IJSTR

International Journal of Scientific & Technology Research

IJSTR@Facebook IJSTR@Twitter IJSTR@Linkedin
Home About Us Scope Editorial Board Blog/Latest News Contact Us
Scopus/Elsevier
CALL FOR PAPERS
AUTHORS
DOWNLOADS
CONTACT
QR CODE
IJSTR-QR Code

IJSTR >> Volume 9 - Issue 1, January 2020 Edition



International Journal of Scientific & Technology Research  
International Journal of Scientific & Technology Research

Website: http://www.ijstr.org

ISSN 2277-8616



The Role Of Corporate Governance On Earnings Quality From Positive Accounting Theory Framework

[Full Text]

 

AUTHOR(S)

Dian Saksessia Amrie Firmansyah*

 

KEYWORDS

Bonuses, Debt Covenant, Tax Avoidance, Corporate Governance

 

ABSTRACT

This study aims to examine the effect of bonuses, debt financing, tax avoidance and corporate governance on earnings quality as well as the role of corporate governance on the effect of bonuses, debt financing, tax avoidance on earnings quality. This research is quantitative research with multiple linear regression models. The sample used in this research is all nonfinancial companies listed on the Indonesia Stock Exchange (IDX). The type of data used in this study is secondary data in the form of financial statements and annual reports from 2012 to 2016. The sample selection using a purposive sampling method with the number of samples amounted to 344 observations. This study uses data with the same number of five years, so that this study employs panel data. This study suggests bonuses are negatively associated with earnings quality. This manager's opportunistic behavior is in line with the hypothesis plan bonus. Debt financing is positively associated with earnings quality. Tax avoidance is negatively associated with earnings quality. Corporate governance is not associated with earnings quality. Corporate governance is expected to be the company's control mechanism to reduce earnings management behavior, which can reduce earnings quality. Corporate governance does not weaken the influence of bonuses on earnings quality. The previous discussion has confirmed that corporate governance does not affect the quality of earnings, and after research, corporate governance is also unable to limit the opportunistic behavior of managers driven by bonus motivation. Corporate governance does not weaken the influence of debt financing on earnings quality. Corporate governance does not weaken the effect of tax avoidance on the quality of earnings. In line with the previous discussion, this result may suggest in Indonesia; corporate governance has not been considered as a need and corporate culture.

 

REFERENCES

[1] Aboughniem, M. S., Alsheikh I., Salh Z. A., M. AlAdham, & Emad Y. A. (2017). The impact of accounting factors on earning quality: a case study of commercial banks in Iraq. Jurnal of Research in Business, Economic, and Manajemen, 9 (3), 1698-1705.
[2] Adhikara, M. F. A. (2011). Creative accounting: apakah suatu tindakan illegal? Jurnal Akuntansi, 2, no. 2: 109-135.
[3] Anggreni, N. K., Putra, N.K.A.M., & Yasa, I. N. P. (2016). Peran corporate governance sebagai pemoderasi hubungan tax manajemen dengan kualitas laba. Jurnal Akuntansi dan Investasi 17, no. 1: 66 -78.
[4] Arizona, I. P. E., I. Mahaputra, N. K. A., & Anggreni, N. K. (2017). Pengaruh tax management pada kualitas laba dan corporate governance sebagai variabel moderasi. Jurnal Ilmiah Akuntansi dan Bisnis, 2 (1), 127-142.
[5] Balakrishnan, K., Blouin, J., & Guay, W. (2019). Tax Aggressiveness and Corporate Transparency. The Accounting Review, 94 (1), 45-69.
[6] Boediono, G. (2005). Kualitas laba: studi pengaruh mekanisme corporate governance dan dampak manajemen laba dengan menggunakan analisis Jalur. Solo: Simposium Nasional Akuntansi (SNA) ke VIII.
[7] Boulton, T. J., Scott, B. S., Chad, J. Z. (2011). Earning quality and international IPO underpricing. The Accounting Review, 86 (2), 483-505.
[8] Cheung, Y. L., Connelly, J. T., Estabislao, J. P., Piman L., Lu, T., & Utama, S. (2015). Corporate governance and firm valuation in asian emerging markets. Corporate Governance in Emerging Markets: Theories, Practices and Cases, 27-53.
[9] Ching, K., Firth, M., & Rui, O. M. (2002). Earning management, corporate governance, and the market performance of seasoned equity offerings. Hongkong: Lingnan University.
[10] Chtourou, S. M., Bedard, J., & Courteau, L. (2001). Corporate governance and earning management. Tunisia: University of Sfax.
[11] Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earning management. The Accounting Review, 70 (2), 193–225.
[12] Dechow, P. M., & Dichev, I. D. (2002). The quality of accruals and earnings: the role of accrual estimation errors. The Accounting Review, 77, 35-59.
[13] Dechow, P. M, Ge, W., & Schrand, C. M. (2010). Understanding earnings quality: a review of the proxies, their determinants and their consequences. Journal of Accounting and Economics, 50, 2-3, 344-401.
[14] Deegan, Craig. 2000. Financial Accounting Theory. Australia: McGraw Hill.
[15] DeFond, M. L., & Jiambalvo, J. (1994). Debt Covenant Violation and Manipulation of Accruals. Journal of Accounting and Economic, 17 (1-2): 145-176.
[16] Desai, M. A., & Dharmapala, D. (2006). Corporate tax avoidance and high-powered incentives. Journal of Financial Economics, 79 (1), 145–179.
[17] Dyreng, S. D., Hanlon, M., & Maydew, E. L. (2008). Long-run corporate tax avoidance. The Accounting Review, 83 (1), 61–82.
[18] Ferdiansyah, V. (2014). Pengaruh kualitas audit, kompensasi bonus, struktur kepemilikan, dan ukuran perusahaan terhadap manajemen laba. Jurnal Telaah Akuntansi dan Bisnis, 5 (2), 230-249.
[19] Fernandes, A., Cerquiera, A., & Brandao, E. (2017). Tax and financial reporting aggressiveness: evidence from Europe. Portugal: University of Porto.
[20] Francis, J., Olsson, P., & Schipper, K. (2006). Earnings duality. Foundation and Trends in Accounting, 1 (4), 259 – 340.
[21] Frank, M. M., Lynch, L. J., & Rego, S. O. (2009). Tax reporting aggressiveness and its relation to aggressive financial reporting. The Accounting Review, 8 (2), 467–496.
[22] Gao, P, & Shrieves, R. M. (2002). Earning management and executive compensation: a case of overdose of option and underdose salary. EFA 2002 Berlin Meetings Presented Paper.
[23] Ghosh, A., & Moon, D. (2010). Corporate debt financing and earnings quality. Journal of business finance dan accounting, 37 (5-6), 538 -559.
[24] Godfrey, J., Hodgson, A., Tarca, A., Hamilton, J., & Holmes, S. (2010). Accounting Theory 7th Edition. New York: McGraw Hill.
[25] Hapsari, A. N., Sulistya, & Steven Sindu Santoso. (2015). Analisis dividen sebagai indikator kualitas laba studi empiris perusahaan manufaktur sektor konsumsi yang terdaftar di Bursa Efek Indonesia. Dinamika Akuntansi, Keuangan dan Perbankan 4, no: 2: 106 –123.
[26] Healy, P. M. (1985). The effect of bonus schemes of accounting decisions. Journal of Accounting and Economics, 7, 85-107.
[27] Jaggi, B., Leung, S., & Gul, F. (2009). Family control, board independence and earnings management: evidence based on Hong Kong Firms. Jurnal Accounting and Public Policy, 28, 281-300.
[28] Jiang, W., Lee, P., & Anandarajan. 2008. The Association Between Corporate Governance and Earnings Quality: Further Evidence Using the GOV-Score. Advances in Accounting, incorporating Advances in International Accounting 24: 191–201.
[29] Jensen, Michael C., dan William H. Meckling. 1976. Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure. Journal of Financial Economics 3, no. 4: 305- 360.
[30] Jones, J. J. (1991). Earnings management during import relief investigations. Journal of Accounting Research, 29 (2), 193–228.
[31] Kamila, P. A., & Martani, D. (2014). Analisis hubungan agresivitas pelaporan keuangan dan agresivitas pajak. Mataram: Simposium Nasional Akuntansi (SNA) ke XVII.
[32] Kasznik, R. (1999). On the association between voluntary disclosure and earnings management. Journal of Accounting Research, 37 (1), 57 – 81.
[33] Khafid, M. (2012). Pengaruh tata kelola perusahaan dan struktur kepemilikan terhadap persistensi laba. Jurnal Dinamika Akuntansi, 4 (2), 139-148.
[34] Kothari, S. P., Leone, A. J, & Wasley, C. E. (2005). Performance matched discretionary accrual measures. Journal of Accounting and Economics, 39 (1), 163-197.
[35] Latif, K., Bhatti, A. A, & Raheman, A. (2017). Earnings quality: a missing link between corporate governance and firm value. Business dan Economic Review, 9 (2), 255-280.
[36] Larastomo, J., Halim D. P., Hanung T., & Eko A. S. (2016). Pengaruh tata kelola perusahaan dan penghindaran pajak terhadap manajemen laba pada perusahaan manufaktur di Indonesia. Jurnal Bisnis dan Manajemen, 6 (1), 63-74.
[37] Marfuah, Yogatama, H. (2014). Pengaruh mekanisme corporate governance, bonus plans, debt covenant, dan ukuran perusahaan terhadap manajemen laba. Aplikasi Bisnis, 16 (9), 2093-2121.
[38] Midiastuty, P. P., Machfoedz, M. (2003). Analisis hubungan mekanisme corporate governance dan indikasi manajemen laba. Surabaya: Simposium Nasional Akuntansi (SNA) ke VI.
[39] Miqdad, M. (2012). Praktik tata kelola perusahaan (corporate governance) dan usefulness informasi akuntansi. Jurnal Manajemen dan Kewirausahaan, 14 (2), 147-155.
[40] Naftalia, V. C., & Marsono. (2013). Pengaruh leverage terhadap manajemen laba dengan corporate governance sebagai variabel pemoderasi. Diponegoro Journal of Accounting, 2 (3), 188.
[41] Organization of Economic Co-operation and Development (OECD). 1999. OECD Principles of Corporate Governance. Paris: OECD Publications.
[42] ____________. 2004. OECD Principles of Corporate Governance. Paris: OECD Publications.
[43] Rachmawati, N. A., & Martani, D. (2017). Book-tax conformity level on the relationship between tax reporting aggresiveness and financial reporting aggresiveness. Australasian Accounting, Business and Finance Journal, 11 (4): 86-101.
[44] Randall, Z. X.., Taylor, G. K., & Dugan, M. T. (2007). Review of real earnings management literature. Journal of Accounting Literature, 26, 195-228.
[45] Sari, A. A. S. P. P., & Astika, I. B. P. (2015). Moderasi good corporate governance pada pengaruh antara leverage dan manajemen laba. E-Jurnal Akuntansi Universitas Udayana, 12 (3), 752-769.
[46] Siallagan, H., & Machfoedz, M. (2006). Mekanisme corporate governance, kualitas laba dan nilai perusahaan. Padang: Simposium Nasional Akuntansi (SNA) ke IX.
[47] Suryatiningsih, N., & Siregar, S. V. (2008). Pengaruh skema bonus direksi terhadap aktivitas manajemen laba (studi empiris pada badan usaha milik negara) periode tahun 2003 – 2006. Pontianak: Simposium Nasional Akuntansi (SNA) ke XI.
[48] Sutopo, B. (2012). Utang dan kualitas laba. Jurnal Akuntansi dan Manajemen, 23 (2), 79-86.
[49] Utomo, S. (2011). Skema bonus dewan direksi dan aktivitas manajemen laba (penelitian pada perusahaan manufaktur di BEI). Jurnal Dinamika Ekonomi dan Bisnis, 8 (1): 93-104.
[50] Valipour, H., & Moradbeygi, M. (2011). Corporate debt financing and earning quality. Journal of Applied Finance dan Banking, 1 (3), 139-157.
[51] Watts, R. L., & Zimmerman, J. L. 1990. Positive Accounting Theory: A Ten Year Perspective. The Accounting Review, 65 (1), 131–156.
[52] Widowati, M. (2013). Pengaruh corporate governance, bonus plan, dan firm size terhadap manajemen laba. Fokus Ekonomi, 8 (1), 39-51.
[53] Wijaya, V. A., & Christiawan, Y. J. (2014). Pengaruh Kompensasi Bonus, Leverage, dan Pajak terhadap Earning Management. Tax & Accounting Review, 4 (1).
[54] Wilson, R. J. (2009). An examination of corporate tax shelter participants. The Accounting Review, 84 (3), 969-999.
[55] Xie, B., Davidson, W. N., & DaDalt, P. J. (2001). Earning management and corporate governance: the roles of the boards and the audit committee. Journal of Corporate Finance, 9 (3), 295-316.
[56] Yanuar, A. D., & Restuti, M. D. (2015) Pengaruh corporate governance terhadap manajemen laba di industri perbankan indonesia. The 8th NCFB and Doctoral Colloquium 2015.