Accounting Analysis Journal

The Role of The Company Life Cycle on Chief Executive Officer Power and Earnings Management

2023-06-12T11:08:22+07:00

Purpose : This study aims to re-examine whether chief executive officer (CEO) power affects earnings management and whether company life cycles can moderate the effect of CEO power on earnings management.

Method : This study used publicly listed companies in the Indonesia Stock Exchange period 2017-2021, are 74 companies, or 370 data, were picked using a purposive sampling method that eliminates companies with outliers. This research uses panel data regression with a random effect model to examine CEO power on earnings management with the company’s life cycle as moderating variables.

Findings : This study finds that CEO power does not affect earnings management, and the decline stage can moderate the effect of CEO power on earnings management. However, the introduction, growth, and mature stage cannot moderate the effect of CEO power on earnings management.

Novelty : This study contributes to the literature on earnings management by highlighting CEO power in Indonesian companies with different life cycles. This study provides a unique perspective on earnings management, especially in emerging markets like Indonesia.

Keywords : CEO’s Power, Earnings Management, Company Life Cycle

Awareness of Economic, Environmental, and Social Issues and Financial Soundness–Does The Covid-19 Pandemic Matter?

2023-06-22T20:04:58+07:00

Purpose : Regulators, the public and researchers emphasize the business world to increase awareness of economic, environmental, and social issues as corporate social responsibility (CSR). However, the economic consequences of CSR are still being debated. This study proves the role of CSR disclosure on financial soundness and the role of the coronavirus disease (covid-19 pandemic) in the relationship between the two.

Method : The research sample is a manufacturing company listed on the Indonesia Stock Exchange, with observations from 2015 to 2021. Data analysis uses panel data regression.

Findings : The results showed that CSR disclosure does not affect financial soundness, but the interaction between CSR and covid-19 pandemic negatively affects financial soundness. Therefore, covid-19 pandemic plays a major role in the extent to which CSR affects financial soundness. We will conduct regression analysis with other indicators of financial soundness to assess the robustness of our findings.

Novelty : The study contributes to the expansion of the prior literature in two important ways. First, we use the financial soundness consequences of CSR disclosures. This study provided evidence of covid-19’s effect on CSR disclosures.

Keywords : Customer Loyalty; Environmental Concern; Risk, Covid-19 Pandemic

The Moderating Effect of Abusive Supervision on Religiosity and Whistleblowing Relationship: An Experimental Investigation

2023-06-27T15:08:57+07:00

Purpose: This study examines the causal relationship between religiosity on whistleblowing. Besides, this study also identifies the moderating role of abusive supervision on the relationship between those two variables.

Method: This study used a 2 × 2 between-subjects laboratory experiment with accounting undergraduate students as the subjects. The religiosity is categorized into two levels (high and low). The variable of abusive supervision is manipulated into two levels (high and low).

Findings: High religiosity increase whistleblowing. Also, abusive supervision negatively influences whistleblowing. However, abusive supervision moderates the causal relationship between religiosity and whistleblowing. The study demonstrates the significant impact of abusive supervision on an unwillingness to blow the whistle, although the individual is embedded in religious values.

Novelty: This study fills a gap in the literature by showing that the tune of the top with a higher hierarchical structure can make an individual's values mingle with the organizational environment and impact his decision to blow the whistle. Furthermore, this research contributes to the conservation of resource theory by providing evidence that superiors have an essential role in molding the behavior of human resources in organizations.

Keywords: Abusive Supervision, Decision-Making, Religiosity, Whistleblowing

The Management Accounting Usage in Automotive Servitized Companies: An Initial Attempt

2023-09-25T18:47:51+07:00

Purpose : Prior literature suggests a further exploration on the usage of management accounting (MA) techniques in the servitization context. Servitization is a movement in which companies consciously develop service offerings, which support their products to gain competitive advantage. There are still limited studies of this topic in the context of Indonesian manufacturing companies, thus this paper aims to provide evidence on the usage of MA in servitized manufacturing companies in Indonesia.

Method : We employed a qualitative approach as well as a preliminary survey to a number of selected managers and accountants from four different automotive companies.

Findings : The result shows that target costing is very crucial to the automotive manufacturing companies nowadays. We discover that competitive position monitoring, quality costing, integrated performance measurement, and brand management accounting are relevant to company’s strategic position. Therefore, we find the connection between the usage of MA and company’s strategic planning.

Novelty : From practical point-of-view, our study provides the evidence on the usage of MA in Indonesian servitized-manufacturing business. Also, we build a framework, which represents the relationship between the MA techniques and servitization, that could benefit business through a better understanding about the interconnections between MA usage and servitization level.

Keywords : Management Accounting; Servitization; Automotive Companies; Indonesia

Do Chief Audit Executives Able to Influence Real Earnings Management Practices? Evidence from Indonesia

2023-09-30T08:49:20+07:00

Purpose : This study aims to investigate the relationship between financial expertise and tenure of the Chief Audit Executive [CAE] on real earnings management [REM] practices

Method : This study uses a sample of 797 observations from companies in the manufacturing sector in Indonesia during the period 2012 – 2019. For data analysis, regression of feasible generalized least squares was used. Data related to financial expertise and tenure of CAE were manually collected from the annual report and financial data was obtained from Thomson-Reuters Database.

Findings : The results of this study indicate that CAE with better financial expertise is associated with lower REM. Conversely, this study also indicates that CAE tenure has an association with higher REM. This result is robust by using an alternative REM measurement. By breaking down the indicators of CAE’s financial expertise, namely CAE’s certification, experience in financial positions within/inside the company or outside the company, the results show that CAE certification has the largest effect on REM.

Novelty : This study contributes to the real earnings management and internal audit literature by demonstrating the importance of attributes possessed by CAEs as leaders of the internal audit function in mitigating REM practices.

Keywords : Chief Audit Executive, Financial Expertise, Tenure, Real Earnings Management

Corporate Social Responsibility Disclosure, Intellectual Capital Disclosure, Risk Disclosure, Cost of Capital: Moderating Role of Earnings Management

2023-09-30T08:57:26+07:00

Purpose : This study investigates the effect of corporate social responsibility, intellectual capital disclosure, and risk disclosure on the cost of capital and the roles of earnings management in moderating these effects.

Method : This study employs secondary data from annual reports and financial statements of 79 manufacturing companies listed on Indonesia Stock Exchange from 2016 to 2020. Using purposive sampling, the sample obtained in this study is 395 observations. The data were analyzed using multiple linear regression for panel data.

Findings : This study finds that corporate social responsibility is negatively associated with cost of capital. Other than that, intellectual capital disclosure and risk disclosure are not associated with cost of capital. Moreover, earnings management failed to moderate the association between corporate social responsibility and the cost of capital. This study also found that earnings management strengthens the negative impact of intellectual capital disclosure on the cost of capital. In contrast, earnings management weakens the negative effect of risk disclosure on the cost of capital

Novelty : This study places the moderating role of earnings management on testing the three non-financial disclosures on the cost of capital so that this study can complement the development of financial accounting research related to non-financial information.

Keywords : Sustainability Disclosure; Intellectual Capital Disclosure; Risk Disclosure; Earnings Quality; Cost of Capital

The Link Between Authentic Leadership, Work Meaningfulness, and Work Engagement in Auditors

2023-09-30T09:07:23+07:00

Purpose : This study examines whether authentic leadership of external auditors’ leader affect work engagement and if so, whether the effect is mediated by work meaningfulness.

Method : Data were collected using a web-based questionnaire from 159 external auditors in Jakarta, Indonesia and used SEM-PLS approach to test the hypotheses.

Findings : The findings indicated that authentic leadership had significant effect on work meaningfulness and work engagement, and all dimensions of authentic leadership and work engagement had significant correlation. Moreover, work meaningfulness was found to be partially mediate the relationship between authentic leadership of external auditors’ leader and work engagement among external auditors and their leader

Novelty : This is one of the first studies to look at the conduct of auditors from the Big Four and non-Big Four firms in a public accounting firm across all dimensions of authentic leadership, work meaningfulness, and work engagement.

Keywords : Authentic Leadership; Work Meaningfulness; Work Engagement