Article Sidebar

Download
PDF
Statistic
Read Counter : 557 Download : 453

Main Article Content

Abstract

This research aims to offer empirical insights into variations in earnings management within companies categorized in the Environmental, Social, and Governance (ESG) score ranking, and seeks to establish a correlation between earnings management practices and Environmental, Social, and Governance (ESG) performance. The study scrutinizes accrual earnings management alongside real earnings management. The Environmental, Social, and Governance (ESG) score ranking comprises four categories: low, medium, high, and severe. Accrual earnings management is gauged through the modified Jones model, while real earnings management is assessed using three proxies ABNCFO, ABNPROD, and ABNDISC. The research focuses on manufacturing companies possessing Environmental, Social, and Governance (ESG) scores and adopts a purposive sampling approach. The outcomes reveal distinctions between ABNCFO and ABNPROD real earnings management in the severe and low ESG rating groups, whereas no differences exist in accrual earnings management and ABNPROD real earnings management. Additionally, the study establishes that ABNCFO and ABNDISC real earnings management significantly influence Environmental, Social, and Governance (ESG) performance positively. Conversely, accrual earnings management shows no adverse impact on Environmental, Social, and Governance (ESG) performance, and ABNPROD real earnings management exhibits a positive albeit insignificant effect on Environmental, Social, and Governance (ESG) performance.  The practical implication of this research is that when the company has a high ESG score which reflects the uncertainty of the company's future operations, the company tends to carry out real earnings management in the form of abnormal cash flow operations (ABNCFO) and abnormal discretionary expenses (ABNDISC).

Keywords

Accrual Earnings Management Real Earnings Management Enviromental Social Governance

Article Details

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Fadhilah, A. N., & Suranta, E. (2023). The Effect of Accrual Earnings Management and Real Earnings Management on Environmental, Social, and Governance (ESG) Reporting Performance. Ilomata International Journal of Tax and Accounting, 5(1), 77-96. https://doi.org/10.52728/ijtc.v5i1.1001

References

  1. Adams, M. B. (1994). Agency Theory and the Internal Audit. Managerial Auditing Journal, 9(8), 8–12. https://doi.org/10.1108/02686909410071133
  2. Almubarak, W. I., Chebbi, K., & Ammer, M. A. (2023). Unveiling the Connection among ESG, Earnings Management, and Financial Distress: Insights from an Emerging Market. In Sustainability (Switzerland) (Vol. 15, Issue 16). mdpi.com. https://doi.org/10.3390/su151612348
  3. Amertha, I. S. P. (2013). Pengaruh Return On Asset Pada Praktik Manajemen Laba dengan Moderasi Corporate Governance. E-Jurnal Akuntansi Universitas Udayana, 4(2), 373–387.
  4. Andriani, N., & Arsjah, R. J. (2022). Pengaruh Intellectual Capital Dan Esg Terhadap Manajemen Laba Yang Dimoderasi Oleh Profitabilitas. Jurnal Ekonomi Trisakti, 2(2), 595–610. https://doi.org/10.25105/jet.v2i2.14646
  5. Araújo Mendes, C., Lima Rodrigues, L., & Parte Esteban, L. (2012). Evidence of earnings management using accruals as a measure of accounting discretion. Tékhne - Review of Applied Management Studies, 10(1), 3–14.
  6. Arbi, P. M., Cheisviyanny, C., & Septiari, D. (2022). Pengaruh Manajemen Laba Riil terhadap Audit Fee: Studi Empiris pada Perusahaan yang Terdaftar di Bursa Efek Indonesia Tahun 2015-2019. Jurnal Eksplorasi Akuntansi, 4(3), 598–610. https://doi.org/10.24036/jea.v4i3.542
  7. Chouaibi, Y., & Zouari, G. (2022). The mediating role of real earnings management in the relationship between CSR practices and cost of equity: evidence from European ESG data. EuroMed Journal of Business. https://doi.org/10.1108/EMJB-12-2021-0183
  8. Donaldson, L., & Davis, J. H. (1991). Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns. Australian Journal of Management, 16(1), 49–64. https://doi.org/10.1177/031289629101600103
  9. Farha, H. M., Surbakti, L. P., & Praptiningsih, P. (2022). Perspektif Lingkungan dan Real Earnings Management: Pembuktian pada Perusahaan Non-Keuangan di Indonesia. Journal of Economic, Management, Accounting and Technology, 5(1), 56–69. https://doi.org/10.32500/jematech.v5i1.1978
  10. Febry Antonius, I. I. (2023). PENGARUH ENVIRONMENTAL , SOCIAL , GOVERNANCE ( ESG ) DAN INTELLECTUAL CAPITAL TERHADAP KINERJA PERUSAHAAN. 13, 126–138.
  11. Ghazali, A., & Zulmaita. (2020). Pengaruh pengungkapan environmental, social, and governance (ESG) terhadap tingkat profitabilitas perusahaan (studi empiris pada perusahaan sektor infrastruktur yang terdaftar di bursa efek Indoneisa. Prosiding SNAM PNJ, 1–13.
  12. Gustin Ningwati, Ratna Septiyanti, N. D. (2022). Pengaruh Environment, Social and Governance Disclosure terhadap Kinerja Perusahaan. Goodwood Akuntansi Dan Auditing Reviu, 1(1), 67–78. https://doi.org/10.35912/gaar.v1i1.1500
  13. Hapsoro, D., & Bahantwelu, M. I. (2020). Does earning management mediate the effect of capital structure on company value? Jurnal Ekonomi Dan Bisnis, 23(1), 53–68. https://doi.org/10.24914/jeb.v23i1.2531
  14. Herlina Wijayanti, S. A. I. (2014). The effect of real earnings management through operating cash flow approach on company performance. The Indonesian Accounting Review, 4(01), 43. https://doi.org/10.14414/tiar.v4i01.283
  15. Husada, E. V., & Handayani, S. (2021). Pengaruh Pengungkapan Esg Terhadap Kinerja Keuangan Perusahaan (Studi Empiris Pada Perusahaan Sektor Keuangan Yang Terdaftar Di Bei Periode 2017-2019). Jurnal Bina Akuntansi, 8(2), 122–144. https://doi.org/10.52859/jba.v8i2.173
  16. Ida, A., & Magdelena, S. E. D. (2020). Analisis Pengaruh Umur Perusahaan (Age), Ukuran Perusahaan (Size) Dan Kepemilikan Institusional Terhadap Corporate Social Responsibility (CSR).
  17. Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
  18. Junius, D., Adisurjo, A., Rijanto, Y. A., & Adelina, Y. E. (2020). The Impact of ESG Performance to Firm Performance. Jurnal Aplikasi Akuntansi, 5(1), 21–41.
  19. Karin, Kusgianto, E., & Jogi, Y. (2016). The Effect of Information Asymmetry on Earnings Management with Corporate Governance as Moderating Variable. Bussines Accounting Review, 2000, 121–131.
  20. Khuong, N. V., Ly, H. T. N., & Anh, L. H. T. (2023). Accrual-based, real activities earnings management and corporate social responsibility: A virtuous circle? emerging market evidence. Cogent Economics and Finance, 11(1). https://doi.org/10.1080/23322039.2023.2209955
  21. Lestari, T., Suranta, E., & Midiastuty, P. P. (2020). Pengaruh siklus hidup perusahaan terhadap penghindaran pajak dengan manajemen laba sebagai variabel intervening. Jurnal Akuntansi Keuangan Dan Manajemen, 1(3), 169–180. https://doi.org/10.35912/jakman.v1i3.20
  22. Li, T. T., Wang, K., Sueyoshi, T., & Wang, D. D. (2021). ESG: Research progress and future prospects. Sustainability (Switzerland), 13(21). https://doi.org/10.3390/su132111663
  23. Lubis, M. F. F., & Rokhim, R. (2021a). The Effect of Environmental, Social, and Governance (ESG) Disclosure and Competitive Advantage on Companies Performance as An Implementation of Sustainable Economic Growth in Indonesia for Period of 2015-2019. IOP Conference Series: Earth and Environmental Science, 940(1). https://doi.org/10.1088/1755-1315/940/1/012059
  24. Lubis, M. F. F., & Rokhim, R. (2021b). The Effect of Environmental, Social, and Governance (ESG) Disclosure and Competitive Advantage on Companies Performance as An Implementation of Sustainable Economic Growth in Indonesia for Period of 2015-2019. IOP Conference Series: Earth and Environmental Science, 940(1). https://doi.org/10.1088/1755-1315/940/1/012059
  25. Marietza, F., Wijayanti, I. O., & Agusrina, M. (2020). Pengaruh Good Corporate Governance Dan Reporting Lag Terhadap Kinerja Keuangan Perusahaan (Studi Empiris Pada Perusahaan Yang Terdaftar Di Bursa Efek Indonesia Periode 2012-2016). Jurnal Riset Terapan Akuntansi, 4(2), 109–129.
  26. Martha, H., & Khomsiyah, K. (2023). the Effects of Environmental, Social, and Governance (Esg) on Corporate Performance. Jurnal Ilmiah Bisnis Dan Ekonomi Asia, 17(1), 112–120. https://doi.org/10.32815/jibeka.v17i1.1380
  27. Nabilah Nurdiati, Dewi Susilowati, H. R. (2020). The Effect of Environmental, Social, Governance (ESG) Disclosure on Corporate Performance. Diponegoro Journal Of Accounting, 9(3), 1–11.
  28. Nansi Ria Nandita, Saiful, I. C. (2017). PENGUNGKAPAN CSR PADA HUBUNGAN PROFITABILITAS DAN STUKTUR KEPEMILIKAN TERHADAP NILAI PERUSAHAAN. Jurnal Fairness, Volume 7(2), 151–160. https://doi.org/https://doi.org/10.33369/fairness.v7i2.15154
  29. Ningsih, S., & Wiyadi. (2012). Praktek Manajemen Laba Riil Pada Di Indonesia. Daya Saing Jurnal Ekonomi Manajemen Sumber Daya, 13(2), 96–107.
  30. Nollet, J., Filis, G., & Mitrokostas, E. (2016). Corporate social responsibility and financial performance: A non-linear and disaggregated approach. Economic Modelling, 52, 400–407. https://doi.org/10.1016/j.econmod.2015.09.019
  31. Pertiwi, L. R. B., & Hersugondo. (2023). PENGARUH KINERJA ENVIRONMENTAL , SOCIAL , GOVERNANCE ( ESG ) TERHADAP KINERJA PERUSAHAAN DENGAN KENDALA KEUANGAN SEBAGAI VARIABEL MODERASI ( Studi pada Perusahaan Manufaktur yang terdaftar di Bursa Efek Indonesia tahun 2016-2020 ). Diponegoro Journal of Management, 12, 1–11.
  32. Roychowdhury, S. (2006a). Earnings management through real activities manipulation. Journal of Accounting and Economics, 42(3), 335–370. https://doi.org/10.1016/j.jacceco.2006.01.002
  33. Roychowdhury, S. (2006b). Earnings management through real activities manipulation. Journal of Accounting and Economics, 42(3), 335–370. https://doi.org/10.1016/j.jacceco.2006.01.002
  34. Ruan, L., & Liu, H. (2021). Environmental, social, governance activities and firm performance: evidence from China. Sustainability (Switzerland), 13(2), 1–16. https://doi.org/10.3390/su13020767
  35. Sabrina, O. Z., Fachruzzaman, Midiastuty, P. P., & Suranta, E. (2020). Pengaruh Koneksitas Organ Corporate Governance, Inneffective Monitoring dan Manajemen Laba Terhadap Fraudulent Financial Reporting (The Effect of Corporate Governance, Ineffective Monitoring and Earnings Management Concept On Fraudulent Financial Reportin. Jurnal Akuntansi Keuangan Dan Manajemen, 1(2), 109–122.
  36. Septiadi, I., Robiansyah, A., & Suranta, E. (2017). PENGARUH MANAJEMEN LABA, CORPORATE GOVERNANCE, DAN CORPORATE SOCIAL RESPONSIBILITY TERHADAP TAX AVOIDANCE. JOURNAL OF APPLIED MANAGERIAL ACCOUNTING, 1(2), 114–133. https://doi.org/10.30871/jama.v1i2.502
  37. Simamora, A. J. (2021). Managerial Ability, Real Earnings Management, and Earnings Quality. Journal of Financial and Behavioural Accounting, 1(1), 1–28. https://doi.org/10.33830/jfba.v1i1.001.2021
  38. Suhesti, N. (2015). Earning Management Melalui Aktivitas Riil dan Akrual. Jurnal Akuntansi Dan Pajak, 16(1), 55–66.
  39. Sunarto. (2009). TEORI KEAGENAN DAN MANAJEMEN LABA. 1(1), 13–28.
  40. Suranta, E., Midiastuty, P. P., Nikmah, N., & Andina, A. S. (2010). Earnings Management At Public Companies With Employee Stock Ownership Program (Esop). Journal of Economics, Business, and Accountancy | Ventura, 13(2), 153. https://doi.org/10.14414/jebav.v13i2.413
  41. Susanto, Y. K. (2017). Accrual Earnings Management, Real Earnings Management, and Firm Value. International Journal of Business, Economics, Economics and Law, 14(1), 1–6.
  42. Syahrani, T. (2021). Pengaruh Profitabilitas, Kualitas Audit, Nilai Perusahaan, Dewan Komisaris Independen Dan Ukuran Dewan Komisaris Terhadap Manajemen Laba Perusahaan Manufaktur Yang Terdaftar Di Bei. Jurnal Fairness, 9(1), 45–58. https://doi.org/10.33369/fairness.v9i1.15221
  43. Tao, J. (2023). Study on the impact of ESG performance on firm performance. SHS Web of Conferences, 165, 01016. https://doi.org/10.1051/shsconf/202316501016
  44. Trabelsi, S., & Chalwati, A. (2023). Poison pills adoption, real earnings management and IPO failure. China Accounting and Finance Review, 25(4), 513–539. https://doi.org/10.1108/cafr-04-2023-0041
  45. Trisnawati, R., & Suhestiningsih. (2012). THE REAL EARNINGS MANAGEMENT PRACTICES (The comparative studies between shariah index (JII) and conventional index (LQ-45) in Indonesian stock exchange during 2004-2010 period)*. PROCEEDINGS Malaysia-Indonesia International Conference in Economics, Management and Accounting (MIICEMA), October 18th-20th ,Palembang Indonesia, 2012.
  46. VAKILIFARD, H., & MORTAZAVI, M. S. S. (2016). The Impact of Financial Leverage on Accrual-Based and Real Earnings Management. International Journal of Academic Research in Accounting, Finance and Management Sciences, 6(2), 53–60. https://doi.org/10.6007/ijarafms/v6-i2/2039
  47. Velte, P. (2019). The bidirectional relationship between ESG performance and earnings management – empirical evidence from Germany. Journal of Global Responsibility, 10(4), 322–338. https://doi.org/10.1108/JGR-01-2019-0001
  48. Vincentia Anindha Primacintya, I. W. K. (2023). PENGARUH KINERJA ENVIRONMENTAL, SOCIAL, AND GOVERNANCE TERHADAP MANAJEMEN LABA DENGAN KERAGAMAN GENDER PADA DEWAN KOMISARIS SEBAGAI VARIABEL PEMODERASI Tesis Untuk memenuhi Sebagian Persyaratan Mencapai Derajat Sarjana S2 Prodi Studi Magister Akuntansi. Universitas Gajah Mada.
  49. Yanti, V. L. S. H. W. (2020). Mendeteksi Earnings Management Perusahaan Melalui Aktivitas RIIL. Jurnal Ekonomi, 25(1), 66. https://doi.org/10.24912/je.v25i1.627
  50. Yuniatmoko, I. (2018). Pendeteksian Manajemen Laba Riil Pada Perusahaan Publik Di Indonesia Yang Melakukan Right Issue. 1.

Most read articles by the same author(s)