Asma’a Al-Amarneh

Bank stakeholders, such as creditors, investors, regulators, and other bank stakeholders, expect continuous performance improvement. To achieve this goal, bank managers can use information technology (IT) as a strategic resource to improve their bank’s capabilities and accordingly gain competitive advantage. In this study, the profitability and efficiency of commercial banks in Jordan are compared to investment in information technology (IT). Return on equity (ROE), return on assets (ROA), and net interest margin (NIM) are used to measure bank profitability while controlling for bank size and financial leverage. Cost efficiency is measured using the cost efficiency ratio. The study sample consists of 13 commercial banks listed on the Amman Stock Exchange between 2010 and 2021. To determine the relationship between the variables, descriptive statistics, correlation analysis, the panel least squares approach, and fixed effects multiple regression models are used. The findings show that banks, on average, spend 0.61 percent of their total assets on information technology (hardware and software). Additionally, banks that invest in IT are predicted to perform better over time, as evidenced by their increased profitability and efficiency. Small banks have more IT investment as a percentage of assets than larger banks. In comparison to highly leveraged banks, less leveraged banks typically have a greater IT investment to asset ratio (0.69%). The findings show that profitable banks (measured by ROE) invest more than 1.1% of their total assets in IT. Meanwhile, highly efficient banks also invest more in IT (0.65%) compared to less efficient banks.

Acknowledgment
We are indebted to the Middle East University (MEU) - Jordan ) for the financial support needed for this article.

Type of the article: Research Article

Abstract
This study examines the effect of disclosure of Key Audit Matters (KAM) on accounting and market performance of Jordanian banks listed on the Amman Stock Exchange over the period 2017–2024. The research is relevant because disclosure of audits is at the heart of winning the confidence of investors and corporate governance. The 13-bank panel data are used over the period of eight years, and fixed effects regression with robust clustered standard errors is employed. Two regressions are estimated: accounting performance in the form of return on assets (ROA) and market valuation in the form of Tobin’s Q. These results are suggestive of the fact that more disclosure of KAM has been negatively and significantly connected with ROA (β = –0.176, p < 0.05), implying short-term profitability constraints, but positively and significantly connected with Tobin’s Q (β = 0.285, p < 0.05), implying greater investor optimism and reduced information asymmetry. These results suggest that although KAM disclosures are not expected to directly improve profitability, they enhance market valuation through enhanced disclosure and governance. The results have policy implications for improving disclosure standards to enhance transparency and stability, and for banks to further work on strengthening the independence and qualifications of audit committees to drive performance improvements.

Acknowledgment
The authors would like to thank Middle East University, Amman, Jordan, for the full funding of this research.