Sarumpaet, Susi (2016) Do Polluters Manage Earnings Downwards? A case of Indonesian Listed Companies. In: 13th Annual World Congress of the Academy for Global Business Advancement (AGBA), 26-28 November 2016, Surakarta, Indonesia.

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This paper examines whether polluting firms manage earnings downwards to reduce the political costs expected to arise from poor environmental performance ratings issued by a government agency. Using a sample of listed Indonesian firms from 2002 through 2010, discretionary accruals estimates are regressed against subsequent negative versus positive ratings issued by the Indonesian Ministry of Environment, while controlling for firm size, auditor choice, and industry sensitivity to the environment. The results are consistent with the predictions based on political cost hypothesis, with a significant relation between earnings management and subsequent environmental performance. Keywords: environmental peformance rating, discretionary accruals, earningsmanagement, political cost.

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Depositing User: Susi Sarumpaet
Date Deposited: 18 Oct 2019 03:14
Last Modified: 18 Oct 2019 03:14

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