Farandy, Aldo Christanto and Feliana, Yie Ke (2020) CORPORATE GOVERNANCE, EARNINGS MANAGEMENT, AND POST-IPO PERFORMANCE: EVIDENCE FROM INDONESIA. Web of Science. (Submitted)
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Abstract
This paper studies how the corporate governance mechanism and earnings management at initial public offerings (IPOs) Indonesian firms since the IPO year until three years forward. Due to limited available public information before IPO, market focus more on the company prospectus information. While, management of IPO firms will provide firm’s information as completeness as possible, even try to manage the information using earnings management. However, the corporate governance mechanism of the firm should restrain the practice of earnings management so it would not become fraud. Using the sample of Indonesian firms that were first listed in the year of 2013 until 2016, this study finds that IPO firms had higher earnings managements than non-IPO firms. The only corporate governance body that can control earnings management is board of commissioners. In addition, the negative effect of earnings managements during IPO years should influence the company future performance. Firm performance is measured by accounting valuation and market valuation, i.e. return on assets and buy-and-hold-abnormal return. This study finds that IPO companies underperformed in the third year following IPO, however, this study cannot provide evidence that declined performance was caused by the earnings management in the year IPO.
| Item Type: | Article |
|---|---|
| Subjects: | H Social Sciences > HF Commerce > HF5601 Accounting |
| Divisions: | Faculty of Business and Economic > Department of Accounting |
| Depositing User: | ALDO CHRISTANTO FARANDY |
| Date Deposited: | 12 Jun 2020 14:01 |
| Last Modified: | 24 Mar 2021 16:24 |
| URI: | http://repository.ubaya.ac.id/id/eprint/37817 |
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