EFEK ENTRENCHMENT DAN ALIGNMENT PADA MANAJEMEN LABA
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Institusion
Universitas Atma Jaya Yogyakarta
Author
Sanjaya, I Putu Sugiartha
Subject
Akuntansi Keuangan
Datestamp
2015-01-08 09:28:05
Abstract :
The objective of this research is to investigate whether controlling shareholder manages earnings. The issue is most important to be revealed because ownership of public companies is concentrated and low protections for noncontrolling shareholders in Indonesia. Therefore, controlling shareholder is motivated to manage earnings. This research also investigates whether control rights of controlling shareholder positively influence earnings management. The issue relates to entrenchment effect. This research also investigates whether cash flow rights reduce earnings management. The issue relates to alignment effect. This research used data of ultimate ownership and financial statement. The data were collected from Indonesia Stock Exchange during 2001 to 2007. There are 786 year companies during seven years. This study documents that the control rights motivate the controlling shareholder to manage earnings. Control rights entrench controlling shareholder to manage earnings opportunistically. Cash flow rights negatively influence earnings management. To signal good financial condition, controlling shareholder manages earnings efficiently. Cash flow right leverage is an incentive to controlling shareholder to manage earnings. This research also documents that cash flow right leverage entrenches controlling shareholder to manage earnings opportunistically.
The objective of this research is to investigate whether controlling shareholder manages earnings. The issue is most important to be revealed because ownership of public companies is concentrated and low protections for noncontrolling shareholders in Indonesia. Therefore, controlling shareholder is motivated to manage earnings. This research also investigates whether control rights of controlling shareholder positively influence earnings management. The issue relates to entrenchment effect. This research also investigates whether cash flow rights reduce earnings management. The issue relates to alignment effect. This research used data of ultimate ownership and financial statement. The data were collected from Indonesia Stock Exchange during 2001 to 2007. There are 786 year companies during seven years. This study documents that the control rights motivate the controlling shareholder to manage earnings. Control rights entrench controlling shareholder to manage earnings opportunistically. Cash flow rights negatively influence earnings management. To signal good financial condition, controlling shareholder manages earnings efficiently. Cash flow right leverage is an incentive to controlling shareholder to manage earnings. This research also documents that cash flow right leverage entrenches controlling shareholder to manage earnings opportunistically.
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