SMEs are the backbone in driving the Indonesian economy and play an essential role in creating jobs throughout Indonesia. Indonesian SMEs are the key to designing inclusive development through the merger of large & small businesses so that economic equity can touch all levels of society. This study examines several factors of Indonesian SMEs' organizational performance, such as beyond budgeting, competitor accounting, and transparency through competitive advantage. This research was conducted by distributing online questionnaires to business owners, financial managers, or financial supervisors of SMEs in Indonesia spread across six islands. A total of 155 questionnaires were obtained in this study and analysed by SMART PLS 3.2.9. The results show that beyond budgeting and transparency influence competitive advantage, while competitor accounting does not. Other results show that competitor accounting, transparency, and competitive advantage influence business performance, while beyond budgeting does not. Path analysis in this study shows that competitive advantage mediates beyond budgeting and transparency, while competitor accounting is not mediated. Researchers are aware that this study has limitations in data dissemination and was distributed during the COVID-19 pandemic conditions, which allowed for differences in results with other similar studies. Hopefully, with this research that practitioners will be able to provide other views beyond budgeting, competitor analysis, and the side of transparency for Small and Medium Enterprises in Indonesia. Policymakers can encourage SMEs to be more innovative and responsive to science through programs to increase business scale, considering the contribution of SMEs to Indonesia's gross domestic product. Further research is expected to analyze more deeply what factors affect the competitive advantage and organizational performance of small and medium enterprises, such as the availability of working capital, SME access to banks, how digitalization plays a role, etc.
Until now, there have been many cases of tax evasion that have occurred in Indonesia. Fraud is an act of deviation or omission that is intentionally carried out to deceive, or other parties suffering losses or fraud perpetrators obtaining financial benefits, either directly or indirectly. The design of this research based on literature review. Tax policy in the majority of countries was oriented towards mitigating health impacts and preventing economic pressure. Recently we have also seen other motives that various countries in the world want to achieve as Secretary-General Tax Report to G-20 Finance Ministers and Central Bank Governors. Quick responses through various tax relaxations came through twenty-two legal products. One of the things that is being studied is changes to VAT policy scheme. Currently, the Indonesian Institute of Certified Public Accountants is submitting an exposure draft related to the SJI. Tax incentives provided during the COVID-19 pandemic has the potential to be misused. The role of Public Accountants in preventing and detecting fraud in the taxation sector can be maximized if the public accountant carries out adequate procedures in accordance with applicable auditing standards. Public accountants need to increase the independence of each individual e.g., Continuing Education Program (PPL).
PurposeDiscretionary accruals are earnings quality proxies that illustrate that the greater the value of discretionary accruals, the greater the practice of earnings management and vice versa. High-quality financial reports (especially earnings quality) are expected to help investors and potential investors to make decisions. This study analyses the factors that affect earnings quality, such as pre-managed earnings, liquidity and efficiency. Furthermore, the authors identify the moderating effect of the governance mechanisms proxied by the proportion of independent commissioners in conventional commercial banks listed on the Indonesia Stock Exchange.Design/methodology/approachThis study uses 226 banking data in the pre-corona crisis period 2013 until 2019. The data were analyzed using EViews 10 for hypothesis and MS Excel for a differential test.FindingsThe results show that pre-managed earnings, liquidity and efficiency affect earnings quality. The governance mechanisms can moderate liquidity and efficiency on earnings quality, while pre-managed earnings cannot be moderated. The different bank categories (BUKU) of earnings management mechanisms are shown for each BUKU (BUKU 1, 3 and 4 perform earnings management by increasing earnings, BUKU 2 lowering earnings). Another thing is information on the earnings quality between BUKU 2 with BUKU 3 and BUKU 4 because of differences in capital and bank operating coverage regulations.Research limitations/implicationsFurther research expects to analyze the factors affecting banking earnings quality concerning applying IFRS 9 (PSAK 71) in Indonesia. Future researchers expect to apply mixed methods to verify the financial statement data and provide comprehensive discussion and genuine insight from their study. Future research requires more samples from companies or an international scale (cross country) to obtain maximum results and be generally accepted.Practical implicationsThis study implies that managers should have more control over pre-managed earnings and bank liquidity as manager's incentive to do earnings smoothing. Managers should also pay attention to cost-efficiency and effective implementation of governance mechanisms to maximize earnings quality. This study also implies that policymakers can encourage commercial banks to apply more prudential principles in terms of a reserve for failed loans to minimize earnings management in banking.Originality/valueThe significance of this study revealed in the discussion of the difference test between bank core capital categories (BUKU) and its relation to earnings quality.
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