The Indonesian Journal of Accounting Research
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Timeliness of Financial Reporting: An Empirical Study in Indonesia Stock Exchange
No full textThis study empirically analyzed timeliness of financial reporting in Indonesia. Timelines of financial reporting are measured by audit lag and reporting lag. This study utilized an unbalanced panel of 700 firm-years of companieslisted on the Indonesia Stock Exchange during the period 2007-2009. The mean of audit lag is 74 days and the mean of reporting lag is 94 days. It is found that corporate governance and audit opinion negatively affect both audit lag and reporting lag, whereas firm size positively affectsaudit lag and reporting lag. Debt ratio only negatively affects reporting lag. Auditor’s firm, profitability, price earnings ratio and dividend payout ratio do not significantly affect either audit lag or reporting lag. Inter-industry analysis of audit lag and reporting lag reported that the financial industry has the shortest audit lag and reporting lag. The trade, service and investment industries have the longest audit lag whereas the property, real estate and building construction industries have the longest reporting lag
The Comparison of EPS Standards and Analysis of the Usefulness of Basic and Diluted EPS
No full textThis paper examines whether both basic earnings per share (BEPS) and diluted earnings per share (DEPS) have the potential to provide financial statement users with information that is useful for improving their decision making. It also explores the potential for BEPS and DEPS to function as useful input information in predictive decision models or in ranking‑decision models. This research is based on a study undertaken by DeBerg and Murdoch (1994) that examines the usefulness of EPS disclosure. The methodology of this research is modeled out based on theirs to test the same objects in an Australian setting. In addition, this study examines the effects of disclosure of both variations of EPS have on the market capitalization of firms. This study utilises the disclosures of listed firms in ASX over a four-year period. The results indicate that BEPS and DEPS contain essentially the same information and that disclosing both is superfluous. Since BEPS and DEPS, as well as price‑earnings (P/E) ratios computed using BEPS and DEPS are very highly correlated, it is quite improbable these data could be utilized as separate independent variables in a predictive decision model. Furthermore, ranking firms by price per basic earnings ratio (P/BE) and price per diluted earnings ratio (P/DE) results only in insignificant reordering
Comparing The Earnings Response Coefficients of U.S. Multinational and Domestics Firms: The Use of Geographic Segment Reporting Information
No full textCheng, et al. (1994) compare earnings response coefficients of U.S. multinational and U.S. domestic firms and conclude that U.S. multinational firms show a weaker relationship between earnings and returns than U.S. domestic firms. Further Cheng, et al. argue that the weaker relationship of multinational firms is caused by information complexity experienced by multinational firms.This study uses geographic segment reporting information for providing empirical proxies for information complexity. The purpose is to test whether information complexity is a major factor in explaining the difference in the relationship between earnings and returns using linear and portfolio rank models.The empirical results support the hypotheses that proxies for information complexity are negative and statistically significant. Including the proxies for information complexity moderately increases the earnings response coefficients of the multinational firms.This study has several limitations, such as using pooling and cross-sectional regressions, ignoring firm-specific regressions [Teets and Wasley (1996)]. In addition, the study ignores country-specific factors in deriving proxies for information complexity. Future research should address these issues
Pengaruh Kepemilikan Manajerial dan Kepemilikan Institusional pada Kebijakan Hutang Perusahaan : Sebuah Perspektif Theory Agency
No full textThe purpose of this research is to test the effect of managerial ownership and institutional ownership to corporate policy in the perspective of agency theory. This research is based on the previous research by Moh’d, et al. (1998), which found that ownershipstructure influenced the debt ratio in order to minimize the agency conflict. The research is focused on manufacturing companies listed in Bursa Effek Jakarta for period 1995-1996. The method of data collection is done by using pooling method and give 61 firm year observation. The Statistical method used in this researchis multiple regression. The result of this research shows that managerial and institutional ownership have the negative and significant effect to the debt ratio. The result reflect that managerial and institutional ownership may replace in order to minimize the agency conflict
The Impact of The Implementation of Goal Setting Theory and Agency Theory on Performance: Evidence from Indonesian Public Sector Organizations
No full textThe aim of this study is to give empirical evidence about theimpact of the implementation of goal setting theory andagency theoryon the performance of local governmental units in the Special Regionof Yogyakarta Province. The samples were the SKPD’s chairmen or chairwomenwho lead the governmental services atthe province level (D IYogyakarta) and the regency level (Kota Yogyakarta, KabupatenSleman,Kabupaten Gunung Kidul, Kabupaten Bantul, and KabupatenKulon Progo), and they must be in their term of office for at least oneyear. This study analyzed their perceptions about the statements in thequestionaire. The data were analized by partial least square (PLS) withSmart PLS Version 2.0. The findings showed empirical evidence of theimpact of clear and measurable goals on qualitative and quantitativeperformance, and the impact of performance measurement indicatorson quantitative and qualitative performance are consistent withgoalsetting theory, but the impact of decentralization on the quantitativeand qualitative performance is inconsistent with goal setting theory.The results show that the impact of incentives on the quantitative andqualitative performance isinconsistent with agency theory
Pengaruh Variabel Akuntansi dan Data Pasar terhadap Resiko Persepsian (Perceived Risk) Saham pada Perusahaan Publik yang Terdaftar di BEJ
No full textThis study intends to identify the effects of dividend pay out ratio, current ratio, asset size, asset growth, leverage, earnings variability, earnings covariability, and market’s beta on the perceived risk of the stocks. Data is selected using stratified random sampling. The analysis units for the eight independent variables are 72 companies registered on the Jakarta Stock Exchange from 1993-1996, and the analysis unit of the dependent variable is broker who analyzed the perceived risk. The data collection for the perceived risk (DV) is conducted by using mail survey while for the dividend pay out ratio, current ratio, asset size, asset growth, leverage, earnings variability, earnings covariability, and market’s beta (IV) are from archival. The statistic method used to test the hypotheses is MDA (Multiple Discriminant Analysis).The study results are as follows: first, perceived risk is valid as the substitute for market’s beta; second, there are no differences across industries (i.e., service, manufacturing, and trading industries); third, four of the eight independent variables, i.e. dividend pay out ratio, asset growth, leverage, and earnings covariability do not support hypotheses. Therefore it can be concluded that there is no effect of dividend pay out ratio, asset growth, leverage, and earnings covariability on the perceived risk, whereas the hypotheses supporting the theory are current ratio, asset size, earnings variability, market’s beta, and hypotheses two
Grey Areas of Ethics: The Significance of Levinas’ Perspective on Accounting Students’ Deliberative Moral Reasoning
No full textThis study aims to analyze the significance of Levinas’ perspective on the deliberative moral reasoning of accounting students when facing a grey area of ethics in a corporate accounting context. In a between-subjects experimental design, 36 undergraduate accounting students at the Faculty of Economics and Business, Universitas Gadjah Mada, were randomly assigned into two groups, which are a treatment group and a control group. The first group received a treatment of Levinas’ perspective, while the second received no treatment at all. However, both responded to the same four ethical dilemmas faced by corporate accountants designed to measure their deliberative moral reasoning. As expected, students in the treatment group exhibited significantly higher deliberative moral reasoning than those in the control group. This result thus suggests that Levinas’ perspective has significance in accounting students’ deliberative moral reasoning when facing a grey area of ethics in a corporate accounting scheme
An Empirical Assessment of Factors Affecting Professional Commitment Among Auditors and Managers in Indonesia
No full textThe financial scandals that happened in the last fifteen years reflected the tendency of executives to promote their self-interest at the expense of shareholders’ interest, or more generally public’s interests. Scholars argue that this self-serving and unethical behavior indicate the domination of commercial greed over objectively professional judgment among executives and professionals; commercial greed has, slowly but surely, replaced professional judgment.This paper is designed to test empirically the impact of work setting (i.e., managers and auditors), questioning mind, suspension of judgment, age, and work experience on professional commitment among accountants and managers in Indonesia. It is hypothesized that professional commitment is affected by work setting, suspension of judgment, questioning mind, age, and tenure. Questionaires, accompanied with cover letter, are distributed to 137 repondents (61 auditors and 76 managers). Nine questionnaires are not included in the analysis because they are not completed properly by repondents (some of the questions are not answered). The final sample comprises of 128 respondents (55 auditors and 73 managers). The findings confirm the predictions that professional commitment is affected by suspension of judgement, questioning mind, and age. Empirical evidence about the impact of these four independent variables on professional commitment is important given the public concerns about the deterioriating professionalism among public accountants and executives, as a result of the mega financial scandals that had happened around the globe in the last fifteen years
The Effect of Tax Rate Reduction in the Income Tax Act 2008 on Policy for Preparation of Financial Statements ( A Study on the Future of Public Manufacturing Companies in the Era of Tax Reform)
No full textAs corporate income tax is considered an important tax for developing countries, the governments in these countries has continuously tried to modify corporate income tax structure in order to optimize their tax revenues. This study aims to examine the responsiveness of corporate taxable income to tax structure changes in Indonesia by analyzing Indonesian the corporate tax rate reduction in 2008. This study investigates how corporate taxpayers respond to the tax rate changes, whether and to what extent corporate taxpayers alter their behavior in ways that affect their taxable income. Using a current accrual model as used by Guenther (1994), this study shows that future reduction in tax rate has negative effect on current earnings, which means firms tried to shift their income from the current period to future periods to obtain tax benefits. Further, this research also finds that foreign ownership and existing loss compensation affect the probabilities of companies conducting earnings management. Based on these results, policy makers in Indonesia should take into consideration the behavioral effect of changes in income tax legislation and integrate this effect into their future policy development
Perilaku Reaksi Harga Dan Volume Perdagangan Saham terhadap Pengumuman Dividen
No full textMany of researches on price and volume reaction associated with the earnings announcement have been conducted. Bamber and Cheon (1995) acknowledge that there is a positive relation between the average of magnitudes of price and of volume reaction. Nearly a quarter of the quarterly earning announcements generate price and volume reaction of different relative magnitudes. Surprisingly, there is little empirical evidence of such reaction regarding the dividend announcements. This research investigates the volume and price reactions associated with the dividend announcements.The result of this study shows a dependence between price and volume reaction. Additionally, price and trading volume is positively related.Although there is a relation between price and volume reaction around dividend announcements, the reactions are very relatively different in magnitudes. The relative magnitudes of price and volume reactions are extremely different for 32,88 percent of these sample dividend announcements, relatively similar reactions for 30,87 percent, and the remaining 36,24 percent shows relatively indeterminate reactions