scholarly journals Effect of earnings management on earnings predictability in information signaling perspective

2018 ◽  
Vol 22 (2) ◽  
pp. 173
Author(s):  
Alex Johanes Simamora
Keyword(s):  
Earnings Management ◽  
Market Share ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Research Use ◽  
Financial Health ◽  
Discretionary Accrual ◽  
Information Signaling ◽  
Earnings Predictability ◽  
Research Period

This research is aimed to examine (1) effect of discretionary and innate accrual on earnings predictability (2) effect of market share and financial health on relationship between real earnings management and earnings predictability. This research use manufacture firms listed in Indonesian Stock Exchange 2003-2015 as research sample, with 2013-2014 as research period. Accrual earnings management is measured by discretionary and innate abnormal accrual. Real earnings management is measured by aggregate of abnormal cash flow of operation, abnormal production, abnormal discretionary expenses. As expected, discretionary accrual as opportunist act does not support earnings predictability, while innate accrual as information signaling of business model improves earnings predictability. Real earnings management as information signaling of market share and financial health improves earnings predictability as well. In general, earnings management as information signaling is more likely to communicate condition of firm and leads to informativeness of earnings.

scholarly journals EARNINGS MANAGEMENT AND FUTURE EARNINGS

2019 ◽  
Vol 16 (2) ◽  
pp. 141-164
Author(s):  
Alex Johanes Simamora ◽  
Keyword(s):  
Earnings Management ◽  
Market Share ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Financial Health ◽  
Future Earnings ◽  
Auditor Quality ◽  
Effect Regression ◽  
Negative Effect ◽  
The Cost

Abstract This research is aimed to examine the moderating effect of the cost of earnings management on the relationship between earnings management and future earnings. Research samples are manufacture companies listed in Indonesia Stock Exchange 2013-2015. The cost of accruals earnings management is auditor quality, while the costs of real earnings management are the market share and financial health. Based on the fixed effect regression test, auditor quality strengthens the positive effect of accruals earnings management on future performance, while market share and financial health weaken the negative effect of real earnings management on future earnings. It indicates that in the context of efficient contracting, high quality auditor provide better signal for earnings prediction compared to the low quality auditor. In addition, higher market share and higher financial health limit opportunistic real earnings management to reduce future earnings.

scholarly journals IFRS ADOPTION AND EARNINGS MANAGEMENT PRACTICE: EVIDENCE FROM INDONESIA COMPANIES

2019 ◽  
Vol 7 (2) ◽  
pp. 229-239
Author(s):  
Vina Kholisa Dinuka
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Stock Exchange ◽  
Management Practice ◽  
Real Earnings Management ◽  
Manufacturing Companies ◽  
Discretionary Accrual ◽  
Ifrs Adoption ◽  
Negative Effect ◽  
Ifrs Implementation

The purpose of this study is to verify IFRS contribution by examining the presence of Accrual Earnings Management (AEM) and Real Earnings Management (REM) in the period pre- and post- IFRS implementation in manufacturing companies in Indonesia. AEM is measured by absolute value of discretionary accrual, while REM is proxied by three measurements of REM, they are abnormal cash flow operation, abnormal production and abnormal discretionary expenses. The sample is taken from Indonesia stock exchange in 2009-2011 and 2013-2015. 2012 is Indonesia adoption period and it is excluded from the sample, because it is considerated as transitory year. This study uses regression analysis and Paired t-test to compare the presence of AEM and REM preceding and following IFRS implementation. The findings reveal that IFRS adoption has significantly negative effect towards AEM and REM. It indicates that the following IFRS implementation, AEM and REM are decrease. Therefore, IFRS is able to reduce earnings management practices in manufacturing companies in Indonesia both for AEM and REM.

scholarly journals Real Earnings Management, Firm Performance, and Corporate Governance Mechanism

2021 ◽  
Vol 3 (2) ◽  
pp. 39-49
Author(s):  
Maria Stefani Osesoga ◽  
Rosita Suryaningsih ◽  
Febryanti Simon
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Earnings Management ◽  
Cash Flow ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Governance Mechanism ◽  
Discretionary Accrual ◽  
Corporate Governance Mechanism ◽  
The Impact

The purpose of this study is to analyze the impact of real earnings management on firm performance and the impact of corporate governance as an intervening variable in the relationship between real earnings management and firm performance. The object are companies include in Corporate Governance Perception Index during 2015-2019 and listed in Indonesia Stock Exchange (IDX) and analyzed by using path analysis method. Real earnings management has a significant effect on the firm performance. Furthermore, with corporate governance mechanism within the company, real earnings management significantly affect firm performance. This research is meaningful, but has limitations. The result cannot be generalizing because the sample only companies that listed in CGPI and IDX period 2015-2019. The research implication are as follows: top level management should be cautious about credit policy, cash flow from operation, discretionary expenditures, and production. Earnings management is one of variable that the most prevalent in recent studies but the proxy for earnings management in the recent studies used discretionary accrual. In this research, real earnings management is used to indicate earnings management which measured by abnormal cash flow from operation. Thus, it may provide some contribution to the literature.

scholarly journals Earnings Management: An Advantage or Disadvantage?

2017 ◽  
Vol 2 (2) ◽  
pp. 64-72
Author(s):  
Paulina Sutrisno
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Cash Flows ◽  
Jel Classification ◽  
Real Earnings Management ◽  
Return On Assets ◽  
Discretionary Accrual ◽  
Price Discounts ◽  
Current Period ◽  
Operating Cash Flows

Objective - The purpose of this research is to examine the consequences of accrual based earnings management and real earnings management on future operating performance.The firms studied engage in accrual-based earnings management with discretionary accrual measures using the modified Jones model and some of the following real earnings management activities: (1) Sales manipulation that accelerates the timing of sales through increased price discounts or cutting prices to boost sales in the current period; and/or (2) cutting of discretionary expenditures to increase income in the current period. Furthermore, the study examines the extent to which discretionary accrual and real earnings management affects subsequent operating performance (as measured by both return on assets and operating cash flows). Methodology/Technique - The sample manufacturing firms that engage in financial statement were listed on the Indonesian Stock Exchange between 2012 and 2014. The hypothesis testing method used in this research is multiple regression linear. Findings - The results suggest that accrual-based earnings management, with discretionary accrual measures, and real earnings management through sales manipulation and discretionary expenditures are positively associated with return on assets after one and two years. Meanwhile, accrual-based earnings management and real earnings management through sales manipulation enhances subsequent operating cash flows. However, real earnings management through discretionary expenditures does not influence operating cash flows. Novelty - This research contributes to the existing literature on the subsequent impact of accrual-based earnings management and real earnings management Type of Paper: Empirical Keywords: Discretionary Accrual; Sales Manipulation; Discretionary Expenditure; Return on Assets; Operating Cash Flows JEL Classification: M21, M41.

Pengaruh Hubungan Politik Terhadap Manajemen Laba Pada Perusahaan Sektor Jasa Dengan Variabel Kontrol Ukuran Perusahaan Dan Kualitas Audit

2018 ◽  
Vol 16 (2) ◽  
pp. 30
Author(s):  
Dwikky Darmawan ◽  
Weny Putri
Keyword(s):  
Earnings Management ◽  
Firm Size ◽  
Significant Influence ◽  
Service Sector ◽  
Audit Quality ◽  
Stock Exchange ◽  
Secondary Data ◽  
Annual Reports ◽  
Political Connection ◽  
Discretionary Accrual

The purpose of this study is to determine the effects of political connection toward the earnings management of service sector companies with control variables firm size and audit quality. Firm�s political connection measured by using dummy variable. Earnings management is proxied by discretionary accrual which is measured by using Modified Jones Model. The research data applied in this study are the secondary data which are taken from the annual reports of service sector companies that listed in Indonesian Stock Exchange of 2016-2017 periods. There are 330 observations fit as sample, which are taken by using purposive sampling method. Data are processed by applying the multiple linear regression test. The result show that the political connection had positive but not significant influence to earnings management. Firm size had negative but not significant influence to earnings management. Whereas the audit quality had a negative and significant influence to earnings management.

PENGARUH EARNINGS MANAGEMENT TERHADAP EARNINGS QUALITY

2010 ◽  
Author(s):  
Pupun Tri Wahyuni ◽  
Resti Yulistia Muslim
Keyword(s):  
Earnings Management ◽  
Sampling Method ◽  
Stock Exchange ◽  
Earnings Quality ◽  
Manufacturing Companies ◽  
Financial Report ◽  
Earnings Response Coefficient ◽  
Discretionary Accrual ◽  
Response Coefficient ◽  
Earnings Response

This research objective is to axamine empirically the influence of earnings management on earnings quality. The study motivated by the controversy of previous study about earnings management and earnings quality. Earnings management was measured by Discretionary Accrual and earnings quality was measured by Earnings Response Coefficient (ERC). The units were 128 (16x8) Quartal financial report in manufacturing companies listed in the Jakarta Stock Exchange, started from the year 2005 up to 2006. The data was collected using purposive sampling method. Statistical method used to test the hypotheses was multiple regressions. The result of the research showed that: the influence of earnings management on earnings quality was negative, sig 0.049. It means that the lower earnings management will be followed by higher earnings quality. This study supported the result of Fetham and Pae (2000), Nelson et al. (2000), Scott (2000), Lobo and Zhou (2001), also Teixeira (2002), Pudjiastuti (2006). 

PENGARUH MANAJEMEN LABA TERHADAP ABNORMAL RETURN

2009 ◽  
Author(s):  
Zirman Zirman ◽  
Lily Lily
Keyword(s):  
Earnings Management ◽  
Cash Flow ◽  
Significant Influence ◽  
Stock Price ◽  
Abnormal Return ◽  
Real Earnings Management ◽  
Financial Statement ◽  
Discretionary Accrual ◽  
Stock Price Reaction ◽  
Flow Components

This research investigates the consequence of earnings management by analyzing stock price reaction to the full set financial statement in 2008 which can be used by investors to detect earnings management by the firms. This research investigated two forms of earnings management (accrual and real earnings management). The samples is drawn from firms in IDX Statistic 2008 which categorized as active in frequency, value or volume. The method of analysis of this research used multi regression. The results show (1) discretionary accrual had negative significant influence to abnormal return, (2) abnormal cash flow from operation had negative significant influence to abnormal return. The results implicate that the investors are aware of the accrual earnings management (discretionary accrual) and real earnings management (abnormal cash flow) components in the earnings reported by the firms and they react negative to this components.

scholarly journals The effect of financial distress and earnings management on tax aggressiveness with corporate governance as the moderating variable

2020 ◽  
Vol 9 (7) ◽  
pp. 167-176
Author(s):  
Ratih Pujirahayu Nugroho ◽  
Sutrisno T Sutrisno ◽  
Endang Mardiati
Keyword(s):  
Corporate Governance ◽  
Earnings Management ◽  
Financial Distress ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Audit Committees ◽  
Manufacturing Companies ◽  
Sample Collection ◽  
Financial Reports ◽  
Tax Aggressiveness

This study aims to verify the correlation between financial distress and earnings management of tax aggressiveness moderated by corporate governance. This study uses a population of manufacturing companies that publish their financial statement on the Indonesia Stock Exchange from 2017 until 2018. Sample collection was performed using a purposive sampling method, resulting in a total of 212 populations that published complete financial reports. This study was tested by using the Multiple Regression Analysis test. This research gave empirical proofs that financial distress and real earnings management positively influenced the tax aggressiveness was supported, the proportion of independent commissioners weakened the financial distress and negatively impacted the tax aggressiveness was supported, the total audit committees weakened the financial distress and negatively influenced the tax aggressiveness was not supported, the proportion of independent commissioners and total audit committees weakened the real earnings management and negatively affected the tax aggressiveness was not supported

scholarly journals PENGARUH INFORMASI LABA TERHADAP REAKSI PASAR DENGAN MANAJEMEN LABA RIIL DAN MANAJEMEN LABA AKRUAL SEBAGAI VARIABEL MODERASI

2019 ◽  
Vol 13 (1) ◽  
pp. 1-23
Author(s):  
Santi Santi ◽  
Kurniawati Kurniawati
Keyword(s):  
Earnings Management ◽  
Market Reaction ◽  
Stock Exchange ◽  
Real Earnings Management ◽  
Manufacturing Companies ◽  
Statistical Tool ◽  
Significance Level ◽  
Moderating Variables ◽  
Earnings Information ◽  
Final Sample

This study aims to investigate the effect of earnings information on market reaction with accrual and real earnings management as the moderating variables. The sample of this study is manufacturing companies listed in the Indonesia Stock Exchange in 2012-2015. Samples are collected by purposive sampling and resulted in 58 companies as the final sample. Data were analyzed using Moderated Regression Analysis (MRA) for testing hypothesis with significance level 5%. The statistical tool used is SPSS 22. The results of this study shown that market reacts positively significant toward earnings management and real earnings management in aggregate weaken the effect of earnings information toward market reaction. Real earnings management through discretionary expenses strengthen the effect of earnings information toward market reaction. Meanwhile, real earnings management through sales manipulation and overproduction, and accrual earnings management do not moderate the effect of earnings information toward market reaction.

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