EARNINGS MANAGEMENT AND FIRM FINANCIAL MOTIVES AN EMPIRICAL STUDY ON MANUFACTURING COMPANIES IN INDONESIA

Wibiksono, Rosalia Anita and Yie Ke, Feliana (2015) EARNINGS MANAGEMENT AND FIRM FINANCIAL MOTIVES AN EMPIRICAL STUDY ON MANUFACTURING COMPANIES IN INDONESIA. In: Airlangga Accounting International Conference, 3-4 June 2015, Surabaya.

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Abstract

Abstract This study aims to determine whether companies with high level of political costs, close to debt covenant violation, issuing equity or bonds, applying a bonus based earnings, achieving and/or exceeding analyst's forecasts, have effect on earnings management. In addition, this study examines whether this relationship are influenced by some company financial conditions, such as the level of profitability, size, leverage, growth, liquidity, and investment. Previous studies generally focus only on one type of motivation to perform earnings management. Therefore, this study enhances the literatures by studying comprehensively various events that may motivate companies to perform earnings management. The results show the level of political costs, bonus based earnings, and benchmarking financial analyst forecasts have significant positive effects on earnings management. Meanwhile, the events of debt covenant violation, issuance of equity or bond have no effect on earnings management. The company financial condition moderated the association between each motive to earnings management, although there is no significant direct impact between financial conditions to earnings management. Keywords: earnings management, motivation, financial condition

Item Type: Conference or Workshop Item (Paper)
Uncontrolled Keywords: earnings management, motivation, financial condition
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Faculty of Business and Economic > Department of Accounting
Depositing User: Yie Ke Feliana 3193
Date Deposited: 08 Jun 2015 02:13
Last Modified: 08 Jun 2015 02:13
URI: http://repository.ubaya.ac.id/id/eprint/24553

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