scholarly journals Related Party Transactions, Family Ownership, and Earnings Management in Indonesia

2021 ◽  
Vol 25 (3) ◽  
pp. 688-700
Author(s):  
Levina Ulfa Subastian ◽  
Ari Kuncara Widagdo ◽  
Doddy Setiawan
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Management Practice ◽  
Control Variable ◽  
Family Ownership ◽  
Related Party Transactions ◽  
Discretionary Accrual ◽  
Corporate Earnings ◽  
The Relationship ◽  
Public Accountant

The purpose of earnings management practice is to reach the profit goals the company wants to achieve. Therefore, this study aims to determine the relationship between related party transactions and earnings management in Indonesia by balanced panel data from consumer goods companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2019. The number of samples used in this study was 102 firm-year observations. The results showed that related party transactions positively and significantly improved corporate earnings management, with discretionary accrual as a proxy. The presence of family ownership strengthens the relationship between related party transactions and earnings management. Also, it shows that the control variable: public accountant from BIG4, company size, company losses, and ROA affect accrual earnings management. The leverage does not affect accrual earnings management. The study result indicates that family business ownership encourages an entrenchment effect that is detrimental to the company. It is carried out through related party transactions then manipulated by using accrual earnings management practices.DOI: 10.26905/jkdp.v25i3.5778

scholarly journals PENGARUH KEPEMILIKAN KELUARGA DAN KARAKTERISTIK KOMITE AUDIT TERHADAP MANAJEMEN LABA

2018 ◽  
Vol 3 (2) ◽  
Author(s):  
Kadek Trisna Dwiyanti ◽  
Meyta Astriena
Keyword(s):  
Earnings Management ◽  
Audit Committee ◽  
Stock Exchange ◽  
Management Practice ◽  
Family Ownership ◽  
Manufacturing Companies ◽  
Discretionary Accrual ◽  
Effective Policy ◽  
Accounting Expertise ◽  
Study Offer

This study aims to examine the effect of family ownership and audit committee characteristics on earnings management. The independent variables in this study are family ownership, audit committee size, accounting expertise of audit commitee, and audit committee’s number of meetings. Earnings management as a dependent variable is measured by discretionary accrual as a proxy of earnings management. This study also uses leverage and size as control variables. The sample of this study are 81 manufacturing companies listed on Indonesia Stock Exchange (IDX) with data for a period of 2 years (2015-2016). Using multiple linear regression, this study finds family ownership, audit committee size, accounting expertise of audit committee and audit committee’s number of meetings have a negaticve effect on earnings management. This study contributes to the existing literature by providing new result related to the influence of family ownership and audit committee characteristics on earnings management practice. In addition, this study offer some useful insights for policy maker in determining the most effective policy to reduce earnings management.

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 Does the presence of independent directors reduce the practices of earnings management? The moderating role of family ownership concentration

2019 ◽  
Vol 69 (6) ◽  
pp. 638-654
Author(s):  
Deaa Al-Deen Al-Sraheen ◽  
Khaldoon Ahmad Al Daoud
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Ownership Concentration ◽  
Future Research ◽  
Family Ownership ◽  
Board Independence ◽  
New Ideas ◽  
The Relationship ◽  
Moderating Role

While often criticized, the independence of directors remains a crucial criterion for evaluating the effectiveness of the monitoring role of boards. This study examines the relationship between board independence and earnings management, paying attention to moderation role of family ownership concentration on this relationship using a sample of services companies listed on Amman Stock Exchange ASE. This study documented a significant and negative association between board independence and earnings management. In addition, the moderating role of family ownership concentration on this relationship was also negative. Thus, the board’s monitoring function was inefficient due to the concentration of ownership. These results were obtained through using multiple and sequential regression analysis for the research data from 2013 to 2016. This study provides new ideas for future research such as examining the impacts of the migration of capitals and investors from neighbouring countries such as Syria and Iraq.

scholarly journals Earnings management determinants: A study of Egyptian listed firm characteristics post the Egyptian revolution

2021 ◽  
Vol 5 (2, special issue) ◽  
pp. 165-166
Author(s):  
Engy ElHawary ◽  
Dina Hassouna
Keyword(s):  
Earnings Management ◽  
Management Practices ◽  
Audit Quality ◽  
Stock Exchange ◽  
Management Practice ◽  
Earning Management ◽  
Firm Characteristics ◽  
Financial Leverage ◽  
Egyptian Revolution ◽  
The Relationship

This research aims to look at how firm characteristics and audit quality can affect the earning management practices in the Egyptian context, within the period of 2011–2019. This period was after the Egyptian revolution and has not been well investigated in Egypt, especially after the new release of corporate governance rules for listing firms. A sample of 157 non-financial listed companies in the Egyptian stock exchange is selected for achieving the research objective through analysing their financial reports. The panel least squares, using the fixed-effect model, is used to test the hypotheses and investigate the relationship between discretional accruals and firm characteristics, where the dependent variable is the earnings management, measured by the discretionary accruals and the independent variables are the firm characteristics (size, financial leverage, age, survival and audit quality). The results illustrate that the relationship between a firm’s financial leverage and earnings management is positive. This study may help the firms to control their financial leverage for avoiding any earnings management practice. The stakeholders should notice such significant firm characteristics in making their own decisions, especially after the COVID-19 pandemic crisis, which may expectedly increase the firm financial leverage, and in turn, some earning management practices can be used intentionally to hide the bad firm performance

Related party transactions and accounting quality in Greece

2016 ◽  
Vol 24 (4) ◽  
pp. 375-390 ◽  
Author(s):  
Moataz El-Helaly
Keyword(s):  
Earnings Management ◽  
Design Methodology ◽  
Stock Exchange ◽  
Accounting Quality ◽  
Content Type ◽  
Related Party Transactions ◽  
Earnings Smoothing ◽  
Athens Stock Exchange ◽  
The Relationship

Purpose The purpose of this paper is to investigate the relationship between related party transactions (RPTs) and accounting quality for the firms listed on the Athens Stock Exchange. Design/methodology/approach This paper compares accounting quality across two groups of firms. The first group contains firms that conduct material RPTs and the second group contains firms that do not conduct material RPTs. Accounting quality is measured using different proxies of earnings management. Four earnings management proxies are used, three metrics for earnings smoothing and one for managing earnings towards a target. Findings The results of the current study do not suggest that firms with significant RPTs exhibit less accounting quality compared to non-RPTs firms. Research limitations/implications The results support the argument that RPTs are conventional transactions that are mainly conducted for business purposes. Originality/value This paper contributes to the literature by examining the effect of RPTs on accounting quality in Greece and whether firms that conduct RPTs exhibit less accounting quality or not.

scholarly journals Board independence, earnings management and the moderating effect of family ownership in Jordan

2018 ◽  
Vol 13 (2) ◽  
pp. 985-994
Author(s):  
Mohammed Idris ◽  
Yousef Abu Siam ◽  
Mahmoud Nassar
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Legal Protection ◽  
Moderating Effect ◽  
Family Ownership ◽  
Board Independence ◽  
Industrial Companies ◽  
The Relationship

Abstract This research examines the moderating effect of family ownership over the relationship between board independence and earnings management. Using information of industrial companies indexed on Amman Stock Exchange, this research provides evidence of negative relationship between board independence and earnings management, proposing that higher percentage of board independence is related with more effective monitoring to reduce earnings management. Moreover, the results document that the relationship between board independence and earnings management becomes weak when there is an interaction with family ownership control. These outcomes indicate that an increase in the percentage of independent directors to mitigate earnings management is less likely to be influential in the case of family controlled firms. The results of this research could be valuable to regulators in their efforts to restrict the incidence of earnings management and improve the quality of monitoring mechanisms, especially in an environment where the capital market is still evolving and the legal protection and law enforcement are weak.

scholarly journals ANALISIS PENGARUH KINERJA LINGKUNGAN, MANAJEMEN LABA, UKURAN PERUSAHAAN, DAN PROFITABILITAS TERHADAP PENGUNGKAPAN LINGKUNGAN PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA

2016 ◽  
Vol 9 (2) ◽  
pp. 147-171
Author(s):  
Melvin Julianto ◽  
Julianti Sjarief
Keyword(s):  
Earnings Management ◽  
Firm Size ◽  
Environmental Performance ◽  
Stock Exchange ◽  
Descriptive Analysis ◽  
Linear Regression Analysis ◽  
Multiple Linear Regression Analysis ◽  
Environmental Disclosure ◽  
Discretionary Accrual ◽  
The Relationship

The purpose of this study is to analyze the effect of environmental performance, earnings management, firm size, and profitability to environmental disclosure. This study uses descriptive analysis and multiple linear regression analysis to examine the relationship between independent and dependent variable on 42 manufacuture companies listed in Indonesia Stock Exchange period 2011-2013. Environmental performance is measured using PROPER; earnings management is measured using discretionary accrual model Kothari et al. (2005); firm size measured using Log10 of total assets; profitability is measured using ratio of profit margin; environmental disclosure measured using  Patten (2002) environmental disclosure item. This study found that environmental performance and firm size have impact on environmental disclosure. However earnings management and profitability have no impact on environmental disclosure.

scholarly journals Relationship of Related Party Transactions and Earnings Management

2021 ◽  
Vol 5 (02) ◽  
pp. 96
Author(s):  
Nur Astri Sari ◽  
Rusma Nailiah ◽  
Achmad Suhaili ◽  
Fitria Handayani
Keyword(s):  
Earnings Management ◽  
Stock Exchange ◽  
Related Party Transactions ◽  
Related Party Transaction ◽  
Negative Effect ◽  
Relationship Of ◽  
The Relationship

<em>This study aimed to examine the relationship between related party transactions and earnings management. The sample of this study was companies listed on the Indonesia Stock Exchange for the 2017 and 2018 period. The result shows that related party transaction (sales and expense) has a negative effect on accrual earnings management. It indicates that firms use related party transactions (sales and expense) as substitutes for earnings management especially accrual earnings management.</em>

scholarly journals Manajemen Laba Dan Kinerja Keuangan Perusahaan Pengakuisisi Sebelum Dan Sesudah Merger Dan Akuisisi Di Indonesia

2016 ◽  
Vol 5 (3) ◽  
Author(s):  
Alwan Sri Kustono ◽  
Agnes Sindhy Pikatan
Keyword(s):  
Mergers And Acquisitions ◽  
Earnings Management ◽  
Financial Performance ◽  
Stock Exchange ◽  
Management Practice ◽  
Manufacturing Companies ◽  
Discretionary Accrual ◽  
Management Measures ◽  
Before And After ◽  
The Difference

The study examine the earnings management practice in aquirer companies before and after mergers and acquisitions. It also show the difference financial performance. The purpose of this study was to prove the existence of the practice earnings management by the acquirer in the period prior to the mergers and acquisitions. this study also aimed to see whether there differences in the financial performance of the acquirer after the merger policy and acquisition of the manufacturing companies listed on the Stock Exchange over a period reporting year 2006-2008. The sample in this study are 13 manufacturing companies listed on the Indonesia Stock Exchange in reporting mergers and acquisitions 2006-2008. The conclusion of this study is there is no strong evidence through discretionary accrual indicating that earnings management measures made by the acquirer in the period prior to the merger and acquisitions and also no significant differences in financial performance afterimplementation of mergers and acquisitions on the acquirer.

scholarly journals PENGARUH KOMITE-KOMITE PENUNJANG DEWAN KOMISARIS TERHADAP TAX PLANNING DENGAN STRUKTUR KEPEMILIKAN KELUARGA SEBAGAI VARIABEL PEMODERASI (STUDI EMPIRIS PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA TAHUN 2011-2015)

2020 ◽  
Vol 4 (1) ◽  
pp. 48-59
Author(s):  
MUHAMMAD SYAFIQURRAHMAN ◽  
SRI SURANTA
Keyword(s):  
Corporate Governance ◽  
Stock Exchange ◽  
Retention Rate ◽  
Control Variable ◽  
Tax Planning ◽  
Audit Committees ◽  
Family Ownership ◽  
The Relationship ◽  
Risk Policy ◽  
Policy Committee

This study aims to determine the influence of committees under the board of commisioners towards tax planning using the structure of family ownership as the moderating variable. Committees under the board of commisioners included in this study are an audit committess, nomination committess or remuneration, risk policy committee, as well as corporate governance policy committee entirely proxied by the size of the committee. The dependet variable, tax planning, is proxied by Tax Retention Rate (TRR); while moderating variables, the ownership structure, was determined by the ratio of family ownership. This study use profitability as control variable and moderating regression analysis is employed to analyzed the data. The sample used 230 manufacture companies listed on the Stock Exchange Year 2011-2015 and used purposive sampling as sampling method. The result in this study are structure of family ownership has no effect on the relationship between the audit committees and profitability toward tax planning, structure of family ownership has positive effect on the relationship between the nomination committess or remuneration toward tax planning, and then structure of family ownership has negative effect on the relationship between the risk policy committee and corporate governance policy toward tax planning

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