Accounting Conservatism and Profitability of Commercial Banks

Accounting conservatism refers to financial reporting guidelines that require accountants to exercise a high degree of verification and utilize solutions that show the least aggressive numbers when faced with uncertainty. Accounting conservatism is a principle that requires company accounts to be prepared with caution and high degrees of verification. This research aims to identify the effect of Accounting Conservatism on Jordanian Commercial Banks’ profitability for the period between 2010–2019. To test the study hypothesis, the researcher used an analytical approach to describe the financial profitability of the Jordanian banks. The study was applied to a sample of Jordanian banks during the study period. The results showed that there is an acceptable level of accounting conservatism in the Jordanian commercial banks, and the findings concluded that there is a positive correlation between the Accruals scale and returns on equity, as well as the rate of return on assets. The study recommends conducting more studies using other measures of accounting conservatism on Jordanian banks, in general, to ensure that the results of other studies are similar, and to open opportunities for the investors to further progress, success, and improve competitiveness.