A'inaul Madriyah


The issue of earnings management continues to attract debate and controversy, in one hand earnings management is facilitated by the flexibilities of general accepted accounting principles. But in the other hand the practice of earnings management is often viewed as an unethical practices by managers to achieve personal gains. The practice of earnings management by managers in financial reporting process, because they want to achiece certain benefits.
The primary objective of the current study is to investigate whether there is any manipulation of accounting earnings through discretionary accrual choices by acquiring firms in the period preceding the acquisitions. The current study is an explanatory research that explain, is there any possibilities that the acquirings firm tend to do earnings management preceeding the acquisitions through their accruals policy. The current study focuses on a sample of acquiring firms listed on the Jakarta stock exchange. From 19 firms that make merger and acquisition during the period of 2003-2006, by purposive sampling method there are 15 firms that selected as sample for current research. Discretionary accruals is define as management intervention in financial reporting processl.
Using the One-Sample T-Test with 95% degree of trust and 5% sigficancy, the mean and median of discretionary current accruals during three years preceding acquisitions is negative -0.073, -0.254555 dan -0.112155 respectively and they are significantly different from zero, this result means that acquiring firms do earnings management practice. The discretionary accruals is negative means that acquiring firms manage earnings by income decreasings. The decreasing of income will affect firm?s share price, and it will caused the decreasing of capital gain that receive by investor. By do so the smaller the income tax for capital gain that must be paid by stock holders.


Keyword : manajemen laba, discretionary accruals, merger dan akuisisi. earnings management, discretionary accruals, merger and acquisitions


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manajemen laba; discretionary accruals; merger dan akuisisi; earnings management; discretionary accruals; merger and acquisitions