Opportunistic Behavior and Financial Distress: The Case of Earnings Management

Rudiawarni, Felizia Arni and Budianto, Inglan Sari (2022) Opportunistic Behavior and Financial Distress: The Case of Earnings Management. In: Modeling Economic Growth in Contemporary Indonesia. Emerald Publishing Limited, U.K, pp. 171-185. ISBN 978-1-80262-432-8; eISBN: 978-1-80262-431-1

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Abstract

This study investigates the role of opportunistic behavior in earnings man- agement. Using listed firms in the Indonesia Stock Exchange as the object of study, our examination shows that profitability’s opportunistic behavior affects earnings management significantly. The higher the profitability, the higher the earnings management will be. Financial distress also affects the tendency of earnings management. The more severe financial distress, the higher the earnings management is. Another important finding is that bigger firms tend to perform more earnings management activities. This study contributes to earnings management and agency problems research in the context of go public firms in emerging markets since opportunistic earnings management will prevent investments, which will hamper the country’s economic growth. This study also contributes to entrepreneurial studies. The manager is considered an entrepreneur CEO, so all the management stra- tegies affect company value, including how the manager communicates the earnings information to accounting information users.

Item Type:	Book Section
Uncontrolled Keywords:	Earnings management; economic growth; entrepreneur; financial distress; monitoring mechanism; opportunistic behavior
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HG Finance
Divisions:	Faculty of Business and Economic > Department of Accounting
Depositing User:	Felizia Arni Rudiawarni 31129
Date Deposited:	02 May 2023 09:00
Last Modified:	02 May 2023 09:00
URI:	http://repository.ubaya.ac.id/id/eprint/44044

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