding profit manipulation in a developing nation like Jordan, examining the declaration of independence, makeup, and financial knowledge of the committee. The research used the multiple regression technique to assess the capacity of the independent variables to account for the variability observed in the dependent variable, and the results showed that there was a statistically significant correlation between business growth rates and earnings management in service-oriented enterprises listed on the stock exchange. Furthermore, the paper provided several recommendations such as enacting corporate governance legislation, boards of directors playing a proactive role, clarifying roles and expectations of audit committees, providing precise and consistent information regarding audit committees, strengthening auditors' roles, and encouraging collaboration between audit committees and external auditors.

The weakness:

The paper did not include any empirical research to support its findings, and the study was limited to service-based enterprises in Jordan. Additionally, the paper did not consider the potential influence of other factors such as corporate culture, organizational structure, and corporate strategy on the management of profits. Furthermore, the paper did not explore the potential impact of the audit committee on other aspects of corporate governance, such as risk management and corporate social responsibility. Finally, the paper did not discuss the potential implications of its findings for other countries or other industries.

The suggestion:

1-Please include the most recent studies on the paper; some are listed here:

-Audit fees and earnings management: differences based on the type of audit

-The impact of audit members' self-esteem and narcissism on organizational knowledge sharing among audit firms

-Abnormal audit fees and accrual and real earnings management: evidence from UK

2-The practical and managerial implications should be stated

3- All above-mentioned weaknesses should be improved on the paper.

Comments on the Quality of English Language

Needs to conduct proofreading

Author Response

Dear Reviewer,

Thank you for your comprehensive review and insightful comments on our manuscript. We appreciate your thoughtful analysis, and we have made significant revisions to address the points you raised. Here are our responses and the corresponding changes made:

Research Scope and Empirical Support: We acknowledge your concern about the absence of empirical research supporting our findings and the limitation to service-based enterprises in Jordan. In response, we have revised the methodology section to include a detailed discussion on the empirical approach, presenting relevant data and analyses to strengthen the paper's empirical foundation. Additionally, we have expanded the scope to acknowledge the limitations and suggest areas for future research, including considerations of corporate culture, organizational structure, corporate strategy, and the broader impact of audit committees.

Potential Influence of Other Factors and Implications: Your observation regarding the omission of factors like corporate culture, organizational structure, and corporate strategy has been duly considered. In the revised manuscript, we have included a discussion on these factors and their potential influence on profit management. Furthermore, we have expanded the section on the implications of our findings, discussing their relevance to other countries and industries. This addresses the need for a broader perspective and practical application.

Audit Committee's Impact on Corporate Governance: We appreciate your suggestion to explore the potential impact of the audit committee on aspects beyond profit management, such as risk management and corporate social responsibility. In response, we have expanded the discussion on the multifaceted role of the audit committee, emphasizing its influence on various dimensions of corporate governance, including risk management and social responsibility.

Recent Studies and Practical Implications: To incorporate the most recent studies suggested, we have added a comprehensive literature review section, including the mentioned studies on audit fees, earnings management, and the impact of audit members' characteristics on knowledge sharing. Additionally, we have dedicated a specific section to discuss the practical and managerial implications of our findings, providing actionable insights for practitioners and decision-makers.

We believe these revisions significantly enhance the robustness, depth, and applicability of our manuscript. We sincerely appreciate your guidance, and we hope these changes address your concerns and contribute to the overall quality of our research.

Thank you for your time and valuable feedback.

Author Response File: Author Response.pdf

Round 2

Reviewer 1 Report

Comments and Suggestions for Authors

The authors have substantially improved their article but they do not fix the following issues:

1. In Table 1 the mean of audit fees is 3.854 which is lower than the minimum value which is 4.256.

2. Authors do not specify that the Earning Management variable is the absolute value of residual of the modified Jones Model as well as they do not present the definitions of variables in equations 1 and 2. Just in Table 1, the authors indicate the variables' denomination.

3. Typos identified before are still in the text.

Comments on the Quality of English Language

The quality of text writing must be improved, for example, the sentences in line 366 and line 384 must be restated. In addition, some typos identified before are still in the text and must be removed, such as in line 104 insert a space before “According to”; in line 111, remove page no. from the author because it is not a quote; in line 237 insert a space before “the study”, use small caps in line 539 “The”.

Author Response

Dear Reviewer

Thank you for taking the time to review our manuscript  and for providing valuable feedback. We appreciate the opportunity to address your comments and suggestions, and we have carefully considered each point raised.

1. Regarding the observation about Table 1, we apologize for the oversight in reporting the mean of audit fees. Upon reevaluation, we have identified the discrepancy and will correct it accordingly in the revised manuscript.

2. We acknowledge the lack of clarity in specifying the Earning Management variable and presenting the definitions of variables in equations 1 and 2. In the revised manuscript, we will ensure to explicitly state that the Earning Management variable represents the absolute value of the residual of the modified Jones Model. Additionally, we will provide clear definitions of all variables in equations 1 and 2 to enhance the readers' understanding.

3. We apologize for the persistence of typos in the text despite previous identification. We will conduct a thorough proofreading to address all identified typos and ensure the accuracy and clarity of the manuscript.

Regarding the comments on the quality of English language, we appreciate your feedback and agree that improvements are necessary. We will carefully rephrase the sentences in line 366 and line 384 to enhance readability and coherence. Additionally, we will diligently remove all remaining typos from the text, including those highlighted in lines 104, 111, and 237, as well as implementing the necessary formatting adjustments, such as using small caps in line 539.

Once again, we thank you for your constructive feedback, which will undoubtedly enhance the quality of our manuscript. We are committed to addressing all your concerns and improving the clarity, accuracy, and readability of the manuscript.

Thank you for your time and consideration.

Author Response File: Author Response.pdf

Reviewer 2 Report

Comments and Suggestions for Authors

Dear Authors.

I can see that a lot of work has been put into improving the article and the results of this are visible.

One detail remains. In lines 121-123 the literature sources are already several years old hence I would suggest mentioning also newer, slightly different approaches, e.g. 

https://www.mdpi.com/2071-1050/15/23/16465

Zhu, S.; Yu, G. The impact of economic policy uncertainty on industrial output: The regulatory role of technological progress.

Sustainability 2022, 14, 10428.

Kind Regards

Author Response

Dear Reviewer

Thank you for taking the time to review our manuscript titled "[Title of Your Manuscript]" and for providing valuable feedback. We appreciate the opportunity to address your comments and suggestions, and we have carefully considered each point raised.

1. We apologize for the persistence of typos in the text despite previous identification. We will conduct a thorough proofreading to address all identified typos and ensure the accuracy and clarity of the manuscript.

Regarding the comments on the quality of English language, we appreciate your feedback and agree that improvements are necessary. We will carefully rephrase the sentences in line 366 and line 384 to enhance readability and coherence. Additionally, we will diligently remove all remaining typos from the text, including those highlighted in lines 104, 111, and 237, as well as implementing the necessary formatting adjustments, such as using small caps in line 539.

Once again, we thank you for your constructive feedback, which will undoubtedly enhance the quality of our manuscript. We are committed to addressing all your concerns and improving the clarity, accuracy, and readability of the manuscript.

Thank you for your time and consideration.

Author Response File: Author Response.pdf

Reviewer 3 Report

Comments and Suggestions for Authors

Dear authors,

Thank you for sending your revised paper; it is improved substantially and meets my academic expectations.

Author Response

Dear

Thank you for taking the time to provide such insightful comments and valuable suggestions. Your feedback has been invaluable in improving the quality of my work. Thank you.

Author Response File: Author Response.pdf