Effect of Bid Ask Spread, Profitability, and Free Cash Flow on Earning Management

Bangun, Nurainun

doi:10.24912/ja.v23i3.613

Cited by 6 publications

(9 citation statements)

References 9 publications

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“…Due to the lack of a direct measure of information asymmetry between inside management and investors, previous studies have mostly focused on the fact that in information-asymmetric environments, the opinions of informed traders who have special access to a firm’s private information and those of uninformed traders will differ regarding the price of the firm’s stock (Jiang et al , 2011; Sabet and Heaney, 2015). In this regard, the bid–ask spread is the predominant proxy used for information asymmetry, owing to its strong theoretical and empirical associations with information asymmetry between informed and uninformed traders (Bangun, 2019; Veronica and Bachtiar, 2014). The bid–ask spread is essentially the difference between the bidding and asking prices of a given stock.…”

Section: Methodsmentioning

confidence: 99%

Dividend and investment decisions in asymmetric information environments: evidence from the restaurant industry

Gim

Jang²

2022

IJCHM

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Purpose This study aims to examine how information asymmetry, which refers to an information gap between a firm’s management and its investors regarding the firm’s true value, influences firms’ dividend and investment decisions in the restaurant industry. This study also investigated the moderating role of a firm’s level of franchising in the relationship between information asymmetry and these behaviors of restaurant firms. Design/methodology/approach This study used generalized method of moments panel regression analyses. Principal component analysis was also used to create a composite index of information symmetry. Findings This study demonstrated that in asymmetric information environments, restaurant managers tend to reduce dividend payments. In addition, this study showed that information asymmetry leads to restaurant managers’ investment inefficiency. However, the investment inefficiency of the restaurant industry was found to decrease as restaurant firms’ level of franchising increases. Practical implications Firms’ dividends and investment decisions are of great interest to investors because these decisions heavily influence investors’ wealth-maximization goals. By shedding light on the previously unrecognized determinants of dividend and investment behaviors in the restaurant industry, this study helps individual investors to make informed investing decisions. Originality/value Conflicting arguments can be made regarding the impact of asymmetric information environments on the dividend and investment behaviors of restaurant firms. This study aimed to verify these as-yet unclear relationships in the restaurant industry.

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Section: Methodsmentioning

confidence: 99%

Dividend and investment decisions in asymmetric information environments: evidence from the restaurant industry

Gim

Jang²

2022

IJCHM

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“…Research conducted by Harahap (2021), Wijaya et al (2020), and Bangun (2019) show that profitability has a positive effect on earnings management. Research conducted by Millenia and Tjhai (2021), Almalita (2017), and Chandra and Djashan (2018) shows that profitability has no effect on earnings management.…”

Section: Return On Assets and Earnings Managementmentioning

confidence: 99%

The Analysis of The Effect of Profitability and Other Factors on Earnings Management

Hiudy,

Djashan

2023

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The objective of this research is to obtain empirical evidence of independent variables related to earnings management in non-financial companies. The independent variables used in this research are managerial ownership, institutional ownership, firm size, leverage, return on assets, sales growth, board size, and audit committee. This research used companies listed in non-financial sectors in Indonesia Stock Exchange from 2019 until 2021. There are 321 sample datas selected by using purposive sampling method. The model used in this research is multiple regression analysis. The result of this research shows that return on assets has an effect on earnings management. On the other hand, other independent variables, such as, managerial ownership, institutional ownership, firm size, leverage, sales growth, board size, and audit committee have no effect on earnings management.

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“…Return-on-asset yang besar menyebabkan keuntungan yang dihasilkan perusahaan juga besar. Hal ini berdampak pada manajemen untuk melakukan manajemen laba supaya dapat menerima kepercayaan dari investor (Bangun, 2020). Hasil penelitian mengenai ukuran perusahaan didukung oleh Teori Keagenan bahwa semakin besar perusahaan memungkinkan perusahaan melakukan tindakan manajemen lab.…”

Section: Efek Moderasi Kualitas Audit Dalam Pengaruh Tingkat Pendidik...unclassified

Moderasi Kualitas Audit dalam Pengaruh Karakteristik Demografi CFO terhadap Manajemen Laba

Juany

Suparman

2022

EKOMBIS

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Penelitian ini bertujuan untuk mengetahui efek moderasi dari kualitas audit dalam pengaruh karakteristik demografi CFO terhadap manajemen laba pada perusahaan non-keuangan. Karakteristik CFO diwakili oleh gender dan tingkat pendidikan CFO. Penelitian kuantitatif ini menganalisis data dari 172 laporan tahunan perusahaan non keuangan yang terdaftar selama periode 2017-2021 di Bursa Efek Indonesia. Metode untuk menguji hipotesis adalah Moderated Regression Analysis (MRA). Temuan penelitian ini menunjukkan bahwa tidak terdapat pengaruh langsung yang signifikan antara gender dan tingkat pendidikan CFO terhadap manajemen laba. Kualitas audit juga tidak terbukti mempunyai efek moderasi dalam pengaruh karakteristik demografi CFO terhadap manajemen laba pada perusahaan sampel. Temuan ini menunjukkan bahwa keberadaan CFO wanita tidak dapat mengurangi konflik agensi dalam mengelola pendapatan. Temuan juga tidak dapat mendukung "Teori Eselon Atas" bahwa keputusan perusahaan secara langsung dipengaruhi oleh karakteristik individu. Temuan ini memperkuat argumentasi bahwa gender CFO perusahaan di negara berkembang tidak berpengaruh signifikan dalam pengambilan keputusan, demikian juga dengan tingkat pendidikan CFO. Temuan tersebut diperkuat dengan kondisi bahwa CFO tidak dapat mengambil keputusan akhir karena masih dipertimbangkan kembali oleh CEO. Hasil penelitian ini menyarankan investor untuk lebih mempertimbangkan karakteristik CEO sebagai manajemen puncak perusahaan. Selain itu, sebaiknya investor tidak hanya bergantung pada hasil audit yang baik karena tidak menjamin perusahaan tidak melakukan praktik manajemen laba. Hal ini dikarenakan adanya risiko litigasi yang minim dan kurangnya jangkauan auditor dalam memantau tindakan praktik manajemen laba di suatu perusahaan.

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Effect of Bid Ask Spread, Profitability, and Free Cash Flow on Earning Management

Cited by 6 publications

References 9 publications

Dividend and investment decisions in asymmetric information environments: evidence from the restaurant industry

Dividend and investment decisions in asymmetric information environments: evidence from the restaurant industry

The Analysis of The Effect of Profitability and Other Factors on Earnings Management

Moderasi Kualitas Audit dalam Pengaruh Karakteristik Demografi CFO terhadap Manajemen Laba

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