Real Activities Manipulation (RAM) and Accrual-based Earning Management Pre and Post IFRS Adoption in Indonesia
- Dyah Purwanti
- Corresponding Author
- Dyah Purwanti
Available Online August 2016.
- https://doi.org/10.2991/gcbme-16.2016.16How to use a DOI?
- abnormal cash flows, abnormal production, abnormal discretionary expenses, accrual-based earning management, discretionary accruals, earning management, IFRS adoption, Real activities manipulation (RAM)
- The purpose of this study is to investigate the impact of the adoption of International Financial Reporting Standards (IFRS) on accrual-based earnings management (EM) and real activities manipulations (RAM). The research is motivated by the fact that past studies have indicated the existence of no significance levels of earning management for Indonesia in particular before IFRS. We used t-test paired sample and regression analysis, and used sample of manufacturing companies listed in the Indonesia Stock Exchange, in the timeframe 2010-2014. We find evidence statistically significant shift from accrual-based earning management to RAM after the adoption of IFRS, indicating the replacement of one form of earning management with the other. Another result of this study is the accrual-based earnings management practices statistically significant differ (downward) in the period pre and post the adoption of IFRS, while RAM practices significantly differ (upward) between period pre and post the adoption of IFRS, and except RAM measured by abnormal CFO. While the results of two other RAM was measured by abnormal production and abnormal discretionary expense differ significantly (upward) in the period after the adoption of IFRS.
- Open Access
- This is an open access article distributed under the CC BY-NC license.
Cite this article
TY - CONF AU - Dyah Purwanti PY - 2016/08 DA - 2016/08 TI - Real Activities Manipulation (RAM) and Accrual-based Earning Management Pre and Post IFRS Adoption in Indonesia BT - 2016 Global Conference on Business, Management and Entrepreneurship PB - Atlantis Press SN - 2352-5428 UR - https://doi.org/10.2991/gcbme-16.2016.16 DO - https://doi.org/10.2991/gcbme-16.2016.16 ID - Purwanti2016/08 ER -