OSREL stie-mce
Online Search and Retrieval Library
Faculty Research
THE INFLUENCE OF EARNINGS MANAGEMENT ON EARNINGS QUALITY
| Detail | |
|---|---|
| Author | RR. WIDANARNI PUDJIASTUTI (Tim: Ketua) |
| ID | 202.710.246 |
| Published Date | 26-07-2006 |
Abstract
This research objective is to examine empirically the influence of earnings management on earnings quality. The analysis units were 459 (153x3) manufacturing companies listed in the Jakarta Stock Exchange, started from the year 2002 up to 2004. Data used were archival ones. Sample selection was based on purposive sampling. Statistical method used to test the hypotheses was multiple regressions. The result of the research showed that: the influence of earnings management on earnings quality was 47.56%. It means that higher earnings management will be followed by higher earnings quality. Earnings management supports earnings responsive coefficient (ERC) that revealed on the fluctuation of market response as the symbol of market assurance towards financial statement especially on the earnings. The financial statement users assume that the reported earnings show managerial performance, through its responsive strength. The weak influence of earnings management on earnings quality means that the earnings management can not be detected by users, so that market will not give over response. It indicated that there is still chance for management to do the earnings management in the border of Standar Akuntansi Keuangan. Result of this study supported the results of Cho and Jung (1991), Subramanyam (1996), Pae (1999), Sankar (1999), Feltham and Pae (2000), Nelson et al. (2000), Scott (2000), Lobo and Zhou (2001), also Teixeira (2002).