Reflection the Meaning of Earning Management Practices on Financial Statement Users

International Journal of Economics and Management Studies

© 2021 by SSRG - IJEMS Journal

Volume 8 Issue 12

Year of Publication : 2021

Authors : Ayu Kemala, Sukma Perdana, Ayu Agus Tya Ningsih

10.14445/23939125/IJEMS-V8I12P103

How to Cite?

Ayu Kemala, Sukma Perdana, Ayu Agus Tya Ningsih, "Reflection the Meaning of Earning Management Practices on Financial Statement Users," SSRG International Journal of Economics and Management Studies, vol. 8,  no. 12, pp. 11-15, 2021. Crossref, https://doi.org/10.14445/23939125/IJEMS-V8I12P103

Abstract:

Financial statements are commonly used as a tool to convey actual company information and the main objective of knowing the company's profit. From here, the manager of a company will be given the trust to manage company resources in order to get the maximum profit possible. Managers who engage in earnings management practices are motivated to be proactive to look for loopholes in an effort to improve their own welfare. The practice of earnings management is the intervention of the management itself. Moreover, in the financial reporting process, most of the benefits themselves.
This study aims to identify how earnings management practices and financial statement actors are able to interpret earnings management practices in companies in the service sector and whether there are differences between the meanings of earnings management practices between one company and another, it is between state-owned companies (post offices) and private companies (JNE). The approach in this study uses a qualitative approach with the type of case study research. The findings stated that every company that carries out earnings management has its own reasons, including efforts to achieve productivity targets, profit income, and fixed production cost efficiency, as well as communicating private information.

Keywords:

Earnings Management, Financial Statements.

References:

[1] Arifin, Lavenia and Destriana, Nicken, The effect of firm size, corporate governance, and company characteristics on earnings management. Business and accounting journal. 18(1) (2016) 84-93.
[2] Creswell, John W, Qualitative Research and Research Design. 3rd ed., Printing I. STUDENT LIBRARY: Yogya karta. (2015)
[3] Fahmi, Irham, Risk Management Theory, Cases, and Solutions. Alphabet: Bandung. (2013)
[4] Kamayanti, Ari. Accounting Qualitative Research Methods, Peneleh House Foundation: South Jakarta. (2016)
[5] Kusworo, Ekasri. The effect of audit quality, leverage, firm size, and formation asymmetry on earnings management. (2016)
[6] Lee, Rice, The influence of financial factors on earnings management with corporate governance as a moderating variable, Journal of Microeconomics Wira Medan 6(1) (2016).
[7] Mayasari, et.al. The Infuence of corporate governance, company size, and leverage toward earning management. Trisakti Accounting Journal. 6(1) (2019).
[8] Miles, Matthew and Michael Huberman, Qualitative Data Analysis, University of Indonesia. (1992)
[9] Permatasari, Ditya, Real Management Practices Avoid Decline in Profits. (2019)
[10] Purwanti, Lilik, Reflections on my behavior in using money laundering on internal management practices in Weton's perspective. (2015)
[11] Prasetya, Juni Pria and Gayatri, The Effect of Firm Size on Earnings Management with Disclosure of Corporate Social Responsibility as an Intervening Variable. (2016)
[12] Purnomo, Budi.s and Puji Pratiwi, The effect of audit quality, leverage, firm size, and information asymmetry on earnings management. Journal of Media Economics. 14(1) (2009).
[13] Rahmawati, Financial Accounting Theory. First ed., GrahaIlmu: Yogyakarta. (2012)
[14] Rohmaniyah, Alifiyatur and Khanifah, Analysis of earnings management in the financial statements of Islamic banking. Journal of economics and business. 13(1) (2018).