Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Impact of Earning Volatility, Real Earnings Management and Accruals on Investment Policy: Evidence from Indonesia
Dublin Core
Title
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Impact of Earning Volatility, Real Earnings Management and Accruals on Investment Policy: Evidence from Indonesia
Impact of Earning Volatility, Real Earnings Management and Accruals on Investment Policy: Evidence from Indonesia
Subject
Earnings Management; investment policy; volatility
Description
This study aims to analyze earnings volatility, real earnings management, and accrual earnings management on the company's investment policy. This study examines the effect of earnings volatility on investment policy in more depth, where the volatility of earnings can affect the company's earnings management activities and investment policy. The previous research was only related to cash flow volatility on investment policy, in fact,
earnings volatility determines the investment policy, and earnings volatility is only related to debt policy, whereas debt policy is to maximize the company’s investment. The sample used in this study was 117 manufacturing companies that were listed on the Indonesian stock exchange with a total of 351 observations during the year 2018-2020. This study used 2 models, each of which was tested by linear regression. The results showed that earnings volatility increased management motivation in carrying out real earnings management and accrual earnings management practices through the manipulation of production costs done by managers. However, a larger effect of volatility was found in the real earnings management model. Accrual earnings management affected the company's over-under investment policy, while real earnings management through operating cash flow and production costs had no significant effect on investment policy. Accrual earnings management was able to increase the company's over-under investment policy.
earnings volatility determines the investment policy, and earnings volatility is only related to debt policy, whereas debt policy is to maximize the company’s investment. The sample used in this study was 117 manufacturing companies that were listed on the Indonesian stock exchange with a total of 351 observations during the year 2018-2020. This study used 2 models, each of which was tested by linear regression. The results showed that earnings volatility increased management motivation in carrying out real earnings management and accrual earnings management practices through the manipulation of production costs done by managers. However, a larger effect of volatility was found in the real earnings management model. Accrual earnings management affected the company's over-under investment policy, while real earnings management through operating cash flow and production costs had no significant effect on investment policy. Accrual earnings management was able to increase the company's over-under investment policy.
Creator
I Dewa Made Endiana, Putu Diah Kumalasari
Source
DOI: 10.26905/jkdp.v26i4.7992
Publisher
Universitas Merdeka Malang
Date
October 2022
Contributor
Sri Wahyuni
Rights
ISSN: 2443-2687 (Online) ISSN: 1410-8089 (Print)
Format
PDF
Language
English
Type
Text
Coverage
Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Files
Collection
Citation
I Dewa Made Endiana, Putu Diah Kumalasari, “Jurnal Keuangan dan Perbankan Universitas Merdeka Malang
Impact of Earning Volatility, Real Earnings Management and Accruals on Investment Policy: Evidence from Indonesia,” Repository Horizon University Indonesia, accessed November 21, 2024, https://repository.horizon.ac.id/items/show/4870.
Impact of Earning Volatility, Real Earnings Management and Accruals on Investment Policy: Evidence from Indonesia,” Repository Horizon University Indonesia, accessed November 21, 2024, https://repository.horizon.ac.id/items/show/4870.