INVESTOR PROTECTION AFFECT THE CHOICE OF EARNINGS MANAGEMENT METHOD (EARNINGS MANAGEMENT WITH REAL ACTIVITY): INDONESIA AND MALAYSIA EMPIRICAL COMPARISON

Sari , Ratna Candra and Warsono, Sony and Suryaningsum, Sri (2009) INVESTOR PROTECTION AFFECT THE CHOICE OF EARNINGS MANAGEMENT METHOD (EARNINGS MANAGEMENT WITH REAL ACTIVITY): INDONESIA AND MALAYSIA EMPIRICAL COMPARISON. BULETIN EKONOMI, 7 (1). pp. 1-130. ISSN 1410-2293

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Abstract

Makalah ini membahas pilihan dalam metode manajemen laba di Malaysia dan Indonesia dengan perbandingan empiris. Metode manajemen laba adalah kegiatan nyata dan akrual. Kecenderungan untuk perlindungan investor tinggi digunakan manajemen laba dengan metode kegiatan nyata. Malaysia adalah perlindungan investor tinggi dan Indonesia adalah perlindungan investor yang lebih rendah. Makalah ini membahas perbedaan sistematis dalam manajemen laba melalui aktivitas nyata di negara Malaysia dan Indonesia. Kami mengusulkan argumen diperiksa bahwa dalam ekonomi dengan perlindungan investor tinggi, manajer lebih memilih untuk mengelola laba melalui manipulasi aktivitas nyata daripada melalui manipulasi akrual karena manipulasi akrual lebih mungkin untuk menarik auditor atau pengawasan regulator daripada keputusan-keputusan tentang harga dan produksi. Temuan kami ini konsisten dengan prediksi kita. Meskipun dalam ekonomi dengan perlindungan investor tinggi, manajer masih memiliki keleluasaan lebih besar dalam mengelola pendapatan melalui kegiatan nyata daripada manipulasi akrual. Kata kunci: manajemen laba, manipulasi aktivitas nyata, perlindungan investor INTRODUCTION This paper focuses on investor protection as a significant determinant of earnings management activity in Malaysia and Indonesia. Leuz (2003) argues that strong and well- enforced outsider rights limit insiders’ acquisition of private control benefits, and consequently, mitigate insiders’ incentives to manage accounting earnings because they have little to conceal from outsiders. This insight suggests that the pervasiveness of earnings management is increasing in private control benefits and decreasing in outside investor protection in Malaysia and Indonesia. This study focuses in Malaysia and Indonesia countries to make contributing to the future of our society. So, in Malaysia and Indonesia by expanding its range of the responsibilities through legal enforcement too. Investor protection in order to enhance economic development, mutual understanding and cooperation in Malaysia and Indonesia. Malaysia and Indonesia provide a useful setting for testing the importance of investor protection. Malaysis have accounting standards that are generally viewed as high-quality, but not Indonesia. Indonesia have institutional structures that give preparers incentives to issue 1 Dosen Universitas Negeri Yogyakarta 2 Dosen Universitas Gadjah Mada Yogyakarta 3 Dosen Jurusan Akuntansi Fakultas Ekonomi Universitas Pembangunan Nasional “Veteran” Yogyakarta, email: suryaningsumsri@yahoo.com Buletin Ekonomi Vol. 7, No. 1, April 2009 hal 1-130 1

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