Sarumpaet, Susi (2015) The Effect of Environmental Problems and Financial Problems on Earnings Management. In: The 16th Asian Academic Accounting Association Annual Conference, 15-18 November, 2015, Bandung, Indonesia.

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This study aims to examine the effect of environmental and financial problems faced by Indonesian listed firms on earnings management practices. The sample was taken from non-financial companies listed in IDX in 2011-2015. Environmental problems and financial problems were identified from the news media where the sample firms were reported to have related issues. Earnings management is calculated using accrual-based earnings management and real earnings management. Three control variables were included in the model: firm size, leverage and profitability. The sample was selected using purposive sampling method resulted in 220 observations consisting of 44 companies in five year periods. The model was run using multiple regression analysis. The result shows that environmental problems have a positive effect on accrual-based earnings management and therefore provides evidence that supports the political cost hypothesis. While financial problems have no significant effect on accrual-based earnings management. This study also finds that both environmental and financial problems have no association with real earnings management.

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Fakultas Ekonomi dan Bisnis (FEB) > Prodi Akuntansi
Depositing User: Susi Sarumpaet
Date Deposited: 08 Aug 2021 15:25
Last Modified: 08 Aug 2021 15:25

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