Nur Anissa; Mukhlasin Mukhlasin; Thio Anastasia Petronila
Volume 6, Issue 6 , June 2019, , Pages 436-453
Abstract
Real earnings management reflects management intervention to manipulate earnings based on the company's normal business activities. This intervention is veiled and difficult to detect so it requires specialist auditors who expertise in industrial business practices. In the agency theory, the quality ...
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Real earnings management reflects management intervention to manipulate earnings based on the company's normal business activities. This intervention is veiled and difficult to detect so it requires specialist auditors who expertise in industrial business practices. In the agency theory, the quality auditors representing external governance serves to reduce asymmetric information between management and shareholders and minimize agency costs. Auditor quality is determined by the auditor's ability and independence to detect abnormal business practices. Industry specialization auditors have the competence, expertise, and skills to find out whether or not there are abnormal business practices for the purpose of earnings manipulation. Meanwhile, client importance that reflects the level of economic dependence of the auditor on the client encourages the auditor to be ignorant or tolerant of manipulation of business activities for the purpose of management opportunism. This research was conducted on manufacturing and trading companies listed on the Indonesia Stock Exchange in the 2012-2016 period. Observation is carried out on 430 data and analysis by multiple linear regression. The test results prove that the auditors of industrial specialization have a negative effect on real earnings management. Client importance also proved to have a positive effect on real earnings management.
Mukhlasin Mukhlasin; Nur Anissa
Volume 5, Issue 6 , June 2018, , Pages 448-460
Abstract
The information asymmetry between management and owners raises an opportunistic attitude of management to attach importance to its own interests. In this case, investors need additional information in addition to financial statements as a signal that can reduce information asymmetry. This study aims ...
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The information asymmetry between management and owners raises an opportunistic attitude of management to attach importance to its own interests. In this case, investors need additional information in addition to financial statements as a signal that can reduce information asymmetry. This study aims to prove empirically about the influence of internal controls and ethics disclosures against possible fraudulent financial reporting. This study also examines the relationship between management intentions that are reflected in earnings management with fraudulent financial reporting. The sample in this research is 740 data consist of 708 data fraud and 32 data non fraud. The study was conducted in non-financial companies listed on the Indonesia Stock Exchange for the period 2012-2015. The result of logistic regression analysis proves that information asymmetry can be reduced by voluntary disclosure ie internal control disclosure and ethics disclosure. Voluntary disclosure negatively affects fraudulent financial reporting. However, this study fails to identify earnings management as a sign of management intentions that can reduce information asymmetry.
