ojs2 has produced an error Message: WARNING: Invalid argument supplied for foreach() In file: /home/jab1/public_html/lib/pkp/classes/core/Core.inc.php At line: 149 Stacktrace: File: /home/jab1/public_html/lib/pkp/classes/core/Core.inc.php line 149 Function: PKPApplication->errorHandler(2, "Invalid argument supplied for foreach()", "/home/jab1/public_html/lib/pkp/classes/core/Core.inc.php", 149, Array(6)) File: /home/jab1/public_html/lib/pkp/classes/core/PKPRequest.inc.php line 463 Function: Core->isUserAgentBot("Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)") File: /home/jab1/public_html/plugins/generic/usageEvent/UsageEventPlugin.inc.php line 353 Function: PKPRequest->isBot() File: /home/jab1/public_html/plugins/generic/usageEvent/UsageEventPlugin.inc.php line 106 Function: UsageEventPlugin->_buildUsageEvent("TemplateManager::display", Array(5)) File: (unknown) line (unknown) Function: UsageEventPlugin->getUsageEvent("TemplateManager::display", Array(5)) File: /home/jab1/public_html/lib/pkp/classes/plugins/HookRegistry.inc.php line 89 Function: call_user_func(Array(2), "TemplateManager::display", Array(5)) File: /home/jab1/public_html/lib/pkp/classes/template/PKPTemplateManager.inc.php line 332 Function: HookRegistry->call("TemplateManager::display", Array(5)) File: /home/jab1/public_html/pages/article/ArticleHandler.inc.php line 224 Function: PKPTemplateManager->display("article/article.tpl") File: (unknown) line (unknown) Function: ArticleHandler->view(Array(2), Object(Request)) File: /home/jab1/public_html/lib/pkp/classes/core/PKPRouter.inc.php line 362 Function: call_user_func(Array(2), Array(2), Object(Request)) File: /home/jab1/public_html/lib/pkp/classes/core/PKPPageRouter.inc.php line 220 Function: PKPRouter->_authorizeInitializeAndCallRequest(Array(2), Object(Request), Array(2), False) File: /home/jab1/public_html/lib/pkp/classes/core/Dispatcher.inc.php line 134 Function: PKPPageRouter->route(Object(Request)) File: /home/jab1/public_html/lib/pkp/classes/core/PKPApplication.inc.php line 178 Function: Dispatcher->dispatch(Object(Request)) File: /home/jab1/public_html/index.php line 64 Function: PKPApplication->execute() Server info: OS: Linux PHP Version: 5.6.40-38+ubuntu18.04.1+deb.sury.org+1 Apache Version: N/A DB Driver: mysql DB server version: 5.7.33-0ubuntu0.16.04.1-log
Earnings Quality: The Moderating Role of CEO's Demographic Backgrounds in Agency Relationships | Karyadi | Jurnal Akuntansi dan Bisnis

Earnings Quality: The Moderating Role of CEO's Demographic Backgrounds in Agency Relationships

Enrico Adhanur Karyadi, Kuwat Slamet

##article.abstract##


Chief executive officer (CEO) as a company leader plays important role in influencing the relationships with its stakeholder, especially within the perspective of agency relationships. This study aims to examine the effect of bonuses, audit quality, and financial distress on earnings quality to represent potential conflicts in agency relationships as well as the moderating role of CEO demographic backgrounds on those effects. Using the sample of property and real estate companies listed on the Indonesia Stock Exchange (IDX) from 2014 to 2020, this study finds that bonuses and CEO demographic backgrounds are negatively associated with earnings quality, while both audit quality and financial distress are not associated with earnings quality. Audit quality plays an important role in aligning principals and agent interest in firms that are being led by CEO that have risky demographic backgrounds. However, CEO demographic backgrounds fail to moderate the agency conflict that occurs within manager-shareholders (bonuses) and manager-creditors (financial distress) on earnings quality. Future research should explore top management team effects demographic backgrounds on agency relationships.

Chief executive officer (CEO) sebagai pemimpin perusahaan berperan penting dalam memengaruhi hubungan dengan pemangku kepentingan, terutama dalam perspektif hubungan keagenan. Penelitian ini bertujuan untuk menguji pengaruh bonus, kualitas audit, dan kesulitan keuangan pada kualitas laba untuk mewakili potensi konflik dalam hubungan keagenan serta peran moderasi latar belakang demografis CEO pada pengaruh tersebut. Dengan menggunakan sampel perusahaan properti dan real estat yang terdaftar di Bursa Efek Indonesia (BEI) dari 2014 hingga 2020, penelitian ini menemukan bahwa bonus dan latar belakang demografis CEO berpengaruh negatif terhadap kualitas laba, sedangkan kualitas audit dan kesulitan keuangan tidak berpengaruh signifikan terhadap kualitas laba. Kualitas audit berperan penting dalam menyelaraskan kepentingan principal dan agent di perusahaan yang dipimpin oleh CEO yang memiliki latar belakang demografis yang berisiko. Akan tetapi, latar belakang demografis CEO gagal memoderasi konflik keagenan yang terjadi antara manajer-pemegang saham (bonus) dan manajer-kreditur (kesulitan keuangan) terhadap kualitas laba. Penelitian selanjutnya diharapkan menyelidiki pengaruh latar belakang demografis tim manajemen puncak pada hubungan keagenan.

##article.subject##


earnings quality; agency relationships; CEO demographic backgrounds

Full Text:

PDF

References


Abatecola, G., & Cristofaro, M. (2018). Hambrick and Mason’s “Upper Echelons Theory”: evolution and open avenues. Journal of Management History, 26(1), 116–136. https://doi.org/10.1108/JMH-02-2018-0016

Agustia, Y. P., & Suryani, E. (2018). Pengaruh Ukuran Perusahaan, Umur Perusahaan, Leverage, dan Profitabilitas Terhadap Manajemen Laba (Studi Pada Perusahaan Pertambangan yang Terdaftar di Bursa Efek Indonesia Periode 2014-2016). Jurnal ASET (Akuntansi Riset), 10(1), 63–74. https://doi.org/10.17509/jaset.v10i1.12571

Ahmad, L., Suhara, E., & Ilyas, Y. (2016). The Effect of Audit Quality on Earning Management within Manufacturing Companies Listed on Indonesian Stock Exchange. Research Journal of Finance and Accounting, 7(8), 132–138.

Aier, J. K., Comprix, J., Gunlock, M. T., & Lee, D. (2005). The Financial Expertise of CFOs and Accounting Restatements. Accounting Horizons, 19(3), 123–135. https://doi.org/10.2308/acch.2005.19.3.123 https://doi.org/10.2308/acch.2005.19.3.123

Ali, A., & Zhang, W. (2015). CEO tenure and earnings management. Journal of Accounting and Economics, 59(1), 60–79. https://doi.org/10.1016/j.jacceco.2014.11.004

Amiram, D., Bozanic, Z., Cox, J. D., Dupont, Q., Karpoff, J. M., & Sloan, R. (2018). Financial reporting fraud and other forms of misconduct: a multidisciplinary review of the literature. Review of Accounting Studies, 23(2), 732–783.

https://doi.org/10.1007/s11142-017-9435-x

Azizah, W. (2021). Covid-19 in Indonesia: analysis of differences earnings management in the first quarter. Jurnal Akuntansi, 11(1), 23-32.

Baatwah, S. R., Salleh, Z., & Ahmad, N. (2015). CEO characteristics and audit report timeliness: do CEO tenure and financial expertise matter? Managerial Auditing Journal, 30(8/9), 998–1022. https://doi.org/10.1108/MAJ-09-2014- 1097

Bassiouny, S. W. (2016). The impact of firm characteristics on earnings management: an empirical study on the listed firms in Egypt. Journal of Business & Retail Management Research, 10(3), 34–45.

Bouaziz, D., Salhi, B., & Jarboui, A. (2020). CEO characteristics and earnings management: empirical evidence from France. Journal of Financial Reporting and Accounting, 18(1), 77–110. https://doi.org/10.1108/JFRA-01-2019-0008

Brigham, E. F., & Houston, J. F. (2019). Fundamentals of Financial Management (15th ed.). Boston: Cengage Learning.

Christiani, I., & Nugrahanti, Y. W. (2014). Pengaruh Kualitas Audit Terhadap Manajemen Laba. Jurnal Akuntansi Dan Keuangan, 16(1), 52–62. https://doi.org/10.9744/jak.16.1.52-62

Claessens, S., & Yurtoglu, B. B. (2013). Corporate governance in emerging markets: A survey. Emerging Markets Review, 15, 1–33. https://doi.org/10.1016/j.ememar.2012.03.002

Davidson, R., Dey, A., & Smith, A. (2015). Executives’ “off-the-job” behavior, corporate culture, and financial reporting risk. Journal of Financial Economics, 117(1), 5–28. https://doi.org/10.1016/j.jfineco.2013.07.004

DeAngelo, L. E. 1981. Auditor size and audit quality. Journal of Accounting and Economics, 3(3), 183–199. https://doi.org/10.1016/0165-4101(81)90002-1

Dechow, P. M., Sloan, R. G., & Amy, P. S. (1995). Detecting Earnings Management. The Accounting Review, 70(April 1995), 193–225.

Deloitte. (2022). CEO Survey 2021: Survey on the Role of CEOs in Advancing Sustainability & ESG. Jakarta: PT Deloitte Konsultan Indonesia.

Francis, J., Huang, A. H., Rajgopal, S., & Zang, A. Y. (2008). CEO reputation and earnings quality. Contemporary Accounting Research, 25(1), 109–147. https://doi.org/10.1506/car.25.1.4

Ghazali, A. W., Shafie, N. A., & Sanusi, Z. M. (2015). Earnings Management: An Analysis of Opportunistic Behaviour, Monitoring Mechanism and Financial Distress. Procedia Economics and Finance, 28(April), 190–201. https://doi.org/10.1016/S2212-5671(15)01100-4

Godfrey, J., Hodgson, A., Tarca, A., Hamilton, J., & Holmes, S. (2010). Accounting Theory (7th ed.). New York: John Wiley & Sons.

Gounopoulos, D., & Pham, H. (2018). Financial Expert CEOs and Earnings Management Around Initial Public Offerings. The International Journal of Accounting, 53(2), 102–117. https://doi.org/10.1016/j.intacc.2018.04.002

Habib, A., Uddin Bhuiyan, B., & Islam, A. (2013). Financial distress, earnings management and market pricing of accruals during the global financial crisis. Managerial Finance, 39(2), 155–180. https://doi.org/10.1108/03074351311294007

Hambrick, D. C. (2007). Upper echelons theory: An update. Academy of Management Review, 32(2), 334–343. https://doi.org/10.5465/AMR.2007.24345254

Hambrick, D. C., & Mason, P. A. (1984). Upper Echelons: The Organization as a Reflection of Its Top Managers. Academy of Management Review, 9(2), 193–206. https://doi.org/10.5465/amr.1984.4277628

Hapsoro, D., & Annisa, A. A. (2017). Pengaruh Kualitas Audit, Leverage, dan Growth terhadap Praktik Manajemen Laba. Jurnal Akuntansi, 5(2), 99–110. https://doi.org/10.24964/ja.v5i2.272

Hartoko, S., & Astuti, A. A. T. (2021). Pengaruh Karakteristik Dewan Komisaris, Karakteristik Komite Audit, dan Kualitas Audit Terhadap Kualitas Laba. Jurnal Akuntansi dan Bisnis, 21(1), 126-137. https://doi.org/10.20961/jab.v21i1.658

Healy, P. M. (1985). The effect of bonus schemes on accounting decisions. Journal of Accounting and Economics, 7(1–3), 85–107. https://doi.org/10.1016/0165-4101(85)90029-1

Herlina, M. T., & Murhadi, W. R. (2020). Financial Distress Prediction Models in Property Sector Companies Listed in Indonesia Stock Exchange. The 1st International Conference on Business and Engineering Management (IConBEM 2020), 7(1), 228–234. https://doi.org/10.12962/j23546026.y2020i1.8492

Huang, H. W., Rose-Green, E., & Lee, C. C. (2012). CEO age and financial reporting quality. Accounting Horizons, 26(4), 725–740. https://doi.org/10.2308/acch-50268

Iriyadi. (2019). Prevention of Earnings Management through Audit Committee and Audit Quality in the Award-Winning and Non-Winning Companies. Journal of Accounting Research, Organization and Economics, 2(2), 155–169. https://doi.org/10.24815/jaroe.v2i2.14631

Jaggi, B., Leung, S., & Gul, F. (2009). Family control, board independence and earnings management: Evidence based on Hong Kong firms. Journal of Accounting and Public Policy, 28(4), 281–300. https://doi.org/10.1016/j.jaccpubpol.2009.06.002

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

Kasznik, R. (1999). On the Association between Voluntary Disclosure and Earnings Management. Journal of Accounting Research, 37(1), 57. https://doi.org/10.2307/2491396

Kothari, S. P., Leone, A. J., & Wasley, C. E. (2005). Performance matched discretionary accrual measures. Journal of Accounting and Economics, 39(1), 163–197. https://doi.org/10.1016/j.jacceco.2004.11.002

Kumala, R. & Siregar, S.V. (2021). Corporate social responsibility, family ownership and earnings management: the case of Indonesia. Social Responsibility Journal, Vol. 17 No. 1, pp. 69-86. https://doi.org/10.1108/SRJ-09-2016-0156

Lapointe-Antunes, P., Veenstra, K., Brown, K., & Li, H. (2021). Welcome to the Gray Zone: Shades of Honesty and Earnings Management. Journal of Business Ethics, 1-25. https://doi.org/10.1007/s10551-020-04713-z

Liang, Y., Marinovic, I., & Varas, F. (2018). The credibility of financial reporting: A reputation-based approach. Accounting Review, 93(1), 317–333. https://doi.org/10.2308/accr-51764

Markelevich, A., & Rosner, R. L. (2013). Auditor Fees and Fraud Firms. Contemporary Accounting Research, 30(4), 1590–1625. https://doi.org/10.1111/1911-3846.12013

Menicucci, E. (2020). Earnings Quality. https://doi.org/10.1007/978-3-030-36798-5

Nandini, W. (2018). Para Bos Properti yang Terjerat Kasus Hukum. Accessed from https://katadata.co.id/ariemega/infografik/5e9a55bb672be/para-bos-properti-yang-terjerat-kasus-hukum

Nguyen, L.-T. (2022). The relationship between corporate sustainability performance and earnings management: evidence from emerging East Asian economies. Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-09-2021-0302

Nguyen, T. T., Duong, C. M., & Narendran, S. (2021). CEO profile and earnings quality. Review of Quantitative Finance and Accounting, 56(3), 987–1025. https://doi.org/10.1007/s11156-020-00916-7

Peraturan Pemerintah Republik Indonesia Nomor 45 Tahun 2015 Penyelenggaraan Program Jaminan Pensiun. June 30, 2015. Lembaran Negara Republik Indonesia Tahun 2015 Nomor 155. Jakarta.

Persakis, A., & Iatridis, G. E. (2015). Earnings quality under financial crisis: A global empirical investigation. Journal of Multinational Financial Management, 30, 1–35. https://doi.org/10.1016/j.mulfin.2014.12.002

Pujiastuti, H. (2020). Pengaruh Good Corporate Governance, Kualitas Audit dan Ukuran Perusahaan terhadap Manajemen Laba (Studi Empiris Perusahaan Properti dan Real Estate Listing di Bursa Efek Indonesia). Aliansi : Jurnal Manajemen Dan Bisnis, 13(1), 27–35. https://doi.org/10.46975/aliansi.v13i1.4

Rudyanto, A., Daniswari, D., & Oktaviani, Y. (2017). Audit Firm Reputation versus Auditor Capability: Their Effect on Audit Quality in Indonesia. GATR Accounting and Finance Review, 2(4), 12–20. https://doi.org/10.35609/afr.2017.2.4(2)

Rusydi, M. (2021). The Impact of CEO Narcissism Behavior on Firm Performance through Earnings Management. ATESTASI: Jurnal Ilmiah Akuntansi, 4(1), 53–60. https://doi.org/10.33096/atestasi.v4i1.645

Saksessia, D., & Firmansyah, A. (2020). The role of corporate governance on earnings quality from positive accounting theory framework. International Journal of Scientific and Technology Research, 9(1), 808–820.

Scott, W. R. (2015). Financial Accounting Theory (7th ed.). Ontario: Pearson Prentice Hall.

Setiawan, F. A., Kurniawati, H., & Kristanto, S. B. (2020). The Influence of Women in the Board of Commissioners, CFO, and the Audit Committee on Earnings Quality. Jurnal Akuntansi, 24(2), 204. https://doi.org/10.24912/ja.v24i2.691

Setyawan, M. B., & Anggraita, V. (2017). The Effects of CEO Tenure on Earnings Management: The Role of CEO Career Origin and Affiliated Relationships. Proceedings of 6th International Accounting Conference (IAC 2017), 104-111. https://doi.org/10.2991/iac-17.2018.19

Shahab, Y., Ntim, C. G., Chengang, Y., Ullah, F., & Fosu, S. (2018). Environmental policy, environmental performance, and financial distress in China: Do top management team characteristics matter? Business Strategy and the Environment, 27(8), 1635–1652. https://doi.org/10.1002/bse.2229

Subramanyam, K. R. (2014). Financial Statement Analysis (11th ed.). New York: McGraw-Hill Education.

Sumunar, K. I., Jannah, L., & Aulia, D. (2019). CEO overconfidence, tax avoidance, and education foundation. Jurnal Akuntansi & Auditing Indonesia, 23(2), 99–105. https://doi.org/10.20885/jaai.vol23.iss2.art4

Sutrisno, P. (2019). Are Family Firm and CEO Overconfidence Important in Detecting Real Earnings Management and Firm Performance? International Journal of Business, Economics and Law, 20(5), 64–74.

Wahyuningrum, I. F. S., & Rizqi, D. M. (2019). The Effect of IFRS Convergence toward Earnings Management with Managerial Ownership as a Moderating Variable. Jurnal Dinamika Akuntansi, 11(2), 160–169. https://doi.org/10.15294/jda.v11i2.21468

Wangrow, D. B., Schepker, D. J., & Barker, V. L. (2015). Managerial Discretion: An Empirical Review and Focus on Future Research Directions. Journal of Management, 41(1), 99–135. https://doi.org/10.1177/0149206314554214

Watts, R. L., & Zimmerman, J. L. (1978). Towards a Positive Theory of the Determination of Accounting Standards. The Accounting Review, 53(1), 112–134.

Zahra, K., Khan, M. J., & Warraich, M. A. (2018). CEO Characteristics and the Probability of Financial Distress: Evidence from Pakistan. NUML International Journal of Business & Management, 13(2), 117–129.




DOI: http://dx.doi.org/10.20961/jab.v22i2.724

Jurnal Akuntansi dan Bisnis (JAB)
ISSN 1412-0852 (print), 2580-5444 (online)
Published by Accounting Study Program, Faculty of Economics and Business, Universitas Sebelas Maret, Indonesia


Creative Commons License
JAB on http://jab.fe.uns.ac.id/index.php/jab is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License

Visitor Statistic