OSREL stie-mce
Online Search and Retrieval Library
Faculty Research
CORPORATE GOVERNANCE, FIRM SIZE AND EARNING MANAGEMENT : EVIDANCE IN INDONESIA STOCK EXCHANGE
| Detail | |
|---|---|
| Author | DWI LUSI TYASING SWASTIKA |
| ID | 202.710.138 |
| Published Date | 11-12-2012 |
Abstract
-Abstract Purpose - The purpose of this paper is to evaluate the impact of the corporate governance regulations implementation and firm size on the earning management for food and beverages companies in Indonesian Stock Exchange. Design/methodology/approach – The multiple regression is utilized to test this relationship at 95% confidence. Corporate governance was proxied by board of director, audit quality, and board independence. Firm size was represented by natural logarithm of total assets. Earning management was measured by Jones model with discretionary accruals. Findings – using data from the year 2005 annual reports of 51 food and beverages listed companies, including the composite index, the result showed that two of the corporate governance variables, namely board of director and audit quality, as well as firm size are statistically significant in explaining earning management measured by discretionary accruals. Research limitations/implications – The regulations on corporate governance were implemented in 2005, but not all of food and beverages listed companies implemented the regulations in 2005. Practical implications – An implication of this finding is that regulatory effort initiated after the 1997 financial crisis to enhance corporate transparency and accountability did not appear to result on better corporate performance. Originality/value – This is one of the few studies which investigates the impact of regulatory actions on corporate governance on earning management immediately after its implementation. Keyword: Corporate governance, Firm size, Earning Management. Paper type Research paper