THE INFLUENCE OF BOARD OF COMMISSIONERS' CHARACTERISTICS ON EARNING MANAGEMENT (The Case of Banking Company Listed in Jakarta Stock Exchange).

(1)

FACULT)

OI

t'-(-ONONIICS

ANDAL:\S

UNI!

ERSITY

TIlESIS

THE

INILLDNCIl

OI'

BOAIID

OI

CO}lMISSIONERS'

CIIAtlr\CTERISTICS

ON

IIARNINC

\'1'\NAGEll!lNT

llhc.ne

ofBankng

Co,4

1!

I'ittttl

i

lrko

o

Sb'^

t'(hnn?!)

Accol-

l{'tlNc

DIltAlt

f

\{Dl{T

SulJnirtal nr

Dirtiil

lullillDcnr ol !ht rtqtrircm

Undcrg'iduxk

DcSrtc

i

li.onomics

tlB'1

BP.04

I 5-l l)s5

t.\D.\\C

(2)

ABSTL'ICI'

Th6 ltudy

obrL-6

about the

iallu.nu

ol

B.atd

ol

aonn^:ion!^

thatucleians

lrrh

u!, R.utLt

ofo)nnhtionos !n.,

unpositbn,4d

annual

heetihgahthe

ednih$

ahatenekt ptattirc in public bankcanpahic!

lhtel

ih

ln

lo

eiu

Stock Exchanse

in

2AU-2005

Resull

lhne

thut

Raunl

of

(\)nn^!n,ner!

_tiz!ha!

neg

itu

ienltunt

i4rcnu

oh

{thihg

dt,aao)enl

in

bakkihs canp.hr d! a ||hol. ohd ih

ldall onpun!,

Botrd oJ Conhksiohe^

a)nryit@n

i

tnsiEnilcanlr

nllucnciry

the

..tning

nturuEenent

in

all

cohdnhn!an.t

B.ait

4

hnnilsihet:

ann,al neetihshas s;gnifiLdnt neEalrta

ikiud.e

to

edkiq

hahatenent as a whole hu1

,.fond

to bc in\jshilcah!

k

hig otut snLtt Lonpary Thla ralnLs nean that bodtul af

cohhilsj.n*s

_fund

i.n

in

.,itatina a

d

sqereii,E

the eflicieaq oJ hdnuslnent does nor

hdrt

biq inJlrcace

or edrning

anaEenent _,tdctice

d.h.

bJ hanking conpan! lkted in

I ntlohe ! id Sh. k

*t

hahge

(3)

CHATTDR

I

Financial reponing

h

th. sar

ro

c.nnu.icrte

wnh

padl

.utidc

rh€

corpoEle aboullhe accountins

inlarmlton

AccountiDs inlormatior isone $nrce

oli'rtonnltion that is !!ailahle Jar investrs a.d credllo6 to cvahrarc mana8crs

.mcicncr in manasi4 lheir frrnd (Setiaqali and Na nn 2001). ln

ddsins

lhc

linancial r.pon. a.crual basis is

chos

sincc

it

is

norc

nlional and

lat

in

rcllccrins c.mpany's lindcialcondition. llo{cvcr. lh. usc olac(ualbasis coDld

gile

a lieedonr

r)

m.agcncnl

iD choosing a.counling

nelh.d

rs ldng

$

n.l

dcvialc fronr approred accounlins slandads Accoun

ie

mclhod

h cho*n b]

namgcmcdl for cdlanr objcclive This is known as caning fra.asctucnr whi.h

crn crtlre unrliablc iilornmlion.

ln Agcncr rheo.l.lhc rcLdlnrn

olrgenc!.ccur

$hen rhere is one or.rore

neople (principal) hired othcr pcople (ascnt) ro give seNices rhen delegare the

aulh.rit) to

nrlc

dccision lo the a8eDt (leNen and Mc.klnrs 1976).

Mamg(

as

superui$r

ol

the

cdfrtbr_ kn.Rs

$e

imefral inlarmation and comnant

r

prcspecr

i.

the nfure more lhan the shareholdes lhal is Nhy. naMscr has lo

Ei\r

a sisml

about

llc

condition

of

lhc

conDd!

ro

thc

oMcr.

H.wcver.

somclinic thc nrfomalion.

$hich

G Eponed,

is

nor ac.uralc

wi$

$c

ical

(4)

r\tmnetry krween!n agenr Nd principJ could

gile.

chancc lor mna8cr to do

Edning namecncnl pncticc

h6

bccn cr.dcd

i,mc

scandals

inlolling

oNc

wcllrcsFccicd comparies such as

[Dron.

wordlcon]

ard

xoox.

lD

lnd.ncsia

tlrrc

sas fimncial

s.ndal

in

public

.onp

y qni.h

is

inlolved

lindocial

ldlcncnl

naniFulalion

b]

Pl

Lippo

lbk

a.d

Pl

Kinia

Frnd

lbl

iBoediono 2005). One orthe rearon\ Rhy rbis snudion is slill exisls because rhe

hck

ol

cdr0ontc g.vcnnncc pracliccs

inpLcncnlalnr thc

dccisi.n ddking

d(.er..: .r.l .

d i

'f1'

d .J'r''Jr

1".. t. rt

d

\rnr'.1

' lndoncsia is weal (Alijolo 100.1)

Corp.nte _aoremrncc

is a

c.ncepl ro incEase conpan) perlomance

thrcugh $rperlisnrg

or

noniro.iog managemenl perfonmnce

.nd

guardnlee

madagcmcfl accounl.bilit] 10 stakeholdd bascd

on

rulcs

namcwork. lhc

oblcclivc

of

ris coDcepl is lo rchieve a company managenrm ttuispdcncy loL

the uscs

ol linrn.dl

salcncnt.

llthc

company coul,t intletoenr this concetr s)

the econo.ric\

gourh

could kccp

o

_{Aoing Lvcll logcrhcr}

rilh

conTan)

nanagcnie nansparency

rhrrisal$

going

$€lllnd

give benefit for maryside.

Corporxre govcmrnce \yslc.r

gi!.s

h

clleclive proreclion 10 conrpan) s

shkcholdcr and credn.r so thcy arc surc to _ecr

e

atprotridte rcrum ln,m the;

iDre$meDt. Corporate _soremlnce

rl$

helps to makc conducnc cDlironrncnl for

(5)

CHAPTDR V

The purlos€

of

$is

rcscdch is 1o .bsenc lhc

cor]Iure

nechanlsm

influences: Board ol C.hnissioncs'

sih

(Bocsi?€), Rosd o r Connissio.ers'

compositioD (BoCComr) and

B.dd

oi

commissioners lnnual neernrg on

cein8

nanagenrent. Tie _lDpulatio.ol lhis re€dch is banhina

conp

ylisledin

lndoncsia Slock Lxcha4e

h

200i 2005. Tbh rescdch use sirc ofcomFany as

contolli.g vdiablc lo avoid bias

h

an

lyziq

da1a. Ihe results olhypothcsn Iesl

The conclusion based on h$olhesis te{ n:

l.

Hypolhcsis

l:

lhere

is

sisnificant posilive influencc

of

dE

Bodd

of

ConnissioneE siz-e on

Ming

manasenent

Ftun th€ hytorhesis lc$, thc sienificant laluc

ol Rord

olConmissionen

sia (BoCSire) in alphalerel is0.004 < _00s(q).

co

usion:

tun

hypothesis

(HI)

is

ftjecled, which

ls

there

is

neaative

sienificanl rclalioNhip belween Bodd

of

Colmissioners' size al]d cdnnrs

2

HrTmhcsis

2i

thdc

G

a

sbnincant

nqalivc

inlluence

or

Bord

o1'

Comissioners

comFsiti.n.n

etnins mlnagenrent.

Fron $e hypothesis test. the sisnificanl valuc

ol

Board ofconnrissioneE

(6)

Ref€.€nres

Asltual, Sunn!.. Chonshensphel. Soupala, Liu, Chunlin.. ard

}iI...

C S 200-r

Ldnine ManaEcrncnl Duing Di(incr Pe ons ofcapnal Demand: Eridenc.

lom Japancsc Bank. 1nlp//wwrv.ssm com

Anandanjan. Asokan..

Ilen,

lneHrd .nd McCa h!. corenelia 1005 The IJ\e

oflo&

Loss Provisions lor l]drnrgs.

c,rilll

Nlanagenrenl and Signallin-! by usra jian Banks,bnpl&$v.ssm.c!E

Boedi.no Gidc.n

SB

?005 Kuilira\

Laba:

Studt

tcngduh

Mckanhm.

Coeorare

Govemlnce

dan

Danpak

Manajcnen

Llba

Dengan

M€nggln.kan Anrl$is

jllur ,SIIMIl

Solo

I5

16 Septlnhet 20A5

Bank

lndonesi

l99A

Srrur Klfuruatn

Dh.ksi

Bdhk

lhl.nelju

i\io

31.113/KLP/DIR

tcnl 3

tunb."tutth

t',tnyi:jhun P{nEhdpu\dn

Aktiv

Cor0eq M.M., McNult. LJ lnd Tehrafiln, llasan. 2006. corFome (;ovetu.cc

md

Larning

Uamacme.r

ar

Largc

Bmk

Holdi.g

Companies.

hllp://w

svn.con.

ChtoLro. S.M., Bedard. Jcan and Councau. l-ucie. 2001. Coryoratc Co!$mncc

a.d Elming Manlgeme.t hrlo:tq11v.sr. con

Cdrc€lb.

JV.

H.llingswonh

(lW

hd

Klei., April

2006. Audir Comtui!€e

Financi.l Fxpenisd. Conpering Govemancc Mcchanisn and Eming

Mana8emenl hlip:1,'sr1v.ssm com

rolm

lor coipontc co!cmancc in l.don.sia.2006. hupt$$y.fcsi.or.id

Hcal!, P.M.

dd

WahlcD.

LM

1999.

Rcrisw

ot

the Eamings Mamecned

L ncdurc

ed

lts lnplicalions for Stadard Setri.A

h(p:r$$$

ssm.com

Hcrilbra. Sanantha. 2001. Lirrpontc EminA N,lanagementsA Descriptivc Study.

hllpt/rrN.$m.com.

lndonesla.1001. Ltddrg-Urdd,A No. 40 falun 2007

PustojnTtthalat

Indonesian StockExchan8e website, hnp:/ $sv.idrco id

JcBcn

M.C. and jvlccklnr8. W.H.

]976.

lhcoD

ol

The

rnm:

ManaeemeDt

Bchavift. igcncy co$s turd osncship stucrue,

http:l*w

s$n.conl

Klein. April. 2006. Audit Confrnree.

Bosl

ol

Dircdor Clracr$istics.

ed