The Effects of Corporate Governance, Firm Size, Profitability, and Growth Opportunities on the Value Relevance of Accounting Earnings – A Study of the Indonesia Stock Exchange

Putri, Surinastiti Eka; Panggabean, Rosinta Ria

doi:10.31937/akuntansi.v12i2.1702

Cited by 6 publications

(8 citation statements)

References 14 publications

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“…Large companies have a lot of assets, hence their asset to liability ratio will be high. Previous research has shown that there is a link between the size of a company and its stock price (Odoemelam et al, 2019;Putri & Panggabean, 2020).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…The prospect of the company's future growth is explained by growth opportunities. The bigger the company's potential for growth, the greater the company's ability to make earnings in the future (Putri & Panggabean, 2020). This will undoubtedly have an impact on the value relevance of accounting earnings.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…The value significance of accounting earnings is increased in a company with high and stable profitability. This can be attributed to profitable operations and prudent asset management (Putri & Panggabean, 2020).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…This insignificant effect of profitability on the value relevance of accounting information could be because even though the net profits generated had increased, the increase was insignificant, causing the net earnings information disclosed to be unrepresentative of the whole information required by investors. The increase in the relevance of accounting information is positively influenced by company attributes, especially profitability (Putri & Panggabean, 2020). This indicates that ROA companies have not experienced any changes at the time of XBRL adoption, there has been no positive response from investors (Razak et al, 2019).…”

Section: Profitability Has a Positive Effect On Value Relevancementioning

confidence: 99%

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The Importance of Value Relevance in The Indonesian Manufacturing Sector

2022

QAS

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This study aims to describe the importance of value relevance in the Indonesian manufacturing sector. Along with the capital market industry development, the need for information on these reports that interested parties can use is increasingly high. A company will benefit from adjusting the company's structure and developing and utilizing more innovative financial instruments. The information presented by the financial statements of publicly traded companies must have a qualitative value that is the value of relevance. This study analysis consists of concluding analysis, predicting the implications of the facts of weaknesses found, and providing recommendations. The method used in this study is a quantitative description of the population of manufacturing companies listed on the Indonesia Stock Exchange during the period 2017-2019. The data analysis method uses multiple regression analysis by the SmartPLS program, and the data was collected from 187 annual reports from manufacturing companies. The results of this study have a significant positive effect of company size on value relevance, while there is no significant positive effect on XBRL, sales growth and profitability on value relevance. For future research, it is suggested to add variables such as Corporate Governance, Asymmetry Information, Stakeholder Engagement, Auditor Reputation, and Industry Type to further explain the important role of value relevance.

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Section: Hypotheses Developmentmentioning

confidence: 99%

Section: Hypotheses Developmentmentioning

confidence: 99%

Section: Hypotheses Developmentmentioning

confidence: 99%

Section: Profitability Has a Positive Effect On Value Relevancementioning

confidence: 99%

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The Importance of Value Relevance in The Indonesian Manufacturing Sector

2022

QAS

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“…Peluang pertumbuhan dijadikan sebagai penentu prospek perusahaan dalam perkembangannya sehingga perusahaan membutuhkan dana yang besar dari hasil investasi pemegang saham untuk mendanai operasionalnya (Putri & Panggabean, 2020). Peluang pertumbuhan perusahaan dibuktikan memiliki hubungan positif terhadap manajemen laba berdasarkan penelitian Debnath (2017) dan Fung & Goodwin (2013).…”

Section: Peluang Pertumbuhan Perusahaan Terhadap Manajemen Labaunclassified

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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Value relevance of accounting information in Morocco: impact of profitability and earnings management strategies

Ibrahimi,

El Baghdadi

2024

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PurposeThis study examines the value relevance of accounting information for publicly listed Moroccan companies and analyzes how profitability affects stock market valuation. Additionally, the study explores earnings management strategies used to avoid losses and earnings decreases.Design/methodology/approachEmpirical tests use the Ohlson (1995) Price model to assess the extent to which accounting information explains variation in stock prices for the period 2012–2021. Moreover, the study applies the Burgstahler and Dichev (1997) approach to analyze earnings management strategies used by listed Moroccan companies.FindingsThe findings suggest a positive and significant relationship between the book value, net earnings and the market value of stocks. Additionally, profitability is identified as a crucial factor significantly influencing the relevance of accounting figures. Moreover, the analysis of the distribution of earnings reveals that listed Moroccan companies engage in earnings management to avoid losses and decreases in earnings.Practical implicationsThe findings hold practical significance for investors, corporate leaders, accountants and stakeholders relying on accounting information for decisions. They also offer insights for Moroccan stock market regulators to improve accounting quality and market efficiency.Originality/valueThe study shows the extent to which stock prices reflect the accounting information from an emerging country perspective, contributing to a predominantly unexplored area of literature regarding economies in transition. Moreover, the study offers crucial insights into the influence of profitability on the market value of listed Moroccan companies and sheds light on the utilized earnings management strategies.

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The Effects of Corporate Governance, Firm Size, Profitability, and Growth Opportunities on the Value Relevance of Accounting Earnings – A Study of the Indonesia Stock Exchange

Cited by 6 publications

References 14 publications

The Importance of Value Relevance in The Indonesian Manufacturing Sector

The Importance of Value Relevance in The Indonesian Manufacturing Sector

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

Value relevance of accounting information in Morocco: impact of profitability and earnings management strategies

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