The Determinant Factors of Earnings Persistence

Oktavia, Mia; Susanto, Yulius Kurnia

doi:10.37479/jej.v4i1.13087

Cited by 5 publications

(10 citation statements)

References 13 publications

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“…As a result, investors pay no attention to cash flow in seeing the persistence level of profits, or there is only a neutral signal. This result is in line with Kasiono & Fachrurozie (2016), Prasetyna & Wuryani (2019), Oktavia &Susanto (2022), andJannah et al (2020), who stated that volatility in cash flow had no significant effect on earnings persistence. However, based on the result of the robustness, cash flow volatility in the consumer cyclical sector has a significant positive impact earnings persistence.…”

Section: Resultssupporting

confidence: 83%

“…The measurement of earnings persistence used by Jannah et al (2020) and Nurdiniah et al (2021) is to divide the difference between the changes in pre-tax earnings for the current year and pre-tax profit for the previous year by total assets. Meanwhile, other earnings persistence measurements were stated by Scott (2015) and also carried out by Oktavia & Susanto (2022) and Agustina et al (2021) to use the regression coefficient of current earnings to future earnings.…”

Section: Literature Review Earnings Persistencementioning

confidence: 99%

“…However, unlike the results obtained by Amaliyah & Suwarti (2017) and Ariyanti et al (2021), cash flow volatility had a significant positive effect on earnings persistence. While in the research of Kasiono & Fachrurozie (2016), Oktavia & Susanto (2022), Jannah et al (2020), andSukaesi (2016) found that cash flow volatility did not affect earnings persistence. Kasiono & Fachrurozie (2016) demonstrated that sales volatility had a significant adverse effect on earnings persistence.…”

Section: Introductionmentioning

confidence: 96%

“…It is also similar to the research of Amaliyah & Suwarti (2017) and Maharani & Majidah (2020) but different from the research of Jannah et al (2020), which stated that sales volatility had a significant positive effect on earnings persistence. Meanwhile, the research by Lasrya & Ningsih (2020), Oktavia &Susanto (2022), andPratikto et al (2021) concluded that there was no effect of sales volatility on earnings persistence.…”

Section: Introductionmentioning

confidence: 99%

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Earnings persistence determinants in Indonesia’s consumer goods companies

Paramaratri,

Setyorini,

Suparlinah

2023

J. Akun. Audit. Ind.

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This study aims to investigate the effect of various financial factors that affect the consumer product sectors in the Indonesia Stock Exchange earnings persistence. The study employed purposive sampling, the data were collected from the 2011-2020 annual financial statements, and analyzed by utilizing panel data regression. In the consumer cyclical industry, firm size and accrual amount negatively influence earnings persistence. In contrast, the impact of fluctuating cash flow, volatile sales, and debt levels was negligible. In the non-cyclical consumer sector, cash flow volatility positively influenced earnings persistence. However, debt levels and accrual amounts had a negative influence, while sales volatility and firm size had no effect. These findings suggest that the determinants of earnings persistence vary by industry and that different financial factors may affect earnings persistence differently. The results may help Indonesian stakeholders in comprehending the factors that affect the sustainability of revenues in the consumer products industry.

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Section: Resultssupporting

confidence: 83%

Section: Literature Review Earnings Persistencementioning

confidence: 99%

Section: Introductionmentioning

confidence: 96%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Earnings persistence determinants in Indonesia’s consumer goods companies

Paramaratri,

Setyorini,

Suparlinah

2023

J. Akun. Audit. Ind.

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“…Profits that do not show actual information about management performance can mislead the user of the report (Weerawardena, Salunke, Haigh, & Sullivan Mort, 2021). Profit can be said to be of high quality if the reported profit can be used by users of financial statements to make the best decisions and meet the qualitative characteristics of financial statements, namely relevant and reliability (Banjarnahor, 2019;Oktavia & Susanto, 2022;Susanto & Meiryani, 2019).…”

Section: Introductionmentioning

confidence: 99%

Strength of Capital Structure, Prudence and Audit Committee in Enhancing Profit Quality

Yunaldi¹,

Aprilia²

2022

Governors

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This study aims to determine the Effect of Capital Structure, Prudence and Audit Committee on Profit Quality. This study used a sample of manufacturing companies in the food and bavarages sub-sector listed on the Indonesia Stock Exchange during the period 2016 to 2020, the number of companies sampled in this study was 12 companies with observations for 5 years. Based on the purposive sampling method, the total sample of this study is 60 annual reports. The data collection method used is secondary data, which is data obtained by researchers indirectly through intermediary media and literature studies. The data in this study was obtained from the official website of the Indonesia Stock Exchange, namely www.idx.co.id and several company websites. From the results of the t test analysis (partial) shows that the Capital Structure and Prudence have a significant influence on the quality of profits. Meanwhile, the Audit Committee does not have a significant influence on the quality of profits. So, audit committee will not be too important to organized

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The effect of tax avoidance on earnings persistence: evidence from China

2024

JEAS

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PurposeThe purpose of this paper is to investigate the relationship between tax avoidance and earnings persistence in the light of a developing economy, with the main focus on China.Design/methodology/approachIn the analysis, the author conducts a survey on the tax avoidance situation of Chinese listed companies from 2012 to 2020. Then, a multivariate regression analysis is performed in order to analyse the relationship between corporate tax avoidance and earnings persistence.FindingsThe findings of the present study show that tax avoidance has a significant positive effect on earnings persistence. However, when the degree of tax avoidance is high, the “risk effect” of tax avoidance exceeds the “value effect”, and tax avoidance will reduce the persistence of earnings. This conclusion is even more prominent when the company is non-state-owned. Further research shows the increase of institutional investors’ shareholding ratio can improve “value effect” of tax avoidance, lessen “risk effect” of tax avoidance, and positively affect the relationship between tax avoidance and earnings persistence.Practical implicationsThis study provides evidence for investors to understand the dual effect of tax avoidance on earnings persistence. The results may have implications for regulatory bodies. They can provide a better understanding of the corporate governance role of institutional investors in curbing opportunistic tax avoidance.Originality/valueThis study enriches the research on tax avoidance effects by analysing the impact of tax avoidance on earnings persistence. This study also compensates for the shortcomings of analysing earnings persistence mainly from the perspective of tax differences in the past, and promotes the study of the corporate governance effects of institutional investors under different levels of tax avoidance.

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The Determinant Factors of Earnings Persistence

Cited by 5 publications

References 13 publications

Earnings persistence determinants in Indonesia’s consumer goods companies

Earnings persistence determinants in Indonesia’s consumer goods companies

Strength of Capital Structure, Prudence and Audit Committee in Enhancing Profit Quality

The effect of tax avoidance on earnings persistence: evidence from China

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