Pengaruh Struktur Kepemilikan terhadap Luas Pengungkapan Tanggung Jawab Sosial (CSR Disclosure) pada Laporan Tahunan Perusahaan

Chaerul D. Djakman


The purpose of this study is to investigate the foreign ownership and institutional ownership are considered by corporate to disclose social responsibility at annual report 2006. Our samples consist of 107 listed company at Indonesian Stock Exchange at years 2006. Our results show that foreign ownership is no significant effect to CSR disclosure, and institutional ownership do not have significant effect to CSR disclosure. This indicate both of ownership structure in this study haven’t concern with CSR disclosure to make investment decision.

Keywords: CSR Disclosure, Foreign Ownership, Institutional Ownership

Pengaruh Status International, Diversifikasi Operasi dan Legal Origin terhadap Manajemen Laba (Studi Perusahaan Asia yang Terdaftar di NYSE)

Ratih Indraswari, S.E., M.Sc.


This study aims to provide empirical evidence about the effect of international status, operation diversification, and legal origin on earnings management by Asian companies listed on NYSE. The complexity of the company's business comes from the increasing international status and operation diversification will increase the information asymmetry between managers and investors and affect the earnings management by the companies. For companies listed on foreign capital markets, legal system of the country of origin (legal origin) also affect earnings management by the companies. Companies with civil law of legal origin have a higher earnings management than firms with common law legal of origin. Earnings management measured using discretionary accrual. This study uses 82 Asian companies listed on NYSE as sample, during the 2006-2008 year period of observation. This study provide empirical evidence that the international status and operation diversification affect earnings management. While legal origin (the legal system of the country of origin) does not affect earnings management when the company is listed on foreign capital markets which have strong investor protection such as the NYSE (New York Stock Exchange).
Keyword: discretionary accruals, earnings management, international status, operation diversification, legal origin

Praktek Window Dressing pada Reksa Dana Saham di Indonesia Selama Periode 2001-2007

Fakultas Ekonomi Universitas Indonesia


During maintaining their assets, there is an indication that days surrounding every reporting date, which is the date at each year end, fund manager behaves differently from any other dates. Some researchers and analysts conclude this behavior as what-so-called window dressing, which is a practice to present the report in favor of the investors’ expectation.  This study is intended to examine the existence of such behavior in Indonesia. Some of the signals that aid in proving the existence of window dressing are the turn-of-year factor, lagged returns, and fund’s objectives. The result of this study exhibits indications of turn-of-year factor and lagged return inclined to window dressing. This study fails to verify the indications of fund’s objective inclined to window dressing because of the changing objectives during the portfolio management.

Keywords: window dressing, turn-of-year effect, lagged return, fund’s objective

Pengaruh Praktek Corporate Governance terhadap Resiko Kredit, Yield Surat Hutang (Obligasi)

Universitas Indonesia


The purposes of this study are to investigate whether there are a relationship between corporate governance practices and credit risk and bond yields. This study takes sample from the companies that published bonds in 2006. First we investigate the relationship between corporate governance practices and credit risk. Credit risk (default risk) can be measured by bond ratings (Billings, 1999). Using ordered probit regressions, we find evidence that the quality of transparency and financial information disclosure that proxied by big-4 auditors and audit committee have significant influence on bond ratings, but the relationship between blockholders and institutional ownership is not significant on bond ratings. Second, we investigate the relationship between corporate governance practice and bond yields. Using multiple regressions, we find that corporate governance practices is not significant on bondyields. Then we put bond ratings in the equation, we find that bond ratings give incremental effect to the evidence. This evidence is consistent to Bradley, 2007, that bond ratings are the prominent determinant for bond yields. Together with the bond ratings, the corporate governance practices (blockholders, institutional ownership, big-4 auditors) have significant influence on bond yields.

Keywords: bond ratings, bond yields, corporate governance, credit risk, default risk

Pengaruh Faktor Kultur Organisasi, Manajemen Strategik, Keuangan dan Auditor terhadap Kecenderungan Kecurangan Akuntansi: Studi pada Perusahaan Publik di Indonesia

Rangga Soselisa


 Accounting fraud, where the financial reports are reported not in compliance with the generally accepted accounting principles can undermines the credibility of the financial reporting system. Indeed the effects of accounting fraud can be devastating for investors. The objectives of the research is to explain the effect of organization culture, managerial, strategic, financial ratios , and auditor factors to the tendency of accounting fraud. The research population was 343 companies listed in the Indonesian Stock Exchange (IDX). The research samples were 110 public companies consisting 29 fraud firms and 81 non-fraud firms. Binary logistic regression was used to test the hypothesis. The results showed that number of related party transactions, CEO’s age, current asset composition in total asset, capital turnover,  firm size, and auditor’s non-unqualified opinion affected the tendency of accounting fraud significantly. These results advance the understanding of accounting fraud.

Keywords: Accounting Fraud, Organizational Culture, Managerial Factors, Strategic  Factors, Financial Ratios, Auditor Factors.

Analisis Arus Kas Kegiatan Operasi dalam Mendeteksi Manipulasi Aktivitas Riil dan Dampaknya terhadap Kinerja Pasar




This research aims at identifying firm’s tendency to execute real activities manipulation through cash flow from operating activities and its impact to market performance. The sample is drawn from firms in the biggest 50 firms with assets above 1 trillion rupiahs for period of 2001 – 2006, which are published in Swa100. The research model used is based on Roychowdhury’s model (2003). Prior to test the hypotheses, the researcher employed  regression model  to determine normal and  abnormal cash flow from operating activities. Then, descriptive statistics, one sample t-test, and two independent samples t-test are used to test the research hypotheses. The result shows that firms tend to execute real activities manipulation through operating cash flow. Moreover, the impact of real activities manipulation on market performance shows firms that are more likely executing real activities manipulation have higher market performance than their counterparts. After controlling for industrial types of the companies, the result finds that manufacturing firms execute more real activities manipulation than non manufacturing firms.

Keywords: Operating cash flow, real activities manipulation, market performance

Analisis Hubungan Value Based Management dengan Corporate Social Resposibility dalam Iklim Bisnis Indonesia (Studi Kasus Perusahaan Swa 100 tahun 2006)

Elsa Rumiris Monika Fakultas Ekonomi Universitas Indonesia
Dwi Hartanti Fakultas Ekonomi Universitas Indonesia

This research tries to analyze the relationship between corporate environmental performance and financial performance. The influence of corporate environmental management aspect into that relationship is also observed. We used PROPER rating 2002 – 2004 as proxy of environmental performance, accounting and market based measure in financial performance and GRI Guideline for environmental aspect of companies. We conducted lead – lag scenario for tested the relationship. We also try to analyze the effect of disclosure and ISO as environmental aspect of companies. The study found that the relationship between environmental performance and financial performance is positive but not significant, both in lead and lag scenario.  We also found that market react negatively to the environmental aspect of company such as corporate environmental management and ISO 14001. The relationship between environmental performance and ISO is negative. But we found that the better the corporate environmental management, the higher the disclosure.

Key word: Environmental performance, financial performance, corporate social responsibility

Pengaruh Corporate Social Resposibility terhadap Kinerja Perusahaan (Studi Empiris pada Perusahaan yang Tercatat di BEI Tahun 2005 dan 2006)

Lely Dahlia
Sylvia Veronica Siregar


The purpose of this research is to test the effect of CSR on firm financial and market performance. This research is motivated by the fact that there is a lower level of activities of CSR and its disclosure and also mixed results from previous research. This research used Corporate Social Disclosure Index (CSDI) as a measure of CSR disclosure, based on indicators from Global Reporting Initiatives (GRI). The samples of this research are 77 public firms listed in Indonesian Stock Exchange (IDX) year 2005 and 2006. Relatively lower score of CSDI shows that CSR disclosure in firms’ annual report is still low. This may due to there is still no mandatory rules regarding CSR disclosure in Indonesia and the lack of firms’ awareness of the importance of CSR and its disclosure in annual report. Test results show that CSR disclosure have positive and significant effect on Return on Equity as a measure of financial performance, but CSR disclosure do not has significant effect on cumulative abnormal return (CAR) as a measure of market performance.

Keywords: Corporate Social Responsibility; Return on Equity; Cumulative Abnormal Return

Peran Praktek Corporate Governance sebagai Moderating Variable dari Pengaruh Earnings Managment terhadap Nilai Perusahaan

Vinola Herawaty
Dosen Universitas Trisakti
dan mahasiswa Pasca Sarjana Program Ilmu Akuntansi Universitas Indonesia


The objective of the empirical studi is to examine the role of Corporat Governance Practises as a variabel that moderates the effect of Earnings Management to the value of the firm and to answer the effectinessness of Corporate Governance Practises in controlling the company’s management’s ability with Earnings Management that affect the Firm Value. Four proxies used for Corporate Governance Practices are Manajerial Ownership, Institusional Ownership, Outside Independent Director, Audit Quality. Company size is use as a control variable. The value of the firm is measured by using proxy Tobin’s Q Model. The analysis method used is Ordinary Least Square, t-test and F-test. The sample of this empirical study is the company that listed in Jakarta Stock Exchange in the period of 2004-2006. The result gives the evidence that Corporate Governace Practises that have a signifikan impact to the value the firm are Outside Independent Director and Institusional Ownership, in the model regression with moderating variable. It also indicates that Outside Independent Director, Audit Quality and Institusional Ownership are moderating variables of the relationship between Earnings Managementt and the value of the firm, but not the Manajerial Ownership. Thus, Earnings Management can be minimized with the monitoring mechanism i.e. (1) Outside Independent Director that can monitor the management of the company in aligning the interest of principal and agent, (2) Institusional Ownership shareholders - the sophitisticed investor that also monitor the management to decrease the motivation of management to manipulate Earnings and (3) Audit Quality with the role of auditors to give the credibility of the reported financial statement by management. The result also shows that Manajerial Ownership does not represent the moderating variable of the realtionship between Earnings Management and Firm Value, it proves that the role of manajerial ownership is not significant to minimize the management’s ability to manipulate Earnings that affects the Firm Value

Keywords: Corporate Governance, Earnings Management, Manajerial Ownership, Outside Independent Director,  Institusional Ownership, dan Audit Quality

Overreaksi Pasar terhadap Harga Saham Perusahaan-perusahaan di Indonesia (Studi Kasus pada Bursa Efek Indonesia)

Azhar Ardi, Kiryanto and Dista Amalia

Researches about market overreact toward stock value emphasize that there is phenomenon of stock value reversal which have negative return for same period of time and then move toward positive return, at the other hand high-return stocks for while become worse and stock value go down. Hypothesize about this overreact usually use winner portfolio as parameter for stock value which have good performance and loser portfolio for the bad one. The objective of this research is to know market overreact toward company stock at BEJ. This research reexamine, is there a market overreact toward stock value in 2004-2007 using market adjusted and mean adjusted model. Sample divide into two group; 20 companies as winner portfolio and 20 companies for loser portfolio.The result show that market overreact signed loser porfolio exceed winner portfolio in 2005, after that both of groups stock value movement quite stabil. Independence analysis sample t-test indicate there is no significant difference between average return group of winner stock and loser stock.

Key word: Market overreact, winner-loser, mean adjusted model, market adjusted model

Pengaruh Konsentrasi Kepemilikan, Ukuran Perusahaan dan Mekanisme Corporate Governance terhadap Manajemen Laba

Universitas Widyatama Bandung


The objectives of the research are to find out empirical evidence of the effect of  ownership concentration, firms size, and corporate governance mechanisms on earnings management. The corporate governance mechanisms of  this research are composition of board of  commissioner and audit quality. Audit quality were measure by industry specialize audit firm. The target population was listed companies in the manufacturing sector at the Indonesia Stock Exchange. The sample determined based on purposive samping methode. There were 101 companies meeting the criteria. Data analysis was carried out in term cross section covering financial report during 2005. The research hyphotesis were tested using multiple regression analysis. The result of this research show that: (1) ownership concentration had significantly negative influence on earnings management (2) firms size had significantly negative influence on earnings management (3)  composition of board of commissioner had no influence on earnings management. The additional result that earnings management of the firms which have competency independent commissioner are lower than earnings management of the firms which have uncompetency independent commissioner; (4) industry specialize audit firm had no influence on earnings management.
Keywords : ownerships concentration, firms size, corporate governance mechanisms,  earnings management

Analisis Faktor-faktor yang Mempengaruhi Ketepatan Waktu Penyampaian Laporan (Studi Empiris pada Perusahaan-perusahaan yang Terdaftar di BEJ Periode 2004-2006)

Utari Hilmi FH S.E., Ak.
Syaiful Ali S.E., MIS.


This research aims is to know factors influencing timeliness of financial statement forwarding. Bapepam as a regulator of capital market stated Bapepam Decision Number KEP-36/PM/2003 specifying deadline of financial statement forwarding from 120 day become 90 day. Sample of research is 879 firms listed in Jakarta Stock Exchange period 2004-2006 that selected by using purposive sampling method. Method used in analyzing data that is logistic regression. Result of this research at level significance 5%, variable profitability (ROA), liquidity (CR), shareholder’s dispersion (KP), and reputation of public accountant firm (KAP) have an effect on by significance to timeliness of financial statement forwarding. While variable of financial leverage (DER), firms size (TA) and auditor opinion (OA) not have an effect on to timeliness of financial statement forwarding.

Keywords: timeliness, financial statement, Bapepam decision

Pengaruh Tingkat Ketaatan Pengungkapan Wajib dan Luas Pengungkapan Sukarela terhadap Kualitas Laba (Studi pada Perusahaan Publik Sektor Manufaktur)



The objectives of the research is to find out the impact of mandatory disclosures and voluntary disclosures on earnings quality. The population of this study was public manufacturing companies listed at Jakarta Stock Exchange in 2005 period. There were 31 manufacturing companies meet the criteria was chosen as sample. This research is explanatory research, and the  data analysis were treated as  cross-section. Mandatory disclosure were measured by mandatory disclosure index, while voluntary disclosure were measured by voluntary disclosure index, and earnings quality were measured by earnings response coefficient (ERC). Earning persistence, systematic risk, company growth, leverage and company size which in prior studies described ERC variation, in this research  used as controlling variable. The research hypothesis were tested using the multiple regression analysis.The result of this research  before and after use the which described ERC variation show that: (a) mandatory disclosure had no impact on earnings quality, (b) voluntary disclosure had significantly negative influence on earnings quality, and (c) mandatory disclosure and voluntary disclosure were simultance had no impact on earning quality

Keywords: Mandatory Disclosures, Voluntary Disclosures, Earnings Quality, Earnings Response Coefficient

Pemilihan Prediktor Delisting Terbaik (Perbandingan antara The Zmijewski Model, The Altman Model dan The Springate Model

Dosen Jurusan Akuntansi FE UII
Atika Anggraeni
Mahasiswa Jurusan Akuntansi FE UII 2008


This research objective is to know the best delisting predictor in IDX.  There are three famous bankruptcy predictors The Zmijewski Model, The Altman Model, and The Springate Model. This research uses these three models to predict delisting. This research took IDX delisting data for 2003 – 2007 except banks. To have a good comparison, this research took randomly same number of non delisting companies which are in the same category. This research use logistic regression of Microsoft Excel. This research found that The Zmijewski Model could not predict delisting. Both of The Altman Model and The Springate Model could predict delisting moderately. The Altman Model is the best delisting predictor.

Keyword: Delisting, The Zmijewski Model, The Altman Model, The Springate Model

Event Study: Pengumuman Laba Terhadap Reaksi Pasar Modal (Study Empiris, Bursa Efek Indonesia 2004-2006)

Binsar I. K. Telaumbanua dan Sumiyana
Universitas Gadjah Mada


This paper examines the investor reaction to earnings announcement around event period of earnings announcements date. This paper divide into two categories, First, the positive-earning announcement include increasing of earning per share (EPS) and second, the negative-earning announcements consist of decreasing of Earning Per Share (EPS). The examination of content and efficient market hypothesis used Event Study. We propose one hypotheses as positif-earnings announcement and negative-earnings announcement correlate to reaction of stock Price in IDX. Dependent variable is stock return and independent variable is market return. The sample are the 29 companies from LQ 45 that release the annual earnings of year 2004-2006. The earnings announcements date is taken from Indonesian Securities Supervisory Agency (Bapepam). Statistical test with standard error of estimate (SEE) was used to test the significance of abnormal return during event periods of earnings announcements.    The results show that investor responds significantly to the positive and negative earnings announcement at the announcement dates. And also, earning announcement seen give information contents to capital market. Finally, the empirical result is contrary the finding of Ball and Brown (1968), Foster (1977), and Hayn (1995). However, this evidence supports the Lako’s studies (2002a, 2002c).

Keywords: event study, reaction of stock price, market efficient, positive-earning announcement,  negative earnings announcements, good news and bad news

Ekspropriasi Pemegang Saham Minoritas dalam Struktur Kepemilikan Ultimat

DR. Baldric Siregar, M.B.A., Ak.

Large shareholders establish control over a firm through pyramid structure and cross-holding among firms. Those types of ownership structure create divergence between cash flow rights and control rights. Large shareholders may have control over a firm despite little cash flow rights. This study investigates the effects of cash flow right and control right separation on firm value of Indonesian companies listed on the Indonesia Stock Exchange for the period of 2000 to 2004. I use cut-off point of 10 percent control rights to test those effects. The results show that cash flow rights have positive effect on firm value.  When using higher cut-off points, cash flow right leverage has negative effect on firm value. For cut-off point up to 50 percent, however, control rights have no significant effect on firm value. I further test that the cash flow right leverage might depend on the controlling shareholders’ participation in firm management and the presence of the second controlling shareholder. The evidence shows that the coefficients on both interactions are insignificant.

Keywords: cash flow rights, control rights, cash flow right leverage, pyramiding, cross-holding, immediate ownership, ultimate ownership, expropriation, firm value.

Pengujian Simultan: Beberapa Faktor yang Mempengaruhi Earning Response Coefficients (ERC)

Etty Murwaningsari
Fakultas Ekonomi Universitas Trisakti


The objective of this research are to identify the direct and indirect influences of leverage, disclosure, size, timeliness, persistence and growth to the firm’s Earning Response Coefficient (ERC).This research examine 60 manufacturing companies listed in Jakarta Stock Exchange and issues audited financial statement since 2003-2006. The statistical methods used to test the hypothesis is Structural Equation Model (SEM).    The empirical result of this research indicates that leverage has negative influence to ERC. Test results suggest that by using the direct path analysis, both disclosure and timeliness have positive significant influences to ERC, while both leverage and firm’s size have negative significant influences to ERC. The subsequent test indicates that  leverage and size, each has non-significant influence to disclosure and timeliness, respectively. The control variable Auditor Reputation and Earning Growth have positive significant influence to disclosure and ERC respectively, Auditor’s Opinion has negative significant influence to timeliness, whereas Earning Persistence has non-significant influence to ERC. The last test (indirect path analysis) both leverage and size have no influences to ERC through disclosure and timeliness, respectively. Thus it can be concluded that neither disclosure nor timeliness constitutes an intervening variable.

Keywords: size, leverage, disclosure, timeliness, persistence, growth, auditor’s opinion, auditor’s reputation

Pengaruh CSR terhadap Nilai Perusahaan dengan Prosentase Kepemilikan Manajerial sebagai Variabel Moderating (Studi Empiris pada Perusahaan yang Terdaftar di BEJ)



Universitas Syiah Kuala


The aim of this research is to know: (1) The influence of  Corporate Social Responsibility  to firm value (2) The influence of Percentage of  management ownership as the moderating variable in relations between Corporate Social Responsibility and firm value. The research sample is non-financial sector in 2005 by using method of purposive sampling. There are 41 company fulfilling criterion as this research sample. The methode analysis of this research used multiple regression analysis.The result of study show that (1) Simultaneously the effect of  Corporates Social Responsibility , percentage of management ownership and interaction between Corporate Social Responsibility and  Percentage of management ownership on firm value was significant and .(2) Partially, only percentage of  management  ownership have an effect on significant to firm value, while other variables in  this research have not an effect on significant to fim value.
Keyword: Corporate Social Responsibility, Management Ownership, Firm Value

Perilaku Harga Pembukaan (Opening Price): Noise dan/atau Overreaction (Studi Empiris Berbasis Intraday Data, 2006)

S u m i y a n a (Universitas Gadjah Mada)
Hendrik Gamaliel (Universitas Samratulangi)


This study extends Sumiyana (2007b) which concluded that noise over trading and nontrading period, along with overnight and lunch break nontrading session, and the first and second trading session, had occured. However, Sumiyana (2007b) is not clear what kind of prices are responsible for this noise and overreaction?    This study examines the opening price behavior responsibled for the noise and overreaction in the Indonesian Stock Exchange using intraday data in every 30 minutes interval. Samples of the data are the firms listed in LQ45. Sequentially, samples are filtered to stocks that actively traded in the Indonesian Stock Exchange based on trading frequency in observation period from January to December 2006. This research finds that noise and overreaction phenomena were always occurred in the opening price. In addition, investors actually corrected for the noise and overreaction come to pass at the first 30 minutes interval in every trading day session.

Keywords: opening price, noise, overreaction, 30 minutes interval

Hubungan Manajemen Laba Sebelum IPO dan Return Saham dengan Kecerdasan Investor sebagai Variabel Pemoderasi

Joni  dan Jogiyanto H. M.


The major purpose of this study is to investigate association between earnings management before Initial Public Offerings (IPO) and stock’s returns with investors sophistication as a moderating variable. Institutional ownership is used to proxy investors sophistication. The JSX’s IPO companies from 1990 to 2002 were used as samples. The first sample was 75 companies which institutional ownership ≥ 40% and the second was 63 companies that institutional ownership ≥ 60%. Instrumental Variable Approach (Kang and Sivaramakrishnan, 1995) was used to detect earnings management. This study provides an evidence that issuers report unusually high earnings management around IPO (two years before and five years after IPO). Issuers used mean reversing strategy in two years before IPO period (income decreasing) for preparing earnings management in the next period (income increasing). Furthermore, this study documented a negative association between earnings management and stock’s returns with investors sophistication as moderating variable. One interpretation of this finding is that high earnings management has substantial stock’s returns consequences when investors sophistication factor was taken into account. This finding is consistent with the prior research developed by Balsam et al., 2002.

Key words:     IPO, Earnings Management, Instrumental Variable Approach, Stock’s Returns, Investors Sophistication.

Basic Econometrics by Damodar Gujarati

As in the previous three editions, the primary objective of the fourth edition of Basic Econometrics is to provide an elementary but comprehensive introduction to econometrics without resorting to matrix algebra, calculus, or statistics beyond the elementary level. In this edition I have attempted to incorporate some of the developments in the theory and practice of econometrics that have taken place since the publication of the third edition in 1995. With the availability of sophisticated and user-friendly statistical packages, such as Eviews, Limdep, Microfit, Minitab, PcGive, SAS, Shazam, and Stata, it is now possible to discuss several econometric techniques that could not be included in the previous editions of the book. I have taken full advantage of these statistical packages in illustrating several examples and exercises in this edition. I was pleasantly surprised to find that my book is used not only by economics and business students but also by students and researchers in several other disciplines, such as politics, international relations, agriculture, and health sciences. Students in these disciplines will find the expanded discussion of several topics very useful.

Pengaruh Modal Intellectual terhadap Kinerja Perusahaan

Universitas Diponegoro Semarang

Universitas Diponegoro Semarang


The objective of this study is to investigate influence of firm’s intellectual capital (IC) on their financial performance. This paper uses the Pulic Framework and data from 73 publicly listed companies between the years 2003 and 2005 on the Indonesia Stock Exchange except financial industry. This study uses partial least square (PLS) for data analysis. Three elements of IC and company performances are tested by this study.The results show that IC and company performance are not positively related, IC is not correlated to future company performance, the rate of growth of a company’s IC is not positively related to the company’s performance and the contribution of IC to company performance differs by industry. The results help to embolden modern day managers to better harness and manage IC.

Keywords: Intellectual Capital, Performance, Partial Least Square (PLS)

Pengaruh Risiko Perusahaan dan Leverage terhadap Relevansi Nilai Laba Akuntansi


The objective of this study is to examine the value relevance of accounting earnings in explaining stock price. The study is aimed to identify the factors that influence earnings response coefficient. The factors are risk and leverage. The results show that accounting earnings and book value of equity are positively associated with stock price. This results support the prior studies that accounting earnings and book value of equity have value relevance (Ohlson, 1995; Burgthaler and Dichev, 1997, etc). Accounting earnings and book value of equity are useful to explain stock price changes. The results of this study are consistent with previous studies that earnings response coefficient is smaller in the firms that have high risk (Collins dan Kothari, 1989; Easton dan Zmijewski, 1989; dan Barth et al, 1998), and the firms that have high leverage (Dhaliwal et al, 1991; Dhaliwal dan Reynold, 1994; dan Billings, 1999).

Keywords: earnings response coefficients, book value response coefficients, risk and leverage.

Realitas Referensial Laba Akuntansi sebagai Refleksi Kandungan Informasi (Studi Intepretif-Kritis dari Komunitas Akuntan dan Non Akuntan)

Sekolah Tinggi Ilmu Ekonomi Indonesia (STIESIA) Surabaya


The main aim of the research is to understand the interpretation of accounting earnings by accountants and non-accountants, and its underlied accounting concepts. This research is motivated by the fact that accounting earnings is one of many simbols in the financial statements used to representing certain reality in the communication space. Equality of accounting earning interpretation in that communication space will determine the communication effectivity. Based on hermeneutics, or particularly named as an interpretive approach, the result of this research gives an understanding that accounting earnings are differently interpreted by accountants and non-accountants.In the accountants’ interpretation frame, accounting earnings are the signifier of enterprises’ economic reality changes, should not signify by the net cash inflows in the reporting period. However, in the non-accountants’ interpretation frame, the reality represented by accounting earnings sign is not clear: is that an economic reality, financial reality, or accounting reality, so that usefulness of accounting earnings information in decision making is low. Analogically, in the perspective of non-accountants, accounting earnings are not differ with the reality reflected from the cracked mirror. Nevertheless, in the everyday accounting practice, non accountants still accepted and used the accounting earnings information calculated based on the accounting and financial reporting standards. Implications of this research are the rising of the needs for: (a) decomposite of accounting and financial reporting standards that useful to accomodate the ”habitus” difference between accountants and non-accountants; (b) eliminate the hegemony in accounting practice; and (c) reasking of the meaning of ”generally accepted accounting principles”.

Key-Words: Accounting Earnings, Refferential Reality, Information Contents, Interpretation, Communication, Hegemony, Decomposition.

Tingkat Konservatisme Akuntansi di Indonesia dan Hubungannya dengan Karakteristik Dewan sebagai Salah Satu Mekanisme Corporate Governance

Universitas Indonesia


The objective of this research is to investigate the effect of board characteristics as part of corporate governance to conservatism in financial reporting. This research uses two measurements of conservatism, accrual as accounting based measure and book to market ratio as market based measure. Boards characteristics examine in this research are independency of boards, managerial ownership, and existence of audit committee. The result show that the existence of audit committee has a significant positive effect to conservatism measured by accrual, board independency has a significant positive effect to conservatism measured by book to market ratio, and managerial ownership has a significant negative effect to conservatism measured by book to market ratio. By using two proxy of conservatism, this research gives inconclusive evidence on the effect of board characteristic to conservatism. In conclusion, the effect of board characteristic to conservatism in financial reporting depends on the proxies to measure conservatism.
Keywords: conservatism, accrual, book to market ratio, corporate governance, board characteristics, board independency, managerial ownership, audit committee

Intellectual Capital dan Kinerja Keuangan Perusahaan: Suatu Analisis dengan Pendekatan Partial Least Square

Ihyaul Ulum
(FE Universitas Muhammadiyah Malang)
Imam Ghozali & Anis Chariri
(FE Universitas Diponegoro Semarang)


The purpose of this study is to investigate the association between the efficiency of value added (VAICTM) by the major components of a firm’s resource base (physical capital, human capital and structural capital) and three traditional dimensions of financial company’s performance: ROA, ATO, and GR. Data are drawn from 130 Indonesian banking sectors for three years (2004-2006). It is an empirical study using PLS for the data analysis. The findings show that: IC influences positively to financial company’s performance; IC influences positively to future financial company’s performance; and the rate of growth of a company’s IC (ROGIC) is not influences to the future financial company’s performance. Overall, the empirical findings suggest that human capital (VAHU) and profitability ROA remains the most significant indicator for VAICTM and financial company’s performance for three years. While physical capital (VACA) is significant only for 2006. The limitation of this research is: the data is drawn from all of Indonesian banking sectors, listed and unlisted, which have limited this research to choose the financial performance measure based on market value.

Key words: Intellectual Capital, VAICTM, company’s performance, Indonesian banking sector, partial least squares.

The Impact of Intellectual Capital Toward Financial Profitability and Investors' Capital Gain on Shares: An Empirical Investigation of Indonesia Banking and Insurance Sector fo Year 2005-2007

Mutiara Sianipar


The principal purpose of this research is to investigate the influence of efficiency of value added by the major components of a firm’s resource base (physical capital, human capital, and structural capital) towards financial profitability (indicated by return on asset and return on equity) and also investors’ capital gain on shares. Value Added Intellectual Coefficient™ (VAIC™) introduced by Pulic (2000) is used as proxy of firm’s effectiveness in managing its intellectual capital. Data is drawn from total of 22 and 10 samples of publicly traded banking and insurance firms respectively. Empirical analysis is conducted using linear multiple regression analysis. Findings from the empirical analysis on banking sector suggest that association between the efficiency of value added by a firm’s major resource bases and (1) return on asset, (2) return on equity, and (3) capital gain, are generally limited and insignificant. This condition is mainly due to unique characteristics of banking companies compare to other sectors. In contrast, findings from statistical regression analysis for insurance sector confidently proves that there are significant association between efficiency of value added intellectual capital toward financial profitability and investors’ capital gain. A major contribution of this research is that it increases the explanatory power of intellectual capital as valuable information for related parties in decision making and policy creation process especially in considering the growing significant role of banking and insurance companies in developing economies such as Indonesia. 

Keywords: physical capital, human capital, structural capital, profitability, return on asset, return on equity, capital gain, banking sector, insurance sector

Over the past years, there have been major changes in the global economy with the substantial increases in the number of companies working in service, knowledge-based company, dot.coms (internet based companies) and even virtual companies. We hear it echoed in the buzzwords of the day: Companies compete in a “knowledge economy,” skilled functions are performed by “knowledge workers,” and firms that improve with experience are “learning organization” (Klein, 1998). This condition lead to a new emerging concept in business world called as knowledge-based economy which exercises a different paradigm in the way business should create method and procedures to create value.

PSAK No. 5 (Revisi): Faktor yang Mempengaruhi Pengungkapan dan Dampaknya terhadap Forward Earnings Response Coefficient (FERC)

Fitriany SE, Msi, Ak.
Sandra Aulia
(Fakultas Ekonomi Universitas Indonesia)


PSAK 5 (revised) on segment reporting have been enacted in Indonesia since January 2, 2002. Prior to this PSAK, segment information of a company and its subsidiary are presented only by the grouping of business segments. Under the PSAK revisions, presentation of segment information becomes more complicated where the company should present segment information in the forms of primary and secondary. This study aims to determine the factors that influence the number of segments disclosed by a firm related to the issuance of PSAK 5 (revision). In addition, this study is also to investigate as to whether the adoption of PSAK 5 (revision) is able to increase the market ability to predict the firms’ future earning, as reflected in the forward earning response coefficient (FERC). The FERC is the association between current-year returns and next year earnings (stock price informativeness). This study uses financial statement data of listed manufacturing companies in the Indonesian Stock Exchange where the PRE period is 2000-2001 and POST period is2003-2004. This study found empirical evidence that the factors influencing the number of segments disclosure are size, complexity and competition. The study also proved that incremental effect occurs on FERC by increasing the number of segments disclosed in the POST period. In short, the application of PSAK 5 (revised) can increase the market’s ability to predict firms’ future earning. This is consistent with the purpose of applying PSAK 5 (revision) which is to help investors better understand the performance of a company and better assess the net cash flow of the future of a company.

Keywords: PSAK No. 5 (Revised 2000); Disclosure Of Segment; Forward Earning Response Coefficient.

The Influence of International Accounting Standards on Earnings Quality: Case in Japan

Masako Saito
Osaka Sangyo University, Japan
Sekar Mayangsari
Trisakti University


The purpose of this paper is to examine the impact of adoption of international accounting standard on earnings quality of Japanese companies in the convergence process for IFRS. The examination is focused on the persistence and accrual quality model. High-quality financial reports provide investors with the information and confidence necessary to invest in the global capital markets. A high-quality set of accounting standards enables investors to receive suitable information while considering the reasonable costs of implementing those standards. The contribution of this paper, especially for policy maker, is to give the policy maker for the future direction in standard setting. This paper also verifies the difference between the SEC rule companies and Japanese GAAP companies separated by the choice of accounting standards in Japan. There are some implications shown by the results. In Japan, it is clear that the choice of GAAPs changes the earnings quality. Furthermore, by using US GAAP can produce higher earnings quality.

Keywords: U.S.GAAP, Japanese GAAP, Earnings Quality

1. Introduction
High-quality financial reports provide investors with the information and confidence necessary to invest in the global capital markets. A high-quality set of accounting standards enables investors to receive suitable information while considering the reasonable costs of implementing those standards. Recent initiatives on convergence to a single set of high-quality global accounting standards have been well received by regulators, standard setters, the accounting profession, and business and academic communities worldwide. Companies in more than 100 countries have adopted a variation of International Financial Reporting Standards (IFRS) for their financial reporting purposes. Accounting has been regarded as “the language of business” and the question that has been recently raised is: “Can all accountants worldwide speak the same language?” In other words: “Is a set of globally accepted accounting standards feasible?” Is convergence to IFRS a real solution?1 This study attempts to provide answers to these questions by obtaining opinions and insights from a sample of academicians regarding the relevance, benefits, and ways of possible convergence in accounting standards.

Implementation of Good Corporate Governance and Financial Performance: Lessons from Telecommunication and Technology Sector in South East Asia

Didi Achjari2 (Staf Pengajar FEB UGM)
Sri Suryaningsum3 (Staf Pengajar FE UPN “Veteran” Yogyakarta)
Ratna Candra Sari4 (Staf Pengajar UNY)


Implementation of Good Corporate Governance (GCG) has been interesting topics in Indonesia as well as in many other countries. The current study aims to investigate GCG implementation especially in communication and technology companies in ASEAN countries. GCG implementation is measured using some surrogates such as corporate action, GCG elements in organization structure, public ownership, audited financial report, and return of total assets. Sample used in this study are technology and telecommuncation companies from six ASEAN countries. Data obtained from OSIRIS database from year 2005 to 2007 is examined using regression analysis. The study comes up with the following results. Factors that influence net profit is vary. In Indonesia, public ownership and corporate action affect net profit. In Malaysia, the influencing factors are corporate action, public ownership independence, quality of audited financial report, and return of total assets. Meanwhile, in Singapore the significant factors are corporate action, public ownership independence, and return of total assets. Further, Thailand results show that all variables are significant. However, Philippine results suggest all variables are not significant. Lastly, in Vietnam, corporate actions, the number of GCG members and return of total assests influence the net profit. Finally, the current study contributes in developing GCG organisation structure variable and also providing understanding of factors affecting GCG implementation in communication and technology companies in ASEAN 
Key words: Good Corporate Governance (GCG), ASEAN, corporate action, completeness of GCG organisation structure, public independency indicator, telecommunication and technology company.

I. Background
The economic turmoil hit ASEAN region in 1997-1999. The crisis which began in Thailand spread out to most countries in South East Asia and also other Asian countries. Many companies in these countries that did not implement good corporate governance were collapsed. Learning from that crisis, countries in ASEAN region then require companies especially in stock exchange to implement good corporate governance. Therefore, the GCG has been implemented in the stock exchange in South East Asia countries since 2000.

Indikasi Earnings Management pada Initial Public Offering

Moh. Adi Irawan
Tatang Ary Gumanti, M.Bus.Acc., Ph.D.
Universitas Jember


Earning Management is a phenomenon which enrichs accounting development. The aim of this research is to investigate whether companies which had gone public in 2000−2005 did earnings management in its Initial Public Offering which 61 companies (bank subsector excluded) is selected as sample. The research is combining method of Holland and Ramsay (2003); and Irawan and Gumanti (2008) in testing earnings management by analyzing earnings (NPAT) and cash flow operation (NCFO) behavior surround IPO. The assumption is the managers trying to manage earnings in prior and after go public periods to meet earning benchmark for maximizing offering price, because high offering price means high income for issuers. The result of this research divides in two periods. In the periods priors go public, neither change in NPAT nor NCFO significant in statistic. After go public, even though the movement of NPAT significant in statistic, the movement of NCFO is not significant in statistic. All in all, the research did not found any evidences that those companies manage earnings in the periods priors go public and after go public periods.

Keywords: Earnings management, IPO, Earnings, Cash flow operation, Benchmark

Simultanitas Aktivisme Institusional, Struktur Kepemilikan, Kebijakan Dividen dan Utang dalam Mengurangi Konflik Keagenan( Studi Empiris pada Perusahaan Go Public di Indonesia)

Universitas Muslim Indonesia (UMI) Makassar


This study investigated the simultaneaity of five financial variables that are hypothesized to agency problem. It builds a model showing that institution activism, institutional and managerial ownership, dividend and debt policy are determined simultaneously as each of the variables is hypothesized to decrease agency problem. Furthermore, the research is aimed at examining the effect of institution activism, ownership structure by institutional and managerial ownership on the financing decisions by dividend and debt policy. The research tested hypotheses by using Hausman’s specification test and two-stage least squares test. Hypotheses testing was conducted by using research sample of 70 manufacture company the registered in the Indonesia Stock ExcHange during the years of 2000-2006. The samples determined by using a purposive sampling method. The research tested one hypotheses by Hausman’s specification test and the research result shows that institution activism, institutional and managerial ownership, dividend and debt policy are determined simultaneously to decrease agency problem. The research tested other hypotheses by two-stage least squares test. The research results shows that institutional ownership has a significant affects on the dividend and negative significant affects on the debt policy. Further results, that institution activism has a significant affects on the debt policy and institutional ownership, and that managerial ownership negative significant affects on the institution activism. Other result, that relationship a substitute between the institutional and managerial ownership. On the contrary, result shows that institution activism do not have a significant affects on the dividend policy, and the managerial ownership do not have a significant affects on the dividend and debt policy. Finally, this study shows that dividend policy do not have a significant affects on the debt policy. 

Keywords : agency problem, institutional activism, institutional and managerial ownership, dividend and debt policy.

The Effect of Integrated Earnings Management on The Value Relevance of Earnings and Book Value of Equity

Imam Subekti
(University of Brawijaya)
Phua Lian Kee
Zamri Ahmad
(Universiti Sains Malaysia)


Previous studies examining relationship between earnings management and value relevance of accounting information show that earnings management decrease value relevance of accounting information. Generally, the studies apply accruals earnings management. In contrast, the present study applies integrated earnings management proxies i.e. real and accruals earnings management. Real earnings management proxies are measured by abnormal cash flow of operation, abnormal production cost, and abnormal discretionary expenses. On the contrary, accruals earnings management proxies are measured by short and long term discretionary accruals matched performance. The objective of the present study is to investigate the effect of the earnings management proxies integrated by factor analysis on value relevance of earnings and book value of equity. Results of the present study show earnings and book value of equity are relevant in measuring firm market value, and integrated earnings management decrease the value relevance of earnings and book value of equity.

Keyword: abnormal cash flow of operation, abnormal production cost, abnormal discretionary expenses, short and long discretionary accruals, integrated earnings management, value relevance of earnings and book value of equity.

Studies of value relevance of accounting information especially information of income number, and book value of equity have become the focus of many financial accounting research in America and also in Europe since in the last decades (see Collins, Maydew, and Weiss, 1997; Francis and Schipper, 1999; Brown, Lo, and Lys, 1999; Amir and Lev, 1996; Harris, Lang, and Moller, 1994). Research of value relevance of accounting information leads to studies attempt to find important information that can be used to value and to analyze firms in stock market. Research on value-relevance of accounting information is important and interesting to be examined in view of the different claim.

Pengaruh Kecakapan Managerial terhadap Managemen Laba dengan Kualitas Auditor sebagai Variabel Pemoderasi

Indra Isnugrahadi
Indra Wijaya Kusuma
Universitas Gadjah Mada Yogyakarta


The objective of this study is to investigate the impact of managerial ability on earnings management. Furthermore, this study also examines the effect of auditor quality on the relationship between managerial ability and earnings management. The sample of the study is the manufacturing companies listed in the Indonesian Stock Exchange. The number of the samples of the company is 99 (396 firms-year). The managerial ability is measured using Data Envelopment Analysis (DEA). The earnings management is measured using modified Jones model. The quality of auditor is measured using the perception of the users of financial report on auditor quality by categorized between auditor from big four audit firm (high quality) and auditor from non big four audit firm (low quality). The result indicated that the managerial ability had an impact on the earnings management. However, auditor quality did not have any impact on the relationship between managerial ability and earnings management.

Keywords: managerial ability, earnings management, auditor quality, Data Envelopment Analysis (DEA)

Tunneling, Overlapping Owner and Investor Protection: Evidence from Merger and Acquisition in Asia

Mas’ud Machfoedz
Ratna Candra Sari
Francisca Reni Retno Anggraini


Tunneling is to describe transfer resource out of the firm for benefit of their controlling shareholders. Better legal protection and stronger social norms improve minority shareholders' protection from expropriation. They consequently reduce the private benefits of controlling shareholders (La Porta, 1999). This study aims to investigate tunneling in the context merger and acquisition (M&A) and to examine whether tunneling occurs only in emerging markets with poor law enforcement or whether it also occurs in developed countries. This study documents that managers are more likely to overpay target in merger and acquisition with high overlapped owner which have stakes in bidder and target firm. That overpayment, a transfer of wealth from owners of bidder’s firm to overlapping owners, is a type of tunneling. This study concludes that tunneling occurs in nations not only with low investor protection, but also with high investor protection.

Key words: tunneling, expropriation, merger & acquisition, investor protection

Weak corporate law and lack of enforcement mechanism raise fears of expropriation for minority shareholders around the world. These fears seem especially warranted in the presence of business group, a common organizational form in many developed and developing countries. The controlling shareholders have strong incentives to siphon resources out of the firm to increase their wealth (Johnson, et al. 2000). Tunneling is to describe the transfer resource out of the firm for the benefit of their controlling shareholders. Tunneling occurs when someone transfer wealth from company where he has low right of cash flow to another company where he has higher right of cash flow (Johnson, et al. 2000). If prevalent, tunneling may have serious consequences. It can hinder equity market growth and overall financial development. Illicit profit transfers may also reduce the transparency of the entire economy, cloud accounting numbers and complicate any inference about firm health. The purpose of this study is to investigate tunneling in the context of merger and acquisition (M&A) with emphasis on both sides of M&A, bidder and target companies.

Is an Event Responded by Investors as a Non-event? Inquisitive Evidences when Differentiated between Foreign and Domestic Investors’ Reactions

Bambang Riyanto LS
S u m i y a n a
Universitas Gadjah Mada


This research investigates that merger and acquisition (M&A) announcements are able to stimulate abnormal return, rank of excess return and abnormal trading volume. Based on efficient market hypothesis and microstructure theory, it is predicted that price or return and trading volume will react to the M&A announcements. In this study, the market reactions are further examined for each type of investors: domestic and foreign. More specifically, the price movements of each of these two types of investors are analyzed thoroughly to explore if domestic investors have superior access to information than the foreign investors. This study finds that market do not react to the M&A announcement. It means that M&A news does not lead to positive abnormal return, rank of excess return and abnormal trading volume. This may suggest that M&A announcement has no information contents. Consequently, it also has no value relevance. It is argued that M&A announcements may have been fully anticipated by investors before it is made public (announced). Therefore, this study suggests that an information leakage exists in It is further argued that information leakage exists in Indonesia Stock Exchange (IDX) whenever M&A news announced. Finally, this study concludes that the information leakages are dominantly carried out by domestic investors as actors of insider trading.

Keywords: event study, domestic and foreign investors, abnormal return, rank of excess return, abnormal trading volume, information leakage, information contents, value relevance, insider trading

1. Introduction
This study attempts to examine the extent to which investors react to the news issued by firms in the Indonesian Capital Market. It is argued that the market may not perceive news issued by companies has information content. Fama (1978, 1991) argues that if investors believe that the news issued by firms conveys new information, then stock prices should immediately adjust to the new information. Alternatively, the market may not react to the news issued by firms. The debate about whether or not investors react to new information issued by companies is still going on; and the empirical evidence does not conclusively support the thesis that investors react to the new information, especially when the investors are classified as domestic and international. As Dvorak (2005) argues, foreignor domestic investors tend to destabilize the market to exploit short-run returns.

Further Evidence of Asymmetric Price Reaction from Emerging Capital Markets

Slamet Sugiri
Universitas Gadjah Mada
Universitas Gadjah Mada


This study investigates if emerging capital markets react asymmetrically to earnings shocks and if either firm-specific or market-wide approach explains the asymmetric reaction. This study is important because stock prices in emerging capital markets might not reflect firms’ fundamental values. Using data from Indonesia, Kuala Lumpur, and Philippines stock exchanges for the period of 2002-2007, this study finds that negative earnings shocks result in a greater price reaction than do positive ones and that only firmspecificapproach explains the asymmetric price reaction. These findings indicate that investors are overly optimistic and that stock prices do not reflect firms’ intrinsic values.

Keywords: earnings shocks, asymmetric reaction, firm-specific approach, market-wide regime shifting  behavior approach

1. Introduction
Earnings shocks—defined as the difference between actual earnings and expected earnings—have been posited to affect firms’ stock prices in a positive direction. That is, positive (negative) earnings shocks will lead to positive (negative) price reactions. The magnitude of the reaction, however, differs significantly. That is, the magnitude of reaction to positive earnings shocks is different from that to negative earnings shocks (Skinner & Sloan, 2002; Lopez & Rees, 2001; Conrad, Cornel & Landsman, 2002).

Analisis Reaksi Pasar terhadap Pengumuman Pergantian KAP (Studi pada Perusahaan Publik di Indonesia)

Marsela Diaz
Dosen Politeknik Negeri Pontianak
dan mahasiswa Program Magister Akuntansi Universitas Brawijaya


This research aims to examine the effect of auditor switching on the investor behavior which is indicated by market reaction. Market reaction is measured using cumulative abnormal stock returns around the announcement date of auditor switching. This research also classify auditor based on their size, i.e. the Big Four and non-Big Four. The reason for this classification is the notion that there is difference in audit quality between the Big Four and non-Big Four. The results of the analysis show that there is market reaction, which is indicated by negative cumulative abnormal stocks returns around the announcement date of auditor-switching to the switch are from Non-Big Four to the Big Four and from the Big Four to Non-Big Four. Based on these results I concluded that there is information content in the announcement of auditor switching, and investor perceived the announcement as bad news. The result also show that there is possibility investor do not perceived switching from Non-Big Four to the Big Four as companies’ effort to obtain better audit quality for their financial statements.

Keywords : Audit quality, auditor switching, cumulative abnormal stock returns, information content, market reaction.

Konservatisme Perusahaan di Indonesia dan Faktor-faktor yang Mempengaruhinya

Cynthia Sari
Desi Adhariani
Fakultas Ekonomi Universitas Indonesia


This research discusses the finanical statement conservatism level and its determinants. Obervations are done for manufacturing companies listen in Jakarta Stock Exchange in 2005 and 2007. The factors identified are debt/equity hypothesis (proxied by leverage ratio) and size hypothesis (measured by firms size, firm risk, capital intensity and concentration ratio of manufacturing industry). Conservatism level is measured by Non-Operating Accruals and Discretionary Accruals. Using multiple regression, the results show that concentration ratio, capital intensity and firm size are the significant factors.

Keywords: Conservatism, debt/equity hypothesis, size hypothesis.

Pengaruh Diversifikasi Korporat terhadap Excess Value Perusahaan Manufaktur, Perdagangan Grosir dan Eceran serta Properti dan Real Estate yang Terdaftar di BEI Tahun 2005-2007

Annaria Setionoputri
Institut Bisnis dan Informatika Indonesia
Carmel Meiden
Institut Bisnis dan Informatika Indonesia
Dergibson Siagian
Institut Bisnis dan Informatika Indonesia


In recently years, The increases of corporate diversification will become a core of debate, whether that diversification would bring an advantage for corporate or bring negative influence in a long term on competitive excellent company value. The Purpose of this research is to test the influence of corporate diversification to excess value. In this research, we estimated that diversification strategy will increase firm value, especially in manufacture, trading wholesale & retail, and properti & real estate sector in Indonesia. In relation with firm characteristics it shows that leverage, tobinsq, size, age of company, and total segmentsignificantly related with firm value.

Key words: diversification, excess value, firm value, segment sales.

Pengaruh Optimalisasi Jangka Pendek Managemen pada Tingkat Pengungkapan Wajib Informasi Perusahaan Sebelum dan Sesudah Perubahan Peraturan Undang-Undang Pengungkapan Laporan Tahunan

Paulina Sutrisno


This research is intended to conduct investigation on whether the short-term optimization by management in an effort to achieve certain earnings (avoiding a loss report and an earnings decrease report), will have an influence on the level of the mandatory disclosure of corporate information. This research also examines the difference on the level of disclosure by company suspected on conducting short-term management optimization in the conditions of before and after the amendment of the law on mandatory disclosure, which stresses the wideness on the corporate information disclosure. This research finding shows that the larger management conducts short-term optimization through a budget cut on discretionary expenditures, the lower the level of corporate information mandatory disclosure. This finding shows the new law on corporate information mandatory disclosure, which stresses the wideness on the corporate information disclosure in an effective way, can clearly detect companies conducting short-term optimization.

Keywords: real earnings management, short-term optimization, level of mandatory information disclosure.


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