Creative Accounting: Viewed from Risk and Sharia Compliance Perspective

Abstract

Company with a corporate form which is a result of the industrial revolution rises a principal and agent relationship. The separation between company’s owner and people who run the company makes accounting needs become more crucial. However, accounting which is a solution for communication between owners and management is often exploited by managers through creative accounting, also known as earnings management. This study aims to determine the effect of firm risk, tax risk, and sharia compliance on earnings management. The research was conducted on manufacturing sector companies listed on Indonesia Stock Exchange (IDX) in 2016-2019. Using purposive sampling method, the number of samples used is 69 companies with a total of 276 observations. The hypothesis examination used in this research is multiple linear regression analysis of pooled data. The result show that firm risk from the perspective of debtholders has a positive effect on earnings management. As for firm risk from equity holders’ perspective, tax risk, and sharia compliance has no effect on earnings management.

Analysis of Consumption Behaviour of Millennial Housewives: A Case Study in Pacitan Based on Al-Ghazali's Consumption Theory

“…Islam emphasizes how important this is because necessity is more valuable than desire. Desire is based on utility that tends to follow passions so that it can mislead humans on things that are forbidden by sharia (Noor & Sopian, 2023). In contrast, the need is based on a society that allows humans to consume it if the goods are good and bring benefits.…”