By
Ardaniel Fachrulrazi 11609001
BACHELOR’S DEGREE in
ACCOUNTING
FACULTY OF BUSINESS AND COMUNICATION
SWISS GERMAN UNIVERSITY The Prominence Tower
Jalan Jalur Sutera Barat No. 15, Alam Sutera Tangerang, Banten 15143 - Indonesia
July 2020
Revision After Thesis Defense 6 July 2020
Ardaniel Fachrulrazi STATEMENT BY THE AUTHOR
I hereby declare that this submission is my own work and to the best of my knowledge, it contains no material previously published or written by another person, nor material which to a substantial extent has been accepted for the award of any other degree or diploma at any educational institution, except where due acknowledgement is made in the thesis.
Ardaniel Fachrulrazi
_____________________________________________
Student Date
Approved by:
Alfiandri MAcc., CA.
_____________________________________________
Thesis Advisor Date
Ir. Nurdayadi, MSc.
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Thesis Co-Advisor Date
Dr. Nila K. Hidayat, SE., MM
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Dean Date
Ardaniel Fachrulrazi This work will identify the impact of earnings management towards return on asset and market value in the companies. With the earnings management indicator as total accrual with balance sheet and cash flow approach. Also the auditor size and financial leverage as control variable. In this study use quantitative method that is causal (causal relationship). The selection of the sample is done using the purposive sampling method, which is a method of sampling adapted to specific criteria. The criteria that used for sample of the study are the Real estate and Property Company that has been listed in the Indonesian stock exchange that provide financial report for the period 2015 until 2018. The result is The analysis showed that Total Accruals (Balance Sheet Approach) had a negative and significant effect on Return on Assets, Total Accruals (Cash Flow Approach) also has a negative and significant effect on Return on Assets, Total Accruals (Balance Sheet Approach) has a negative and significant effect on Market Value, and The Total Accruals (Cash Flow Approach) also has a negative and significant effect on Market Value
Keywords : Earnings Management, Balance Sheet Approach, Cash Flow Approach, Return on Asset, Market Value, Auditor Size, Financial Leverage
Ardaniel Fachrulrazi
© Copyright 2020 by Ardaniel Fachrulrazi
All rights reserved
Ardaniel Fachrulrazi DEDICATION
I dedicate this thesis to my family who have filled my life with so much happiness that a lifetime is not enough to enjoy it all. Thank you for all the love and affection
that my family has gave to me
Ardaniel Fachrulrazi ACKNOWLEDGEMENTS
All gratitude and praises to Allah SWT, God the Most loving and Most merciful. For your destiny I can be a person who thinks, has knowledge, has faith and is patient.
May this success be the first step for my future, in achieving my goal.
Gratitude to my family, my mother, my father and my little sister who have guided me, raised me, and supported me well and always gave my best
Special thanks to my thesis advisor, Mr. Alfiandri, I am very grateful for your patience, guidance, and support during this process. Thank you for being a mentor who is always patient with me and continues to support and remind me of the thesis. I will never forget the help and support that Mr. Alfiandri gave to me for almost 4 years of my university life.
Special thanks also to all other accounting lecturers, Mr.Nurdayadi, Mr.Alfiandri, Mr.
Indra, Ms. Imelda, Ms. Neneng, Ms. Sumini and other lecturers who taught me during my college activity, because it gave me the opportunity to study under them. It was an unforgettable experience to learn from them, they were really patient in teaching me and made sure that I understood about the material
Lastly, Thank you to all my classmates from 2016 for all the fun, problems, experiences and lessons we've been through together for almost the last 4 years
Ardaniel Fachrulrazi TABLE OF CONTENTS
Page
STATEMENT BY THE AUTHOR ... 2
ABSTRACT ... 3
DEDICATION ... 5
ACKNOWLEDGEMENTS ... 6
TABLE OF CONTENTS ... 7
LIST OF FIGURES ... 8
LIST OF TABLES... 9
CHAPTER 1 - INTRODUCTION ... 11
1.1 Background ... 11
1.2 Research Problems ... 17
1.3 Research Objectives ... 17
1.4 Reseach Questions……….17
1.5 Significant of Study………...17
CHAPTER 2 – LITERATURE REVIEW ... 18
2.2 The Earnings Management………17
2.3 Earnings Management Motivation………18
2.4 Factor That Caused Earnings Management………...19
2.5 Earnings Management Towards Return on Asset……….19
2.6 Earnings Management Towards Market Value……….19
2.7 Earnings Management Indicator………...21
2.8 Practice of Earnings Management in Property Industry………...……24
2.9 Previous Studies ... 27
CHAPTER 3 – RESEARCH METHODS ... 31
3.2 Type of Study ... 31
3.3 Sampling Procedure ... 31
3.4 Data Collection………..31
3.5 Measurement of Variable………..32
3.6 Data Analysis………34
3.6.1 Multiple Linear Regression Analysis………...34
3.6.2 Classic Assumption Test………..35
3.6.3 Hypothesis Testing………...36
3.6.4 Conceptual Framework………38
CHAPTER 4 – RESULTS AND DISCUSSIONS ... 39
4.1 Introduction………..39
Ardaniel Fachrulrazi
4.2.1 Data Processing………40
4.2.2 Data Analysis………...41
4.2.3 Classical Assumption………...42
4.2.4 Statistical Testing……….48
4.3 Result and Analysis ... 49
CHAPTER 5 – CONCLUSION AND RECCOMENDATIONS ... 56
5.1 Conclusion ... 56
5.2 Limitations ... 57
5.3 Recommendation………...57
GLOSSARY ... 59
REFERENCES ... 60
APPENDICES……….65
CURRICULUM VITAE ... 73
Ardaniel Fachrulrazi LIST OF FIGURES
Figures Page
1. Conceptual Framework……….38
Ardaniel Fachrulrazi LIST OF TABLES
Table Page
1. Previous Study ... 28
2. Sample With Withdrawal Procedure………. ... 39
3. Descriptive Analysis ... 41
4. Normality Test Results ... 42
5. Multicollinearity Test Results………..43
6. Autocorrelation Test Results………44
7. Heteroscedasticity Test Results………44
8. Multiple Linear Regression For ROA………..45
9. Multiple Linear Regression For Market Value………46
10.Goodness Test of Fit….………..47
11. T-Test Result for ROA and Market Value...………..48
12 List of Company……….65
13. Result of ROA………...65
14. Result of Financial Leverage……….66
15. Result of Market Value………..67
16 Result of Balance Sheet Approach……….67
17. Result of Cash Flow Approach………..68
18. Detail Result of Multiple Linear Regression for ROA……….69
19. Detail Result of Multiple Linear Regression for Market Value………70
20. Classical Assumption Testing for ROA………71
21. Classical Assumption Testing for Market Value………..72
