The Effect of Asean's Corporate Governance Scorecard and Company Culture on Profit Management With Ultimate Ownership as a Moderating Variable

Dwianika, Agustine and Murwaningsari, Etty (2019) The Effect of Asean's Corporate Governance Scorecard and Company Culture on Profit Management With Ultimate Ownership as a Moderating Variable. International Journal of Business, Economics and Law, 18 (5). pp. 197-207. ISSN 2289-1552

Text THE EFFECT OF ASEAN'S CORPORATE GOVERNANCE SCORECARD AND COMPANY.pdf Download (1MB)

Abstract

Income is closely related to company profits, but companies with poor income will usually have lower stock prices. Consequently, it is important for companies to have the ability to generate profits in the future. Earnings Management (EM) is an intentional intervention in external financial reports in order to obtain some private gain. This practice is especially important at the time of issuing debentures because if earnings are inflated, investors may pay an artificially high price. This study aims corcerning about GCG and corporate culture by using 4 parameters were able to influence earnings management by using ultimate ownership as a mediator for 40 manufacturing companies listed on the Indonesian Stock Exchange during 2013- 2017 (200 year firms). To measure earnings management, current discretionary accruals were used as a proxy, based on the Stubben models (2010). Cultural are viewed from 4 perspectives (Clan, Adhrocracy, Market and Hierarchies) based on Fiordelisi and Ricci (2014); ElKelish and Hassan (2014). All of the regressions considered the fixed effects of the companies and the time series effects of the analyses. This research proves that Ultimate Ownership perfectly mediates the relationship between GCG with the Asean's Scorecard and corporate culture on earnings management. In addition, this study was measured using favorable control variables, asymmetric information, firm size, capital intensity and accrual basis. Profits have an effect on earnings management, while GCG, CLAN and HIER have no effect on earnings management. This study is expected to suggest a consideration for policy maker to concern about the role of ultimate ownership issues to control the management and decicion maker as well. Also expected to make a contribution to the investor and policy developments literature by demonstrating the impact of a ultimate ownership in a developing country. This study further contributes by providing comprehensive overview for decision-making by both companies and individuals, especially in making investment decisions related to the possibility of firm’s earnings management practises.

Item Type:	Artikel
Uncontrolled Keywords:	Revenue Management, Good Corporate Governance, Corporate Culture, Profitability, Information Asymmetry, Company Size, Capital Intensity, Accrual Based.
Subjects:	A General Works > AC Collections. Series. Collected works
Divisions:	Universitas Pembangunan Jaya
Depositing User:	Alexandro Andika
Date Deposited:	03 May 2023 03:18
Last Modified:	03 May 2023 03:18
URI:	http://eprints.upj.ac.id/id/eprint/4937

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