Do Corporate Social Responsibility and Investor Protection Limit Earnings Management? Evidence from Indonesia and Malaysia

Muliati, Muliati; Mayapada, Arung Gihna; Pattawe, Abdul

doi:10.18196/jai.v22i3.11515

Cited by 6 publications

(9 citation statements)

References 60 publications

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“…Therefore, the final sample is 78 companies, resulting in 156 firm-year observations. For the CSR disclosure variable (CSR) measurement, this study follows previous studies [7], [8], [9], [17] which use an unweighted CSR disclosure index as asserted in the Global Reporting Initiatives (GRI). The index has a total of 91 items.…”

Section: Methodsmentioning

confidence: 99%

“…Therefore, it is expected that corporate social responsibility can lower the amount of earnings management conducted by management. Previous studies in Indonesia [7], [8], in the US [11], as well as in China [1], [6] demonstrates that CSR positively impact on earnings quality. However in Saudi Arabia, Habbash and Haddad [16] documents that CSR disclosures positively influences earnings management.…”

Section: The Influence Of Csr On Earnings Qualitymentioning

confidence: 99%

“…The results are mixed depending upon the observed sample. In the plantation industry, Muliati et al [7] find that CSR is more likely to enhance earnings quality. Similar results were also found in companies listed on the LQ 45 index [8].…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Corporate Social Responsibility Disclosures and Earnings Quality: Evidence from Indonesia

Ika¹,

Indriani²,

Setianan³

et al. 2022

Proceedings of the 3rd International Conference of Business, Accounting, and Economics, ICBAE 2022, 10-11 August 2022, Purwoker

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This article investigates the impact of corporate social responsibility (CSR) disclosures on earnings quality, as measured by real earnings management (REM). In particular, this study investigates whether CSR reporting are situation-dependent, i.e., if the managements are required to act responsibly to restrain earnings management, hence publish a higher quality of earnings information to shareholders. This study employs 156 listed companies in manufacturing industry in 2018 and 2019 as the sample. Results from the multiple regressions analysis indicate that CSR disclosures has a positive association with earnings quality. The results imply that companies who report more CSR activities in their annual report tend to avoid income-decreasing discretionary accruals activities. This finding suggests that managers who are incentivized to disclose more CSR activities are concerned to reduce information asymmetry which therefore will also be less likely to manipulate earnings. The conclusions of the study have practical consequences for some parties, including regulators, investors, and business associates. From an ethical standpoint, manufacturing firms in Indonesia with more social responsibility provide more reliable financial information.

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Section: Methodsmentioning

confidence: 99%

Section: The Influence Of Csr On Earnings Qualitymentioning

confidence: 99%

See 1 more Smart Citation

Corporate Social Responsibility Disclosures and Earnings Quality: Evidence from Indonesia

Ika¹,

Indriani²,

Setianan³

et al. 2022

Proceedings of the 3rd International Conference of Business, Accounting, and Economics, ICBAE 2022, 10-11 August 2022, Purwoker

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“…Common law adalah sistem hukum yang didominasi oleh hukum tidak tertulis dan keputusan hakim masa lalu. Menurut Muliati et al (2021) keputusan hakim di pengadilan di negara-negara code law didasarkan pada aturan tertulis sehingga manajemen dapat memanfaatkan celah aturan tertulis yang ada untuk melakukan tindakan curang terhadap pemegang saham luar. Sebaliknya, hakim di pengadilan di negara-negara common law diberikan kebebasan untuk menafsirkan aturan yang ada dan keputusan hakim secara luas di masa lalu untuk memutuskan suatu perkara meskipun belum diatur dalam peraturan tertulis (Muliati et al, 2021).…”

Section: Kerangka Teoretis Dan Pengembangan Hipotesisunclassified

Managerial Ability, Income Smoothing Dan Earnings Informativeness: Bukti Dari Pasar Modal Indonesia

Fuadi¹,

Ratu

Fanni

2022

akurasi

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Hubungan antara perataan laba dan keinformatifan laba ditentukan oleh alasan mengapa perusahaan menggunakannya. Mengambil keuntungan dari adanya motif oportunistik dalam melakukan perataan laba di perusahaan Indonesia, penelitian ini menginvestigasi apakah perataan laba mengurangi tingkat keinformatifan laba. Penelitian ini memperluas literatur dengan mempertimbangkan apakah kecakapan manajerial dapat memperlemah hubungan antara perataan laba yang bersifat oportunistik terhadap keinformatifan laba. Penelitian ini menggunakan sampel 356 observasi perusahaan dan tahun yang terdaftar di Bursa Efek Indonesia (BEI) periode 2015 sampai 2018. Hasil penelitian ini menunjukkan bahwa perataan laba secara signifikan mengurangi keinformatifan laba dan hubungan tersebut diperlemah oleh manajer berkemampuan tinggi. Penelitian ini menunjukkan hasil yang konsisten setelah dilakukan uji ketahanan. Sementara penelitian sebelumnya pada topik perataan laba, keinformatifan laba dan kecakapan manajerial terutama berfokus pada negara maju, hanya ada sedikit bukti pada negara berkembang. Sejauh pengetahuan kami, penelitian ini adalah yang pertama menginvestigasi peran kecakapan manajerial dalam memitigasi dampak perataan laba pada keinformatifan laba dalam konteks Indonesia.

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“…Indonesia is one of the emerging countries that have relatively weak investor protection (Muliati et al, 2021). La Porta et al (1998) emphasised that countries with civil-law practices, one of which is Indonesia, have a lower level of investors' protection compared to countries that use the common-law system.…”

Section: : Introductionmentioning

confidence: 99%

The role of Outside Directors in Tunnelling-related Tax Avoidance: Evidence from Indonesia

Fletcher,

Falbo

2024

Preprint

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Indonesia relies heavily on taxation revenues thus tax avoidance in corporations needs to be minimised. We explore the relationship between tax avoidance and tunnelling, and specifically whether the presence of outside directors as board members affects this relationship by examining a sample of non-cyclical consumer firms listed on the Indonesia Stock Exchange (IDX) from 2016 to 2020. When the tunnelling approach is used through normal business operations, we find that tax avoidance enables tunnelling activities, which benefit the controlling shareholders. Tax avoidance affects tunnelling in three ways: by providing additional cash flow from tax savings that can be tunnelled to controlling shareholders, by creating accounting opacity from the complex tax strategies that can obscure the tunnelling activities, and by using the related party transactions for both tax avoidance and tunnelling purposes. The results further show that the existence of outside directors as part of the governance mechanism can moderate the tax avoidance-tunnelling relationship.

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Do Corporate Social Responsibility and Investor Protection Limit Earnings Management? Evidence from Indonesia and Malaysia

Cited by 6 publications

References 60 publications

Corporate Social Responsibility Disclosures and Earnings Quality: Evidence from Indonesia

Corporate Social Responsibility Disclosures and Earnings Quality: Evidence from Indonesia

Managerial Ability, Income Smoothing Dan Earnings Informativeness: Bukti Dari Pasar Modal Indonesia

The role of Outside Directors in Tunnelling-related Tax Avoidance: Evidence from Indonesia

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