PENGARUH MANIPULASI AKTIVITAS RIIL TERHADAP MANAJEMEN LABA BERBASIS AKRUAL PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA (BEI). SKRIPSI,.

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THE INFLUENCE OF REAL ACTIVITIES MANIPULATION ON ACCRUAL-BASED EARNINGS MANAGEMENT

(An Empirical Study at Manufacturing Companies Listed in Indonesian Stock Exchange)

A THESIS

Submitted in Partial Fulfillment of Requirements For Obtaining The Degree of Economy Bachelor

BY

RIZKA NURJANNAH Reg. No. 709220053

FACULTY OF ECONOMIC UNIVERSITAS NEGERI MEDAN

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ABSTRACT

Rizka Nurjannah. Reg. No. 709220053. The Influence of Real Activities Manipulation on Accrual-Based Earnings Management. Thesis, Program of Accounting Study, Faculty of Economic, Universitas Negeri Medan, 2013.

The question in this research is whether real activities manipulation has influence on accrual-based earnings management. The objective of this research is to find out the empirical evidence of the influence of real activities manipulation on accrual-based earnings management at manufacturing companies listed in Indonesian Stock Exchange (IDX) in year 2011.

The population in this study are all manufacturing companies listed in Indonesian Stock Exchanges in year 2011. From 136 listed companies, 122 companies selected as the samples. Data used in this research is secondary data, by collecting the financial statements of the Indonesian Stock Exchanges website on the internet site http://www.idx.co.id and data from the Indonesian Capital Market Directory. Technical data analysis used was simple regression analysis.

Results obtained with significance level α = 5%, indicating that the level of real activities manipulation has no effect on accrual-based earnings management with the p-significance value 0.757 > 0.05.

The conclusion of the research hypothesis states that the alternative hypothesis rejected. This means that real activities manipulation does not influence accrual-based earnings management at manufacturing companies listed in Indonesian Stock Exchanges.

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ABSTRAK

Rizka Nurjannah. NIM 709220053. Pengaruh Manipulasi Aktivitas Riil Terhadap Manajemen Laba Berbasis Akrual pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia (BEI). Skripsi, Program Studi Akuntansi, Fakultas Ekonomi, Universitas Negeri Medan, 2013.

Permasalahan yang dibahas dalam penelitian ini yaitu apakah manipulasi aktivitas riil berpengaruh terhadap manajemen laba berbasis akrual. Penelitian ini ditujukan untuk mengetahui bukti empiris dari pengaruh manipulasi aktivitas riil terhadap manajamen laba berbasis akrual pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia pada tahun 2011.

Populasi dalam penelitian ini adalah seluruh perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia tahun 2011. Dari 136 perusahaan yang terdaftar, dipilih 122 perusahaan sampel. Data yang digunakan dalam penelitian ini adalah data sekunder, dengan cara mengumpulkan laporan keuangan dari situs Bursa Efek Indonesia pada situs internet http://www.idx.co.id dan data dari Indonesian Capital Market Directory. Teknik analisis data yang dilakukan dengan menggunakan analisis regresi sederhana.

Hasil yang diperoleh dengan taraf signifikansi α = 5%, menunjukkan bahwa manipulasi aktivitas riil tidak memiliki pengaruh terhadap manajemen laba berbasis akrual dengan tingkat probabilitas 0,757 > 0,05.

Kesimpulan dari hasil penelitian menyatakan bahwa hipotesis alternatif ditolak. Hal ini berarti bahwa manipulasi aktivitas riil tidak mempengaruhi manajemen laba berbasis akrual pada perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia.

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TABLES

Table 2.1 The Previous Study ... 21

Table 4.1 Determination of Sample ... 36

Table 4.2 List of Selected Manufacturing Companies... 37

Table 4.3 Accrual-Based Earnings Management ... 43

Table 4.4 Real Activities Manipulation ... 47

Table 4.5 Dependent and Independent Variable in Descriptive Statistics ... 49

Table 4.6 Regression Result ... 51

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LIST OF APPENDIX

Appendix A

Result of Data Tabulation

Appendix B SPSS Result

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CHAPTER I INTRODUCTION

1.1 Background of the Study

Earnings is one of tools to measure the company’s performance which

investors and creditors give first attention because they use earnings to evaluate

managements performance. Good earnings is useful in decision making, which have

characteristics: relevance, reliability, and comparable.

One of the ways that management can do in arranging financial statements

that have effects on earnings is earnings management. Earnings management is hoped

to be able to increase firms’ value in a certain period.

As we known that earnings is one of the important things in a company and it

is used to measure the manager’s performance in a certain period, many managers try

to give a “good” earnings to the investors or shareholders to get their incentives. This

motivation pushes the managers to do earnings management. Bagnoli and Watts (in

Pudjiastuti and Mardhiyah, 2006) told that an earnings management practice is done

in many companies.

Earnings management can occur because there is a conflict of interest between

principal (owners/shareholders) and agent (management). They cannot meet their

maximum utilities because management has more information about firms than

shareholders and it causes asymmetry information that management may do

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conflict causes opportunity for managements to report unreal earnings that will cause

the firms value decrease in the future.

Gunny (2005) classified earnings management into three groups, they are:

fraud accounting, accrual-based earnings management, and real activities

manipulation. Roychowdhury (2006) and Graham et al. (2005) found that managers

prefer real activities manipulation than accrual-based earnings management since

Sarbanes-Oxley Act (SOX). According to Gunny et al. (2005), a shift from accrual

earnings management to real earnings management due to several factors. First, the

manipulation of accrual earnings management more often used as a central

observation or inspection by auditors and regulators rather than decisions about

pricing and production. Second, only focuses attention on accrual earnings

management is risky because the companies may have limited flexibility to adjust

accruals, such as limitations in reporting accruals discretionary (Graham et al. 2005).

Cohen et al. (2008), Cohen and Zarowin (2010), and also Badertscher (2011) prove

that firms make choices between real activities manipulation and accrual-based

earnings management. Zang (2012) extends research on the trade-off between real

activities manipulation and accrual-based earnings management. Zang (2012) proves

that there is direct substitution between them after the fiscal year-end due to their

sequential nature.

This thesis is replication of Zang (2012). Following Zang (2012), my study

will focus in the two strategies of earnings management: accrual-based earnings

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research method. In Zang (2012), the research used data panel and the research was

done in many range of time and in many range of data. Meanwhile, in this research,

the researcher only observes in a year to see the overall effects of earnings

management in that year. This research will focus at manufacturing companies listed

in Indonesian Stock Exchange in year 2011. Data in this research will process by

SPSS 16.

Real activities manipulation is a purposeful action to alter reported earnings in

a particular direction, which is achieved by changing the timing or structuring of an

operation, investment, or financing transactions (Zang, 2012). The idea that firms

engage in real activities manipulation is supported by the survey evidence in Graham

et al. (2005). They report that 80 percent of surveyed CFOs stated that, in order to

deliver earnings, they would decrease research and development (R&D), advertising,

and maintenance expenditures, while 55 percent said they would postpone a new

project, both of which are real activities manipulation.

Unlike real activities manipulation, which alters the execution of a real

transactions taking place during the fiscal year, accrual-based earnings management

is achieved by changing the accounting methods or estimates used when presenting a

given transaction in the financial statements (Zang, 2012). For example, changing the

depreciation method for fixed assets and the estimate for provision for doubtful

accounts can bias reported earnings in a particular direction without changing the

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The focus of this study is whether managers do real activities manipulation

during the fiscal year and accrual-based earnings management at the fiscal year-end

as substitute. This study is important because as mentioned by Fields et al. (2001),

examining only one earnings management technique at a time cannot explain the

overall effect of earnings management activities. In particular, if managers use real

activities manipulation and accrual-based earnings management as substitutes for

each other, then examining either type of earnings management activities in isolation

cannot lead to definitive conclusions. Means it is important to know whether

managers use the two techniques of earnings management and make a trade-off

among them.

Real activities manipulation must occur during the fiscal year and is realized

by the fiscal year-end, after which managers still have the chance to adjust the level

of accrual-based earnings management. This timing difference implies that manager

would adjust the latter based on the outcome of real activities manipulation. Hence,

there is direct substitution between them; if real activities manipulation turns out to

be unexpectedly high (low), then managers will decrease (increase) the amount of

accrual-based earnings management they carry out.

As we known, manufacturing company is the biggest emitent that listed in

Indonesian Stock Exchange. It means that it gives a big chance for the investors to

give their investments. Then, manufacturing companies will be the focus of investors.

In order to get many investors, there is a big opportunity for managers to do earnings

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companies. It accommodates many aspects of accounting. Means it is very easy for

managers to do earnings management.

Based on this theory, the researcher is interested to research “The Influence of Real Activities Manipulation on Accrual-Based Earnings Management (An Empirical Study at Manufacturing Companies Listed in Indonesian Stock Exchanges)”.

1.2 Problem Identifications

As related to the background of the study above, there are some identifications

of the study as follows:

1. What are the motivations of managers do earnings management?

2. What is the impact of earnings management to the investors?

3. Is there any influence of earnings management on firms’ value?

4. Do managers make trade-off the two methods of earnings-management (real

activities manipulation and accrual-based earnings management)?

1.3 Research Concentration

Considering the above identifications, the scope of this study is to find out the

empirical evidence of the influence of Real Activities Manipulation on

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1.4 Research Question

As related to the above background, the question of the study is as follows:

Is there any influence of Real Activities Manipulation on Accrual-Based Earnings

Management (An Empirical Study at Manufacturing Companies Listed in Indonesian

Stock Exchanges)?

1.5 The Objective of Research

The objective of the research is to find out the empirical evidence of the

influence of Real Activities Manipulation on Accrual-Based Earnings Management at

manufacturing companies listed in Indonesian Stock Exchanges (IDX) in year 2011.

1.6 Research Contributions

The contributions of the study are as follows:

a. For Researcher:

This research provides a new knowledge to researcher related to earnings

management.

b. For Academics:

This research provides a new paradigm for students in studying earnings

management, especially the two techniques of earnings management: Real

Activities Manipulation and Accrual-Based Earnings Management.

c. For Next Researchers:

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CHAPTER V

CONCLUSION AND SUGGESTION

5.1 Conclusion

From research analysis and discussion which has been elaborated before and

based on data obtained from research as which has been discussed in this thesis, the

conclusion is based on the regression test, hypothesis test rejects Ha (0.757>0.05).

Means Real Activities Manipulation has no influence on Accrual-Based Earnings

Management.

5.2 Suggestion

Based on conclusions explained before and research findings, hence submitted

suggestions as follows.

1. Researcher suggests next researcher to expand the sample where the sample is

not limited at manufacturing companies but also expanding the sample all of

companies that listed in Indonesia Stock Exchange.

2. Researcher recommend next researcher to use more variables to find out the

influence on Accrual-Based Earnings Management and a range of data time

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PENGARUH MANIPULASI AKTIVITAS RIIL TERHADAP MANAJEMEN LABA BERBASIS AKRUAL PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA (BEI). SKRIPSI,.

CONTENTS

TABLES

LIST OF APPENDIX

REFERENCES