The Relationship of Reserve Account Disclosure Transparency and Accrual Earning Management with Audit Quality as Moderating

Latifah binti Nono(1), Siti Khomsatun(2),

DOI: https://doi.org/10.15294/jda.v10i1.13183


(1) Sekolah Tinggi Ekonomi Islam TAZKIASTEI Tazkia
(2) Sekolah Tinggi Ekonomi Islam TAZKIA

Abstract

The purpose of this study is to examine the effect of transparency of reserve account disclosure on accrual earning management, and also to examine the role of audit quality as a moderator for the effect of transparency of reserve account disclosure on accrual earning management. The population in the study are companies listed on the Indonesia Stock Exchange with a sample period of 2012-2015. The sample selection technique used purposive sampling. The samples were obtained 350 observations of manufacturing companies listed in Indonesia Stock Exchange period 2012 to 2015. This study uses panel regression statistical method with unbalance panel data. The measurements used for Transparency of reserve account disclosure are word count, sentence count, and disclosure index. The results support the hypothesis which show that transparency of reserve account disclosure have negative significant effect on the accrual earning management, audit quality have negative significant effect on accrual earning management, and audit quality has a role as moderator (strengthen) the Negative effect between transparency of reserve account disclosure to accrual earning management.Nevertheless, the result is inconsistent in each model. This study concludes that accrual earning management can be minimized by selecting competent auditors and increasing transparency of accounts receivable accounts.

Keywords

allowance and reserve account disclosure; audit quality; accrual earning management

Full Text:

PDF

References

Al-Thuneibat, A. A., Issa, R. T. I. Al, & Baker, R. A. A. (2011). Do Audit Tenure And Firm Size Contribute To Audit Quality?: Empirical Evidence From Jordan. Managerial Auditing Journal, 26(4), 317–334.

Alzoubi, E. S. S. (2016). Audit Quality and Earnings Management: Evidence From Jordan. Journal of Applied Accounting Research, 17(2), 170–189.

Ball, R., & Shivakumar, L. (2006). The Role Of Accruals In Asymmetrically Timely Gain And Loss Recognition. Journal of Accounting Research, 44(2), 207–242.

Baxter, P., & Cotter, J. (2009). Audit Committees and Earnings Quality. Accounting & Finance, 49(2), 267–290.

Cassell, C. A., Myers, L. A., & Seidel, T. A. (2015). Disclosure Transparency About Activity In Valuation Allowance And Reserve Accounts and Accruals-Based Earnings Management. Accounting, Organizations and Society, 46, 23–38.

Chen, H., Chen, J. Z., Lobo, G. J., & Wang, Y. (2011). Effects Of Audit Quality On Earnings Management And Cost Of Equity Capital: Evidence From China. Contemporary Accounting Research, 28(3), 892–925.

Christiani, I., & Nugrahanti, Y. W. (2014). Pengaruh Kualitas Audit Terhadap Manajemen Laba. Jurnal Akuntansi Dan Keuangan, 16(1), 52–62.

Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting Earnings Management. Accounting Review, 193–225.

Dita, M. R. (2016). Pengaruh Kualitas Audit Terhadap Hubungan Pengungkapan Other Comprehensive Income dengan Manajemen Laba Pada Perusahaan yang Terdaftar di Bursa Efek Indonesia. Universitas Andalas.

Febrininta, C. N., & Siregar, S. V. (2014). Manajemen Laba Akrual, Manajemen Laba Riil, dan Biaya Modal. Jurnal Akuntansi Multiparadigma, 5(1), 365–379.

Frank, M. M., & Rego, S. O. (2006). Do Managers Use The Valuation Allowance Account To Manage Earnings Around Certain Earnings Targets? Journal of the American Taxation Association, 28(1), 43–65.

Gerayli, M. S., Yanesari, A. M., & Ma’atoofi, A. R. (2011). Impact Of Audit Quality On Earnings Management: Evidence From Iran. International Research Journal of Finance and Economics, 66(1), 77–84.

Griffith, E. E., Hammersley, J. S., & Kadous, K. (2015). Auditing Complex Estimates: Understanding The Process Used And Problems Encountered. Contemporary Accounting Research, 32(3), 833–863.

Gul, F. A., Fung, S. Y. K., & Jaggi, B. (2009). Earnings Quality: Some Evidence On The Role Of Auditor Tenure And Auditors’ Industry Expertise. Journal of Accounting and Economics, 47(3), 265–287.

Healy, P. M. (1985). The Effect Of Bonus Schemes On Accounting Decisions. Journal of Accounting and Economics, 7(1–3), 85–107.

Houqe, N., Ahmed, K., & van Zijl, T. (2017). Effects of Audit Quality on Earnings Management and Cost of Equity Capital: Evidence from India. International Journal of Auditing. https://doi.org/10.1111/ijau.12087

Januarsi, Y. (2009). Peran Auditor Spesialis Dalam Mengurangi Manajemen Laba Akrual Dan Manajemen Laba Real Pada Periode Sebelum dan Sesudah Keputusan Menteri Keuangan No. 423/KMK. 06/2002. Simposium Nasional Akuntansi, 12.

Johnson, V. E., Khurana, I. K., & Reynolds, J. K. (2002). Auditâ€Firm Tenure and The Quality Of Financial Reports. Contemporary Accounting Research, 19(4), 637–660.

Jordan, C. E., Clark, S. J., & Hames, C. C. (2010). The Impact Of Audit Quality On Earnings Management To Achieve User Reference Points In EPS. Journal of Applied Business Research, 26(1), 19.

Kima, R. (2007). SEC Schedule II–Visibility into the integrity of reported results. AICPA CPA Insider Newsletter. Retrieved from https://www.aicpastore.com/Content/media/PRODUCER_CONTENT/Newsletters/Articles_2007/CPA/Oct/SEC_Schedule.jsp

Kirana, R., & Hasan, A. (2016). Pengaruh Tingkat Pengungkapan Laporan Keuangan, Kecakapan Manajerial Dan Risiko Litigasi Terhadap Manajemen Laba Dengan Kualitas Audit Sebagai Variabel Pemoderasi (Studi Empiris Perusahaan Manufaktur Di Bei. Jurnal Akuntansi (Media Riset Akuntansi & Keuangan), 4(2), 189–205.

Liang, Y., Marinovic, I., & Varas, F. (2017). The Credibility of Financial Reporting: A Reputation-Based Approach. The Accounting Review, 93(1), 317–333.

Lobo, G. J., & Zhou, J. (2001). Disclosure Quality and Earnings Management. Asia-Pacific Journal of Accounting & Economics, 8(1), 1–20.

Luhgiatno, L. (2010). Analisis Pengaruh Kualitas Audit Terhadap Menejemen Laba Studi Pada Perusahaan Yang Melakukan Ipo Di Indonesia. Fokus Ekonomi, 5(2), 135–146.

Maaloul, A., & Zéghal, D. (2015). Financial statement informativeness and intellectual capital disclosure: An empirical analysis. Journal of Financial Reporting and Accounting, 13(1), 66–90.

Marinovic, I., Liang, Y., & Varas, F. (2016). The Credibility of Financial Reporting: A Reputation-Based Approach (Rock Center for Corporate Governance at Stanford University No. 224).

Meini, Z., & Siregar, S. V. (2014). The Effect of Accrual Earnings Management and Real Earnings Management on Earnings Persistence and Cost of Equity. Journal of Economics, Business & Accountancy Ventura, 17(2), 269–280.

Meutia, I. (2004). Pengaruh Independensi Auditor Terhadap Manajemen Laba Untuk KAP Big 5 Dan Non Big 5. The Indonesian Journal of Accounting Research, 7(3), 324–336.

Miko, N. U., & Kamardin, H. (2015). Impact Of Audit Committee And Audit Quality On Preventing Earnings Management In The Pre-And Post-Nigerian Corporate Governance Code 2011. Procedia-Social and Behavioral Sciences, 172, 651–657.

Naftalia, V. C., & Marsono, M. (2013). Pengaruh Leverage Terhadap Manajemen Laba Dengan Corporate Governance Sebagai Variabel Pemoderasi. Fakultas Ekonomika dan Bisnis, Diponegoro University.

Natalia, M., Gunawan, Y., & Carolina, V. (2017). Pengaruh Pengungkapan Tanggung Jawab Sosial Perusahaan terhadap Kinerja Pasar dengan Moderasi Efektifitas Dewan Komisaris dan Independensi Dewan Komisaris. Jurnal Akuntansi, 8(1), 45–64.

Rahman, R. (2016). Pengaruh Kualitas Audit, Tenure Audit Dan Ukuran Perusahaan Terhadap Asimetri Informasi Dengan Komite Audit Sebagai Variabel Pemoderasi (Studi Empiris Pada Perusahaan Manufaktur Periode 2013-2015). FAKULTAS EKONOMI UMY.

Ratmono, D. (2010). Manajemen Laba Riil dan Berbasis Akrual: Dapatkah Auditor yang Berkualitas Mendeteksinya. In Proceeding Simposium Nasional Akuntansi XIII. Purwokerto.

Reichelt, K. J., & Wang, D. (2010). National And Officeâ€Specific Measures Of Auditor Industry Expertise And Effects On Audit Quality. Journal of Accounting Research, 48(3), 647–686.

Rusmin, R. (2010). Auditor Quality And Earnings Management: Singaporean Evidence. Managerial Auditing Journal, 25(7), 618–638.

Scott, W. R. (2015). Financial Accounting Theory (4th ed.). Canada: Pearson Canada Inc.

Subroto, B. (2014). Faktor-Faktor Yang Mempengaruhi Kepatuhan Kepada Ketentuan Pengungkapan Wajib Oleh Perusahaan-Perusahaan Publik Dan Implikasinya Terhadap Kepercayaan Investor Di Pasar Modal. [Yogyakarta]: Universitas Gadjah Mada.

Suranggane, Z. (2007). Analisis Aktiva Pajak Tangguhan dan Akrual sebagai Prediktor Manajemen Laba: Kajian Empiris pada Perusahaan Manufaktur yang Terdaftar di BEJ. Jurnal Akuntansi Dan Keuangan Indonesia, 4(1), 77–94.

Suttipun, M., & Stanton, P. (2012). A Study Of Environmental Disclosures By Thai Listed Companies On Websites. Procedia Economics and Finance, 2, 9–15.

Tuanakotta, T. M. (2014). Mendeteksi Manipulasi Laporan Keuangan. Jakarta: Salemba Empat.

Tucker, J. W. (2015). The Relation Between Disclosure Quality And Reporting Quality: A Discussion of Cassell, Myers, and Seidel (2015). Accounting, Organizations and Society, 46, 39–43.

Refbacks

  • There are currently no refbacks.


Bookmark and Share


Creative Commons License
Jurnal Dinamika Akuntansi is licensed under a Creative Commons Attribution 4.0 International License