Proceedings of the 2016 Global Conference on Business, Management and Entrepreneurship

Real Activities Manipulation (RAM) and Accrual-based Earning Management Pre and Post IFRS Adoption in Indonesia

Authors
Dyah Purwanti
Corresponding Author
Dyah Purwanti
Available Online August 2016.
DOI
https://doi.org/10.2991/gcbme-16.2016.16How to use a DOI?
Keywords
abnormal cash flows, abnormal production, abnormal discretionary expenses, accrual-based earning management, discretionary accruals, earning management, IFRS adoption, Real activities manipulation (RAM)
Abstract
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.
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This is an open access article distributed under the CC BY-NC license.

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Proceedings
2016 Global Conference on Business, Management and Entrepreneurship
Part of series
Advances in Economics, Business and Management Research
Publication Date
August 2016
ISBN
978-94-6252-268-8
ISSN
2352-5428
DOI
https://doi.org/10.2991/gcbme-16.2016.16How to use a DOI?
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  -