Do distressed firms manage earnings?
Purpose: This research aims to test and analyze whether the central role of SOE compare with the phenomenon of financial distress will result in dysfunctional behavior. This motivates researchers to investigate SOE financial performance and behavior. Thus, this study aims to prove that the influenc...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Universitas Islam Indonesia
2021-06-01
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| Series: | Jurnal Siasat Bisnis |
| Subjects: | |
| Online Access: | https://journal.uii.ac.id/JSB/article/view/17261 |
| _version_ | 1811254984593899520 |
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| author | Dian Anita Nuswantara Warih Puspo Andjani |
| author_facet | Dian Anita Nuswantara Warih Puspo Andjani |
| author_sort | Dian Anita Nuswantara |
| collection | DOAJ |
| description |
Purpose: This research aims to test and analyze whether the central role of SOE compare with the phenomenon of financial distress will result in dysfunctional behavior. This motivates researchers to investigate SOE financial performance and behavior. Thus, this study aims to prove that the influence of financial distress on SOE and POE behavior is different.
Design/methodology/approach: The researcher employs a quantitative approach to test the hypotheses. The data collected using documentation of financial data of 55 SOE and 135 POE listed in Indonesia Stock Exchange year 2014-2018. Distress status determines using Altman Z-score and earnings management measured using the Modified Jones Model. This study examines two groups of samples originating to test hypotheses using two independent sample t-tests.
Findings: The research results succeeded in proving that SOE and POE react to a distressing condition in different ways. While SOE responds in the increasing pattern, means income maximization, the POE were in the opposite direction.
Research limitations/implications: Scoring bankrupt prediction use only one equation, that is Altman Z-score, thus there are bias potential due to “no one-size-fits-all” view point.
Practical implications: This result suggests that the government and other shareholders should be careful in making decisions concerning distressed SOE.
Originality/value: Most earnings study was conducted in good financial performance in order to get a general conclusion. Since other scholars focus on how SOE performance in a “normal” situation, this research tries to investigate their behavior in the “abnormal situation. |
| first_indexed | 2024-04-12T17:15:56Z |
| format | Article |
| id | doaj.art-6b1d329bca414aecbd906465aa4c0a2e |
| institution | Directory Open Access Journal |
| issn | 0853-7666 2528-7001 |
| language | English |
| last_indexed | 2024-04-12T17:15:56Z |
| publishDate | 2021-06-01 |
| publisher | Universitas Islam Indonesia |
| record_format | Article |
| series | Jurnal Siasat Bisnis |
| spelling | doaj.art-6b1d329bca414aecbd906465aa4c0a2e2022-12-22T03:23:38ZengUniversitas Islam IndonesiaJurnal Siasat Bisnis0853-76662528-70012021-06-0125210673Do distressed firms manage earnings?Dian Anita Nuswantara0Warih Puspo Andjani1Faculty of Economics and Business, Universitas Negeri Surabaya, Surabaya, IndonesiaFaculty of Economics and Business, Universitas Negeri Surabaya, Surabaya, Indonesia Purpose: This research aims to test and analyze whether the central role of SOE compare with the phenomenon of financial distress will result in dysfunctional behavior. This motivates researchers to investigate SOE financial performance and behavior. Thus, this study aims to prove that the influence of financial distress on SOE and POE behavior is different. Design/methodology/approach: The researcher employs a quantitative approach to test the hypotheses. The data collected using documentation of financial data of 55 SOE and 135 POE listed in Indonesia Stock Exchange year 2014-2018. Distress status determines using Altman Z-score and earnings management measured using the Modified Jones Model. This study examines two groups of samples originating to test hypotheses using two independent sample t-tests. Findings: The research results succeeded in proving that SOE and POE react to a distressing condition in different ways. While SOE responds in the increasing pattern, means income maximization, the POE were in the opposite direction. Research limitations/implications: Scoring bankrupt prediction use only one equation, that is Altman Z-score, thus there are bias potential due to “no one-size-fits-all” view point. Practical implications: This result suggests that the government and other shareholders should be careful in making decisions concerning distressed SOE. Originality/value: Most earnings study was conducted in good financial performance in order to get a general conclusion. Since other scholars focus on how SOE performance in a “normal” situation, this research tries to investigate their behavior in the “abnormal situation.https://journal.uii.ac.id/JSB/article/view/17261Distressed-SOEdistressed-POEfinancial behaviorearnings managementAltman Z-Score |
| spellingShingle | Dian Anita Nuswantara Warih Puspo Andjani Do distressed firms manage earnings? Jurnal Siasat Bisnis Distressed-SOE distressed-POE financial behavior earnings management Altman Z-Score |
| title | Do distressed firms manage earnings? |
| title_full | Do distressed firms manage earnings? |
| title_fullStr | Do distressed firms manage earnings? |
| title_full_unstemmed | Do distressed firms manage earnings? |
| title_short | Do distressed firms manage earnings? |
| title_sort | do distressed firms manage earnings |
| topic | Distressed-SOE distressed-POE financial behavior earnings management Altman Z-Score |
| url | https://journal.uii.ac.id/JSB/article/view/17261 |
| work_keys_str_mv | AT diananitanuswantara dodistressedfirmsmanageearnings AT warihpuspoandjani dodistressedfirmsmanageearnings |