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International Journal of Scientific & Technology Research

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IJSTR >> Volume 8 - Issue 9, September 2019 Edition



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

Website: http://www.ijstr.org

ISSN 2277-8616



The Influence Of Investment Opportunities Set On The Profit Predictive Information In Profit Management

[Full Text]

 

AUTHOR(S)

Rakhmini Juwita

 

KEYWORDS

earnings management, profitability, the investment opportunity set.

 

ABSTRACT

This study aims to examine the effect of moderation on the investment opportunity set on the relationship between earnings management and the predictive content of earnings management. Earnings management is now predicted to affect future profitability because earnings management now affects the level of earnings quality in the current year. In the end, the quality of earnings now affects the quality of earnings the following year and affects the level of profitability of the company as well. This study also aims to look at the effect of moderation of investment opportunity sets on the relationship between present earnings management on the company's future profitability. If the company has a high set of investment opportunities, monitoring from outside shareholders will become low. Lack of control results in high-profit management. Therefore, moderation of investment opportunity sets strengthens the effect of earnings management and ultimately affects the future profitability of the company. The research was conducted on manufacturing companies listed on the Indonesia Stock Exchange in 2012-2017. This study found evidence that earnings management which has predictive content on earnings is the company's profitability (ROI). This study indicates that there is indeed an interaction effect between current earnings management and investment opportunity sets on the company's future profitability

 

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