Effect of Leverage on Real Earnings Management: Evidence from Korea

Tulcanaza-Prieto, Ana Belén; Lee, Younghwan; Koo, Jeong-Ho

doi:10.3390/su12062232

Cited by 15 publications

(12 citation statements)

References 38 publications

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“…Dalam penelitian ini ada enam variabel kontrol yaitu asset tangibility, umur perusahaan, net interest payment, pertumbuhan penjualan, return on assets dan kas. Asset tangibility diukur dengan membagikan aset tetap pada jumlah aset (Tulcanaza-Prieto et al, 2020). Umur perusahaan diukur dengan jumlah tahun perusahaan tersebut telah berjalan (Alhmood et al, 2020;Qawasmeh & Azzam, 2020).…”

Section: 𝑅𝑎𝑠𝑖𝑜 𝑈𝑡𝑎𝑛𝑔 𝐽𝑎𝑛𝑔𝑘𝑎 𝑃𝑒𝑛𝑑𝑒𝑘 = 𝑈𝑡𝑎𝑛𝑔 𝐽𝑎𝑛𝑔𝑘𝑎 𝑃𝑒𝑛𝑑𝑒𝑘 𝐽𝑢𝑚𝑙𝑎ℎ 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑎𝑠unclassified

“…Ukuran perusahaan memiliki pengaruh signifikan negatif terhadap manajemen laba sehingga semakin besar perusahaan dengan transaksi dan operasional yang banyak justru memicu manajemen untuk melakukan manipulasi laba seperti dengan mengurangi biaya pajak. Maka, hipotesis 4 diterima dan selaras dengan penelitian Mahawyahrti & Budiasih (2017) dan Tulcanaza-Prieto et al (2020). Rasio lancar memiliki hasil yang tidak signifikan, sehingga kemampuan perusahaan dalam membayar utang lancarnya tidak mempengaruhi keputusan manajemen untuk mencoba melakukan manipulasi laba.…”

Section: Hasil Dan Pembahasanunclassified

“…Sehingga ketika perusahaan memiliki utang jangka panjang memicu manajemen yang semakin tinggi motivasinya untuk mengubah informasi sebenarnya dengan menurunkan jumlah utang jangka panjang daripada angka yang sebenarnya. Hasil ini sesuai dengan penelitian terdahulu Christiawan & Rahmiati (2015) dan Tulcanaza-Prieto et al (2020).…”

Section: Hasil Dan Pembahasanunclassified

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Pengaruh Karakteristik Perusahaan, Kinerja Perusahaan, Dan Management Entrenchment Terhadap Manajemen Laba

Tang

Fiorentina

2021

JEBIK

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The purposes of this study is to investigate the impact of firm characteristics, firm performances, and management entrenchment on earnings management by using firms registered on Bursa Efek Indonesia for the period 2015-2019. Sampling method that is used in this study is purposive sampling method so the objects should meet the criteria. The exception sample for this study is financial firms due to differences on some regulations of reporting and firms without complete annual and financial report published for the period 2015-2019. The secondary data were obtained from firms’ financial report and annual report that were published on the firms’ official website and Bursa Efek Indonesia’s website. In this study, earnings management is measured with Modified Jones Model. This study analyzed using fixed effect model approach panel data regression analysis. The results show that growth opportunities, board size, current ratio, auditor size, financial statement, and CEO ownership have no significant influences. Leverage, firm size, asset growth and turnover, and cash flow show significant negative influences. On the other hand, long-term and short-term debts, and CEO tenure show significant positive influences. Some results are not compatible with hypothesis since there are limitations on the period time and methods that were chosen. ABSTRAKPenelitian ini dilakukan dengan tujuan untuk meneliti adanya pengaruh dari karakteristik perusahaan, kinerja perusahaan, dan management entrenchment terhadap manajemen laba dengan menggunakan perusahaan yang terdaftar di Bursa Efek Indonesia periode 2015-2019. Metode pengambilan sampel yang digunakan dalam penelitian ini adalah metode purposive sampling sehingga objek penelitian harus sesuai dengan kriteria. Sampel data yang dikecualikan adalah perusahaan keuangan atau finansial karena memiliki regulasi pelaporan yang berbeda dan perusahaan yang tidak memiliki kelengkapan laporan keuangan dan laporan tahunan periode 2015-2019. Data sekunder diperoleh dari laporan keuangan dan laporan tahunan perusahaan yang dipublikasikan pada website resmi perusahaan dan website Bursa Efek Indonesia. Dalam penelitian ini, manajemen laba diukur dengan Modified Jones Model. Penelitian ini dianalisis menggunakan analisis regresi data panel dengan pendekatan fixed effect model. Hasil pengujian menunjukan bahwa peluang pertumbuhan, ukuran dewan direktur, rasio lancar, ukuran auditor, laporan keuangan, dan kepemilikan direktur utama tidak memiliki pengaruh signifikan. Sedangkan leverage, ukuran perusahaan, pertumbuhan dan perputaran aset, dan arus kas operasional memiliki pengaruh signifikan negatif terhadap manajemen laba. Utang jangka panjang dan pendek, serta masa jabatan direktur memiliki pengaruh signifikan positif. Hasil pengujian yang tidak sesuai dengan hipotesis dapat disebabkan karena adanya keterbatasan dalam periode waktu dan metode pengukuran yang digunakan.JEL : M410, M480

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Section: Hasil Dan Pembahasanunclassified

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Pengaruh Karakteristik Perusahaan, Kinerja Perusahaan, Dan Management Entrenchment Terhadap Manajemen Laba

Tang

Fiorentina

2021

JEBIK

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“…The study concluded that when companies experience financial difficulties, they will carry out earnings management by changing their operating profits. Nevertheless, there is also the proof that companies undertake real earnings management (Kothari et al, 2016;Nasir et al, 2018;Tulcanaza-Prieto et al, 2020) and real earnings management might have a bigger effect than accrual earnings management since it is not only revamping the accounting records but also the behavior of the firm. Besides, accrual-based earnings management is vulnerable to scrutiny, therefore, can be easily noticed by auditors and regulators.…”

Section: Financial Distress and Earnings Managementmentioning

confidence: 99%

Financial Distress and Earnings Management in Indonesia: The Role of Independent Commissioners

2021

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This research aims to find out whether the presence of independent commissioner can restrict the manipulation of earnings by management in financially distressed companies. Earning management used in this research is accrual as well as real earning management. This research employs quantitative method with data panel regression model. The sample used in this study is secondary data obtained from consumer goods industry listed on Indonesia Stock Exchange during the period of 2015 until 2019. The result of this study revealed that both accrual earnings management and real earnings management are significantly influenced by financial distress. However, independent commissioner fails to moderate the relationship of financial distress with both accrual earnings management and real earnings management. This research gives an insight and input to the management as the evaluation material, so that the earnings manipulation could be reduced or even not carried out. Abstrak: Penelitian ini bertujuan untuk mengetahui apakah keberadaan komisaris independen dapat membatasi manipulasi laba oleh manajemen pada perusahaan yang mengalami financial distress. Manajemen laba yang digunakan dalam penelitian ini adalah manajemen laba akrual dan manajemen laba riil. Penelitian ini menggunakan metode kuantitatif dengan model regresi data panel. Sampel yang digunakan dalam penelitian ini adalah data sekunder yang diperoleh dari industri barang konsumsi yang terdaftar di Bursa Efek Indonesia selama periode 2015 hingga 2019. Hasil penelitian ini mengungkapkan bahwa baik manajemen laba akrual maupun manajemen laba riil dipengaruhi secara signifikan oleh financial distress. Namun, komisaris independen gagal memoderasi hubungan financial distress dengan manajemen laba akrual dan manajemen laba riil. Penelitian ini memberikan wawasan dan masukan kepada pihak manajemen sebagai bahan evaluasi, sehingga manipulasi laba dapat dikurangi atau bahkan tidak dilakukan.

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“…Roychowdhury (Roychowdhury, 2006) documents that managers from high-leverage firms manipulate real earnings, activities by, (1) providing price discounts to temporarily increase the sales volume, (2) overproducing inventory to decrease the cost of goods sold (COGS), or (3) cutting discretionary expenses to improve the reported margins. Tulcanaza-Prieto, Lee, and Koo (Tulcanaza-Prieto, Lee, et al, 2020) also reports the positive relationship between leverage and REM using quarterly financial data. Therefore, firms might increase their REM activities (1) to show stable results and fewer volatile earnings to their lenders and future investors (Burgstahler & Dichev, 1997;Wijesinghe & Kavinda, 2017), (2) to reduce their debt covenant violations, contraventions, and penalties (Y.…”

Section: ⅰ Introductionmentioning

confidence: 99%

Leverage, Corporate Governance and Real Earnings Managem ent: Evidence from Korean Market

Tulcanaza-Prieto¹,

Lee²,

Koo³

2020

Glob Bus Financ Rev

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This study examines how corporate governance (CG) and leverage simultaneously influence real earnings management (REM). Methodology: We employed CG score (CGS), total, short-term, and long-term debt ratios as independent variables, and REM metrics as dependent variables. We include ordinary least-squares (OLS) panel data regressions, residual test, and interaction analysis in our study. Findings: While a significant positive relationship existed between leverage and REM, CG had a negative effect on real manipulations. Our results from the interaction analysis and residual test show that CG is a key player in explaining the relationship between leverage and REM. We also find that firms with a low-level of CG were more likely to conduct REM activities than those with a high-level CG. Research limitations/implications: These results imply that the reduction in opportunistic behavior of managers in the presence of strong CG could decrease the leverage of firms and REM activities and improve the quality of their earnings. Moreover, shareholder rights and audit organizations were the prominent CG characteristics influencing REM activities, as they enforce additional monitoring of financial reporting quality and increase audit standards. CG strategies mitigate the corporate corruption scandals through the adoption of high-quality accounting and financial norms in reporting and management. Thus, executives decrease their incentives to conduct REM activities and leverage cannot be used freely as a mechanism to manipulate earnings, given firms' leverage position is audited and reviewed by the financial committee in firms with strong CG. For future research, the authors suggest including the degree of leverage as a disaggregation sample and adding the degree of cost stickiness. Originality/value: Several studies have investigated either the relationship between (1) REM and leverage, or (2) REM and CG, including leverage as a control variable. Our study, extends this bilateral relationship to simultaneous relationship between leverage, CG, and REM. Moreover, we investigate the predominant CG characteristics that influence the association among leverage and REM. We conduct interaction analysis and residual effect to investigate if CG should be considered as a determinant variable in the recurrence of REM activities of managers. We include firms with high-and low-levels of CG to show which firms are leveraged.

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Effect of Leverage on Real Earnings Management: Evidence from Korea

Cited by 15 publications

References 38 publications

Pengaruh Karakteristik Perusahaan, Kinerja Perusahaan, Dan Management Entrenchment Terhadap Manajemen Laba

Pengaruh Karakteristik Perusahaan, Kinerja Perusahaan, Dan Management Entrenchment Terhadap Manajemen Laba

Financial Distress and Earnings Management in Indonesia: The Role of Independent Commissioners

Leverage, Corporate Governance and Real Earnings Managem ent: Evidence from Korean Market

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