2020 Vol.21 No.2 Academy of Strategic Management Journal Volume 20, Special Issue 6, 2021 1 Strategic Management & Decision Process 1939-6104-20-S6-74 THE IMPACT OF EARNING MANAGEMENT AND SOCIAL AND ENVIRONMENTAL COSTS DISCLOSURE ON FINANCIAL PERFORMANCE: AN EMPIRICAL STUDY IN JORDAN Yousef Shahwan, Zarqa University Esra’a B. Al-Trad, Applied Science Private University ABSTRACT This research aimed to discover the moderating impact of earnings management between social and environmental costs disclosure on financial performance. To realize this purpose, this research employed a quantitative method by using primary data collected from the Amman Stock Exchange. This study used the questionnaire to collect the data from a sample of 127 companies. The Smart Partial Least Squares (PLS) is used to test the data. The results of the study show that the social and environmental costs disclosure positively and significantly impacted the financial performance of the firms. This was consistent with agency, legitimacy, and stakeholders' theories. This means that more disclosure about the cost of social and environmental information could create opportunities for firms. Also, earnings management was found to have a significant and positive effect on the relationship between social cost disclosure and the financial performance of the firms. And earnings management was found to have a significant and positive effect on the relationship between environmental cost disclosure and financial performance of the firms. Keywords: Earnings Management, Social Cost Disclosure, Financial Performance, Environmental Cost Accounting, CSR, Amman Stock Exchange INTRODUCTION The social and environmental accounting phenomena developed with the need for reports for social accounting from communities close to those from financial markets (Gavurova et al., 2019; Gavurova et al., 2018). Financial information gathered by the framework of financial accounting was needed for this. Users of social accounting information will require details, helping them to determine whether the firm is socially and financially accountable. Green accounting and reporting are a recent practice, outside of social accounting, and has been relatively influenced by the absence of any compulsory codes or rules for compulsory reporting (Nuswantara & Pramesti, 2020). Therefore, in their annual financial reports, firms are voluntarily active in disclosing many corporate responsibility projects. Internationally, it seems that companies have gone further than those found in the literature on important topics (Al-Ramahi et al., 2014). The concern exists here where the firm does not spend on environmental reporting due to a substantially weak knowledge of environmental concerns or a rise in the cost of environmental disclosure. According to Sutopo, et al., (2018), only a few studies have been conducted in the field of environmental accounting such as reporting and its impact on the firm's financial performance (Dvorský et al., 2019; Valaskova et al., 2018; Shahwan & Mohammad, 2016). As a result, most firms are beginning to invest more of their revenue in social programs, leading them to an ambiguous environmental accounting view.