93 research outputs found
Evaluation of potential financial risks of bank through financial due diligence and preparation of financial due diligence guidelines / Wulan Ningrum Kusuma and Sylvia Veronica Siregar
Get PDFFinancial due diligence (FDD) is critical to a successful mergers and acquisitions (M&A). FDD assists investor in evaluating Target Company's risks. Banks in Indonesia is a sector that investors are interested in as M&A target, notably with the support of the Regulatory Body for Bank consolidation. As the ramp-up of Bank M&A, the need to perform FDD becomes significant. However, the absence of standard in performing FDD for banking can hamper the FDD process, especially for the FDD team that has no experience in banking. This thesis provides study concerning ways in identifying, analyzing and evaluating the Bank's main risks through FDD as well as the preparation of FDD guidelines. The study was conducted qualitatively using case study at Bank XYZ. The study involved interviews and observation on parties engaged in the FDD on Bank including documentation study. The study result is based on FDD guidelines focusing on Bank's main financial risks such as loans, foreclosed assets, deposits and employees. Loans and deposits are the Bank’s main business and have the largest portion of Bank’s assets and liabilities. Loans ’ main risk was evaluated by assessing the loan quality using three pillars analysis (business prospects, performance, and ability to pay) that has impact on the allowance for impairment losses. Foreclosed assets are part of the loans. Foreclosed assets ’ main risk was evaluated by assessing its quality and value that has impact on the impairment. Deposits’ main risk was evaluated using maturity mismatch between loans and deposits including loan to deposit ratio. Employees are another issue often discussed in M&A, especially the severance pay. The risk is whether the severance pay provision is sufficient. The provision is evaluated with reference to the Manpower Act. This guidelines assists the implementers of FDD in performing FDD properly by focusing on the Bank’s main financial risks
Audit tenure, auditor rotation, and audit quality: the case of Indonesia
No full textThe Indonesian regulators have made it compulsory to rotate the appointments of public accountants every 3 years and the appointment of public accounting firms every 5 years, since the end of 2002. The purpose of this study is to investigate the effects of auditor rotation and audit tenure of the public accountant and the public accounting firm, on audit quality (before and after the implementation of the mandatory auditor regulation). The results do not support that mandatory auditor rotation increases audit quality or that a shorter audit tenure (both partner and firm level) increases audit quality. Regulators may need to consider revising the regulation (i.e. related to maximum years allowed for auditor to audit their client) and/or introduce other regulations to increase audit quality
KUALITAS LAPORAN KEUANGAN UMKM SERTA PROSPEK IMPLEMENTASI SAK ETAP
Get PDFThis study examines the effect of quality of the SMEs’ financial statements on level of credit received by SMEs, as well as prospect of financial accounting standard for entity without public accountability (FAS EWPA) implementation in 2011 to improve the quality of the financial statements of SMEs. The data of this study is obtained from the questionnaires returned by 50 SME entrepreneurs in the area of Jakarta, Bogor, Depok, and other parts of Java. The results of this study show that the quality of SME financial statements do not affect the amount of credit received by SMEs. This may be due to the low quality of financial statements of SMEs so that banks are still in doubt with the relevancy and reliability of financial reporting. Prospect of FAS EWPA implementation to improve the quality of financial report may have been constrained due to the low understanding of the SME entrepreneurs over the FAS EWPA
Contemporary Issues in Financial Economics
No full textChapter 1. Corporate Board Gender Diversity and Dividend Decisions: Evidence from India; Rama Sastry Vinjamury
Chapter 2. Do Country Level and Firm Level Governance Quality Influence; Bank Sustainability Performance? Refin Dimas Pratama and Ancella Anitawati Hermawan
Chapter 3. Exploring a State-owned Bank’s Adoption of Sustainable Finance: Evidence from a Developing Country; Naufal Daffaveda Adam and Desi Adhariani
Chapter 4. How Green is Green Banking? An Analysis of Slack and Green practices in the Banking Industry; Malisa Salsabila and Desi Adhariani
Chapter 5. Relationship Between Financial Market Freedom and Economic Growth: An Empirical Evidence from India; Amlan Ghosh
Chapter 6. The Effect of Extensible Business Reporting Language (XBRL) Adoption on Earning Management - Empirical Evidence from an Emerging Country; Frista, Sidharta Utama, and Sylvia Veronica Siregar
Chapter 7. The Impact of Labor Rights on Equity Market Returns: A Cross-Country Analysis; Robin Lie
The effect of accrual earnings management and real earnings management on earnings persistence and cost of equity
No full textThere are two kinds of earnings management: accrual earnings management and real earnings management. This study aims to assess the effect of earnings management on earnings persistence and cost of equity on 155 firms listed on the Indonesia Stock Exchange during the 2001-2010 periods. Analysis in this study uses the Panel Regression Fixed Effect method. The result shows that accrual and real earnings management do not weaken earnings persistence. Furthermore, it was found that accrual earnings management has a positive effect on the cost of equity. Conversely, earnings management through real activity manipulation has a negative effect on the cost of equity. These results may indicate that investors are already aware of a firm’s earnings management behaviors through discretionary accrual, but may still not be aware of the negative impact of earnings management through real activity manipulation
Pengaruh Tanggung Jawab Sosial Strategis Dan Non Strategis Terhadap Manajemen Laba: Peran Perlindungan Investor Pada Industri Perbankan di ASEAN
Get PDFAbstract. The purpose of this study is to examine the effect of corporate social responsibility (differentiated into strategic and non-strategic) on earnings management. This study further distinguishes earnings management into accrual and real earnings management. In addition, this study also aims to examine the moderating role of investor protection on the association between strategic and non-strategic social responsibility and earnings management. The research sample is banking companies listed in 5 ASEAN countries. The results show a positive effect of non-strategic corporate social responsibility on accrual earnings management, but insignificant to real earnings managementt. The strategic corporate social responsibility has no significant effect on both type of earnings management. Investor protection only has a moderating role in the relationship between non-strategic social responsibility on accrual earnings management. Keywords. Banking; Corporate Social Responsibility; Earnings Management; Investor Protection. Abstrak. Tujuan penelitian ini adalah untuk membuktikan bahwa terdapat pengaruh tanggung jawab sosial yang dibedakan menjadi strategis dan non strategis terhadap manajemen laba. Penelitian ini membedakan manajemen laba menjadi manajemen laba akrual dan rill. Selain itu, penelitian ini juga bertujuan untuk membuktikan pengaruh peran perlindungan investor dalam memoderasi pengaruh tanggung jawab sosial strategis dan non strategis terhadap manajemen laba. Sampel penelitian adalah perusahaan perbankan yang terdaftar di 5 negara ASEAN. Hasil penelitian menunjukkan pengaruh positif tanggung jawab sosial non strategis terhadap manajemen laba akrual, namun tidak berpengaruh signifikan ke manajemen laba riil. Tanggung jawab sosial strategis tidak berpengaruh signifikan terhadap kedua jenis manajemen laba. Perlindungan investor hanya mempunyai peranan moderasi terhadap hubungan antara tanggung jawab sosial non strategis terhadap manajemen laba akrual
Analisis Pengaruh Ukuran Kantor Akuntan Publik Terhadap Kualitas Audit di Indonesia
No full textThis study aims to examine the effect of public accounting firm size, measured by number of partners, number of auditor staffs, number of clients, and public accounting firm’s revenue, on audit quality (measured by the accruals quality and going concern audit opinion). Samples are manufacturing firms listed in Indonesia Stock Exchange for the year 2006–2008 with total observations of 348 firm-years. Multiple regression and logistic regression is used for hypotheses testing. The results show that for the entire samples as well as for two sub samples, the sub-samples of firms audited by Big 4 and sub-samples of firms audited by Non-Big 4, there are no significant effect of public accounting firm size on audit quality. Large accounting firms does not always produce high quality audit. Thus, audit quality of large and small accounting firms can be considered fairly uniform
The Effect of Top Management Team Expertise on Corporate’s Accrual and Real Earnings Management
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