The Effect of Director's Remuneration, Audit Fee, and Director's Expertise on Earnings Management with Sales Growth as Moderating Variable

Septiana Indrawati, Dwi Asih Surjandari

Abstract


The purpose of this study is to examine the factors that influence earnings management practices in state-owned companies and their subsidiaries listed on the Indonesia Stock Exchange. The samples used in this study were 9 state-owned companies and subsidiaries listed on the IDX for the period 2013-2019, with a total of 63 samples. The analytical tool used to analyze the hypothesis is Eviews 11.0. The results showed that the expertise of the director has a significant positive effect on earnings management. However, director's remuneration and audit fee have no effect on earnings management. Sales growth proved unable to moderate the relationship of director remuneration, audit fees and director's expertise to earnings management. This research has important implications for building informal control over an action that will be taken by the directors through the perspective of religiosity in influencing the behavior and decisions that will be taken by the directors.

Keywords


Director remuneration; audit fee; director expertise; sales growth; earnings management

Full Text:

PDF

References


Abdelsalam, O., Chantziaras, A., Ibrahim, M., & Omoteso, K. (2020). The impact of religiosity on earnings quality: International evidence from the banking sector. British Accounting Review, 100957. https://doi.org/10.1016/j.bar.2020.100957

Akbar, C. (n.d.). Ada Kasus Rekayasa Laporan Keuangan Jiwasraya, IAPI Sarankan Ini. Retrieved March 18, 2020, from https://bisnis.tempo.co/read/1294697/ada-kasus-rekayasa-laporan-keuangan-jiwasraya-iapi-sarankan-ini

APBN, D. P. (n.d.). Informasi APBN 2019:APBN Untuk Mendorong Investasi dan Daya Saing Melalui Pembangunan Sumber Daya Manusia. Retrieved January 2, 2020, from https://www.kemenkeu.go.id/media/11213/buku-informasi-apbn-2019.pdf

Bala, H., Amran, N. A., & Shaari, H. (2018). Audit Fees and Financial Reporting Quality: A Study of Listed Companies in Nigeria. International Review of Management and Business Research, 7(2), 483–490. https://doi.org/10.30543/7-2(2018)-17

Bouaziz, D., Salhi, B., & Jarboui, A. (2020). CEO characteristics and earnings management: empirical evidence from France. Journal of Financial Reporting and Accounting, 18(1), 77–110. https://doi.org/10.1108/JFRA-01-2019-0008

Cherkasova, V., & Markina, V. (2021). Do CEO Characteristics Impact a Company’s Earnings Quality? Montenegrin Journal of Economics, 17(2).

Diri, M. El. (2018). Introduction to earnings management. In Introduction to Earnings Management. Springer.

Donatella, P., Haraldsson, M., & Tagesson, T. (2019). Do audit firm and audit costs/fees influence earnings management in Swedish municipalities? International Review of Administrative Sciences, 85(4), 673–691. https://doi.org/10.1177/0020852317748730

Ekananda, M. (2016). Analisis Ekonometrika Data Panel : Teori Lengkap Dan Pembahasan Menyeluruh Bagi Penelitian Ekonomi, Bisnis, Dan Sosial (Ed. 2 Cet.). Mitra Wacana Media.

Gugus, I., & Nurlita, N. (2019). Dealing with Fraud. Universitas Brawijaya Press.

Hai, P. T., Toan, L. D., & Quy, N. L. D. (2019). Effect of audit rotation, audit fee and auditor competence to motivation auditor and audit quality: Empirical evidence in Vietnam. Academy of Accounting and Financial Studies Journal, 23(2), 1–14.

Hakim, L., Daito, A., & Mulya, H. (2021). EFFECTS OF MANAGERIAL SKILLS , GOVERNANCE COMPLIANCE , AND IFRS IMPLEMENTATION ON EARNINGS MANAGEMENT. PalArch’s Journal of Archaeology of Egypt / Egyptology, 18(4), 6763–6774.

IAPI. (2016). Peraturan Pengurus Nomor 2 Tahun 2016 Tentang Penentuan Imbalan Jasa Audit Laporan Keuangan.

Jensen, M. ., & Meckling, W. H. (1976). Theory of The Firm: Managerial Behavior, Agency Cost and Ownership Structure. Journal of Financial Economics, 3(4), 305–360.

Kankanamage, C. A. (2015). The relationship between board characteristics and earnings management: evidence from Sri Lankan listed companies. Kelaniya Journal of Management, 4(2), 36–43. https://doi.org/10.4038/kjm.v4i2.7499

Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2020). Intermediate Accounting IFRS Edition (4Th Editio). John Wiley and Sons.

Kohlbeck, M., & Luo, X. (2019). Are CFO debt-like compensation incentives associated with financial reporting quality? Advances in Accounting, 45. https://doi.org/10.1016/j.adiac.2019.03.001

Li, L., & Kuo, C. S. (2016). CEO equity compensation and earnings management: The role of growth opportunities. Finance Research Letters, 1–7. https://doi.org/10.1016/j.frl.2016.10.013

Lubis, R. H., & Dewi, R. S. (2020). Pemeriksaan Akuntansi 1 (Auditing 1) (Cetakan 1). Kencana.

Melinda, & Widyasari. (2019). Faktor Yang Mempengaruhi Manajemen Laba Perusahaan Manufaktur Yang Terdaftar di BEI. Jurnal Multiparadigma Akuntansi, 1(2), 452–359.

Menicucci, E. (2020). Earnings quality: Definitions, measures, and financial reporting. Palgrave Pivot.

Mohmed, A., Flynn, A., & Grey, C. (2020). The link between CSR and earnings quality: evidence from Egypt. Journal of Accounting in Emerging Economies, 10(1), 1–20. https://doi.org/10.1108/JAEE-10-2018-0109

Muhammad, R., & Pribadi, P. (2020). Pengaruh Kompensasi Bonus, Pendidikan dan Komposisi Gender Dewan Direksi Terhadap Manajamen Laba pada Bank Syariah di Indonesia. Jurnal Ilmiah Ekonomi Islam, 6(1), 53–69. https://doi.org/10.29040/jiei.v6i1.601

Muslih, M.-. (2018). Pengaruh Kompensasi Komisaris Dan Direksi Terhadap Laba Perusahaan, Dengan Corporate Governance Sebagai Pemoderasi. Jurnal Akuntansi Universitas Jember, 16(2), 98–110. https://doi.org/10.19184/jauj.v16i2.9796

Nugrahani, N. I. (2019). Pengaruh Kinerja Keuangan, Pertumbuhan Laba, dan Free Cash Flow Terhadap Kualitas Laba. Jurnal Ilmu Dan Riset Akuntansi, 8(11).

Nurbach, S. A., Purwohedi, U., & Handarini, D. (2019). Earnings Quality: The Association of Board diversity, Executive Compensation, Debt Covenant, and Investment Opportunity Sets. KnE Social Sciences, 3(11), 215–242. https://doi.org/10.18502/kss.v3i11.4009

Nurlis, & Indriawati, F. (2020). Earnings Management : Empirical Evidence on Determinants in Indonesia. European Journal of Business and Management, 12(3), 27–32. https://doi.org/10.7176/ejbm/12-3-04

Octoviany, G., & Herawaty, V. (2019). Pengaruh Pembayaran Dividen, Prospek Pertumbuhan Perusahaan Dan Volatilitas Arus Kas Operasional Terhadap Kualitas Laba Dengan Good Corporate Governance Sebagai Variabel Moderasi. Seminar Nasional Cendekiawan Ke 5, 2. https://doi.org/10.25105/semnas.v0i0.5811

Okedzie O, S., & Uchenna, E. D. (2019). Audit Independence and Reliability of Financial Reports : Empirical Evidence from Nigerian Banks. IIARD International Journal of Economics and Business Management, 5(3), 43–52.

Prabowo, A. (n.d.). Siaran Pers : Otoritas Jasa Keuangan Berikan Sanksi Kasus PT Garuda Indonesia (Persero )TBK. Retrieved January 1, 2020, from https://www.ojk.go.id/id/berita-dan-kegiatan/siaran-pers/Pages/Siaran-Pers--Otoritas-Jasa-Keuangan-Berikan-Sanksi-Kasus-Pt-Garuda-Indonesia-Persero-Tbk.aspx

RI, K. B. (n.d.). Laporan Kinerja Kementerian BUMN 2019. Retrieved January 3, 2020, from https://bumn.go.id/storage/report/milgz1io0eeidM26o8ymbv58z4uznahWZYFK3cJv.pdf

Rosan, M. I. (n.d.). Laporan Keuangan Audited 2018 dan Q1/2019 Disajikan Kembali; Garuda Indonesia Bukukan Laba Usaha Sebesar 19,7 Juta Dollar Pada Q1-2019. Retrieved January 1, 2020, from https://www.idx.co.id/StaticData/NewsAndAnnouncement/ANNOUNCEMENTSTOCK/From_EREP/201907/f31eee7581_bd9671105a.pdf

Ross, S. A. (1977). Determination of Financial Structure: the Incentive-Signalling Approach. Bell J Econ, 8(1), 23–40. https://doi.org/10.2307/3003485

Rubin, A., & Segal, D. (2019). Directors skill and financial reporting quality. Journal of Business Finance and Accounting, 46(3–4), 457–493. https://doi.org/10.1111/jbfa.12359

Setiyawati, H., Hidayah, N., Rahmatika, D. N., & Indriasih, D. (2020). The Factors That Affect The Quality of Financial Reporting. International Journal of Economics and Management Studies, 7(1), 33–39. https://doi.org/10.14445/23939125/ijems-v7i1p105

Sivanandan, P., & Wahab, N. S. A. (2020). Mediating Effects of Remuneration on Earnings Management and Firm Equity Value. Asian Journal of Accounting and Governance, 14, 1–13. https://doi.org/10.17576/ajag-2020-14-01

Smith, C. W., & Watts, R. L. (1992). The investment opportunity set and corporate financing, dividend, and compensation policies. Journal of Financial Economics, 32(3), 263–292. https://doi.org/10.1016/0304-405X(92)90029-W

Sulistyanto, S. (2018). Manajemen Laba: Teori dan Model Empiris (Cetakan II). Grasindo.

Tanjung, P. R. S. (2019). Pengaruh, Debt To Equity Ratio, Likuiditas Dan Investment Opportunity Set (Ios) Terhadap Kualitas Laba. Jurnal Ekonomi Dan Publik, 2(2), 119–130.

Vernimmen, P., Quiry, P., Dallocchio, M., Fur, Y. Le, & Salvi, A. (2018). Corporate finance: theory and practice (Fifth edit). Wiley.

Wati, L. N. (2018). Metodologi Penelitian Terapan Aplikasi SPSS, EVIEWS, Smart PLS, dan AMOS (Edisi Kedu). CV. Pustaka Amri.

Watts, R. ., & Zimmerman, J. . (1990). Positive Accounting Theory: A Ten Year Perspective. The Accounting Review, 65(1), 131–156.

Whittington, O. R., & Pany, K. (2016). Principles of Auditing & Other Assurance Services Principles of Auditing & Other Assurance Services Twentieth Edition. McGraw-Hill Education.

Yustiningarti, N. D., & Asyik, N. F. (2017). Pengaruh Asimetri Informasi, Mekanisme Corporate Governance dan Kompensasi Bonus terhadap Manajemen Laba. Jurnal Ilmu Dan Riset Akuntansi, 6(1), 31–40. http://www.mikroskil.ac.id/ejurnal/index.php/jwem/article/view/223/146

Zakia, V., Diana, N., & Mawardi, M. C. (2019). Pengaruh Kepemilikan Manajerial, Kepemilikan Institusional, Ukuran Perusahaan, Leverage, Profitabilitas, Pertumbuhan Penjualan Terhadap Manajemen Laba Dengan Good Corporate Governance Sebagai Variabel Moderating. E-Jounal Riset Akuntansi, 08(04), 26–39. http://ejurnal.unisri.ac.id/index.php/Akuntansi/issue/view/285

Zhang, D. (2019). Top Management Team Characteristics And Financial Reporting Quality. The Accounting Review, 94(5), 349–375. https://doi.org/https://doi.org/10.2308/accr-52360

Zouari, Z., Lakhal, F., & Nekhili, M. (2015). Do CEO’s Characteristics Affect Earnings Management? Evidence from France. International Journal of Innovation and Applied Studies, 4(Sep 2015), 801–819. https://doi.org/10.2139/ssrn.2082009




DOI: http://doi.org/10.33312/ijar.581

Refbacks

  • »
  • »
  • »
  • »
  • »
  • »
  • »
  • »
  • »
  • »
  • »
  • »
  • »
  • »


-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Indonesian Journal of Accounting Research (IJAR)

Editorial Secretariat

Master of Science and Doctoral Programs
Faculty of Economics and Business, Gadjah Mada University

Jl. Nusantara, Bulaksumur Yogyakarta 55281
CP : Novita
Phone  : +62 812-2848-2829
Fax    : +62 274 524606
Website: http://ijar-iaikapd.or.id/
Email  : sekretariat@ijar-iaikapd.or.id

Marketing and Sales Office

Ikatan Akuntan Indonesia
Graha Akuntan, Jl. Sindanglaya No.1 Menteng, Jakarta Pusat 10310
CP : Reza Fauzi
Divisi Pelayanan, Keanggotaan dan Mitra IAI.
Grha Akuntan, Jl. Sindanglaya No.1, Menteng.
Telp.021-31904232 Ext.324/321

 

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ISSN 2086-6887 (Print)
ISSN 2655 - 1748 (online)

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

 

----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------