The Indonesian Journal of Accounting Research
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Accounting Practices and the Use of Money in the Reign of King Udayana in Bali: An Ethnoarcheological Approach
No full textThe study takes an ethnoarcheological approach to exploring the existence of accounting practices and the use of money in the reign of King Udayana (during the period 989-1011 Masehi).The period was considered important since it was the golden age of the Singhamandawa Kingdom in Bali where King Udayana successfully integrated Bali and Nusa Tenggara, and its influence reached East Java. King Udayana had a prominent role in the development of the economic, social, political and religious values of the people of Bali. It is concluded that using the ethnoarcheological approach, In the era of King Udayana, some clear pictures of the existence of accounting practices could be drawn. Accounting was understood in the era in various forms, including economic transactions in the traditional markets, the use of currency on many social occasions, and simple models of record keeping. It is also believed that King Udayana used religious values as the basis of people’s social and economic transactions. It is also found that in the reign of King Udayana, money in the form of coins was used intensively. Coins were minted using gold and silver plates as the local currency used strongly reflected the spiritual contexts which were highly respected by local community. The symbols on the coins had two similar patterns which were the same on both the left and right sides; on the gold coins they depicted life which has a balance between outward and inward or material and spiritual concepts. Similarly, the pattern featuring four sandalwood flower petals that was printed on silver currency as a sacred tree. Belief in this spiritual foundation was a very important concept to put into practice in order to obtain a balance between material and spiritual life. It is also believed that the accounting practices performed during the era of King Udayana also used the practice of balance. Transactions related to the use of currency trading were carried out between the kingdom and the villagers, as expressed in the inscription, showed how the empire really understood the meaning of well-being and balanced life
Determinant Factors of Audit Quality
No full textThis study is aimed at examining the determinant factors of audit quality. Different from the previous studies, we use earnings surprise benchmark developed from Carey and Simnet (2006) as the proxy for audit quality. Based on the previous literature, we expect that audit tenure, size of audit firm, and audit regulation have a positive impact on audit quality. Using logistic model,we find that size of audit firm and audit regulation are the two determinant factors that consistently provide positive effect on audit quality. This result suggests that the probability for delivering high audit quality increases as the audit firm size is getting bigger. In addition, the probability of high audit quality is higher under audit regulation regime compared to that of non-regulated
The Effectiveness of Monitoring Controls and Individual Moral Reasoning in the De-escalation of Commitments
No full textThe study examines the impact of two adverse selection elements (private information and incentives to shirk) on managers' escalation of commitment and the effectiveness of monitoring controls and manager's moral reasoning in de-escalating managers' commitment. This study contributes to the accounting literature by comprehensively evaluating the escalation commitment phenomena from its determinants, the strategy to reduce it, and the impact of moral reasoning level on managers' escalation commitment behavior. This research employed laboratory experiment method with 95 participants of undergraduate and graduate students. Consistent with Harrell and Harrison (1994), the findings of this study indicate that managers who experience adverse selection problems showed greater tendency to continue unprofitable project than managers who do not have such problems. However, this study fails to provide empirical evidence that monitoring control and individual moral reasoning level affect the tendency of managers to escalate their commitment
The Convex Relation between Equity Value and Earnings
No full textThis paper applies the Burgstahler and Dichev (1997) equity valuation model on stocks listed in the Jakarta Stock Exchange for the period 1993-1996. The prediction of the model is that the value of equity is a convex function of both expected earnings and book value. The piece-wise regression and the quadratic regression are employed to test the prediction. The empirical evidence strongly supports the prediction of convexity: as the ratio of earnings to book value increases, the relation between equity value and earnings becomes stronger while the relation between equity value and book value becomes weaker. In the pooled regression, the quadratic regression provides better explanation on the variation of equity value than the piece-wise regression. Finally, the results are robust with respect to alternative variable/model specifications. The results support Burgstahler and Dichev’s findings in the United States and imply that equity value is a function of both expected earnings and book value
Apakah Teori Prospek tepat untuk Kasus Indonesia? Sebuah Replekasi Penelitian Tversky dan Kahneman
No full textRasio Keuangan sebagai Prediktor Bank Bermasalah di Indonesia
No full textThis research is aimed to examine the possible association between bank financial ratios derived from CAMEL concept and the failures of a number of banks in Indonesia during the monetary crisis period. Seven independent variables were used in the analysis, i.e. capital adequacy ratio (CAR), return on risked assets (RORA), net profit margin (NPM), return on assets (ROA), operating cost to operating revenue, net call-money liabilities to current assets, and loan to deposit ratio (LDR). Tests were undertaken using the univariate model approach and the multivariate discriminant analysis.The result shows five significant financial ratios to affect the probability of a bank to go for bankrupt in a five year horizon. The ratio are CAR, RORA, ROA, net call-money liabilities to current assets, and LDR. However, when testing the association one year prior to bank failure, this study reveals RORA, ROA, LDR, operating cost to operating revenue, and call-money liabilities to currents assets to be significant for bankruptcy prediction in banking industry in Indonesia.Meanwhile, the discriminant analysis includes only two bank financial ratios – RORA and LDR – in the model for predicting bank failures. The classification results based on these cut-off Z-score values were able to predict bank failures in Indonesia at the accuracy rates of 82 %, 69.1 %, 65.3% within 1, 2, and 3 year horizons respectively, a far better result compared to the naïve prediction
Social Construct of Business Entity's Performance Measurer: A Case Study of SME in Kudus
No full textThis research aims to study the performance measurement systems (PMS) practices in small and medium enterprises (SMEs). This qualitative research employs a case study methodology which investigates how the social construction on performance measurement system in Mubarokfood, an SME using society cultural sphere in Kudus. This study argues that ontologically PMS practice is a socially constructed reality. PMS, in the sense of such a reality, is seen as a collaborative process involving local culture, society and powerful actors. By using Mubarokfood as a research setting, it can be concludedthat the SME is committed to PMS because such practice is important for the company to gain legitimacy and maintain social harmony. Weber's concept on disenchantment of the world was irrelevant in the case of Mubarokfood. Mubarokfood is running on rationalization which develops new pattern in its spiritual aura, i.e., doing spiritual rationalization. Consequently there is no disconnection between spiritual and rational worl
Pengaruh Rasio Camel terhadap Praktik Manajemen laba di Bank Syariah
No full textThe purpose of this study is to investigate earnings management in shariah banks and the effect of CAMEL ratios on earnings management. Our samples consist of 21 shariah banks, consist of Shariah Bank (Bank Umum Syariah/BUS) dan 18 Shariah Business Unit (Unit Usaha Syariah/UUS) at years 2004-2006.Our results show that on average, there is no significant earnings management practice (measured using discretionary accruals) in shariah banks, and CAMEL ratios do not have significant effect on earnings management, except NPM which has positive and significant effect. This indicates that although in average there is no earnings management in shariah banks, bank’s profitability encourage management to involve in earnings management activity. This study finds evidence that earnings management in BUS is significantly higher than that UUS
The Influence of Awarenes of the Information on Tax Evasion and Moral Principle towards the Propensity of Tax Evation: an Experimental Study
No full textAsymmetric Price Reaction: Evidence from Emerging Capital Markets
No full textThis study investigates if emerging capital markets react asymmetrically to earnings shocks and if either firm-specific or market-wide approach explains the asymmetric reaction. This study is important because stock prices in emerging capital markets might not reflect firms’ fundamental values. Using data from Indonesia, Malaysia, and Philippines stock exchanges for the period of 2002-2007, this study finds that (i) the negative earnings shocks result in a greater price reaction than do positive ones, (ii) the firm-specific approach explains the asymmetric price reaction, and (iii) the market-wide approach does not consistently explain the asymmetric price reaction. These findings indicate that investors are overly optimistic and that stock prices do not reflect firms’ intrinsic values