AN INVESTIGATION OF EARNINGS MANAGEMENT IN INDONESIAN MANUFACTURING INITIAL PUBLIC OFFERINGS
This paper examines whether the issuers of Indonesian manufacturing initial public offerings (IPOs) manage the firm's reported earnings by making income increasing discretionary accruals. The absence of market-determined prices for IPO shares prior to the offering has made issuers and underwrit...
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| Format: | Article |
| Language: | English |
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Universitas Gadjah Mada
2003-08-01
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| Series: | Gadjah Mada International Journal of Business |
| Subjects: | |
| Online Access: | https://jurnal.ugm.ac.id/gamaijb/article/view/5628 |
| _version_ | 1819042757740593152 |
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| author | Tatang Ary Gumanti |
| author_facet | Tatang Ary Gumanti |
| author_sort | Tatang Ary Gumanti |
| collection | DOAJ |
| description | This paper examines whether the issuers of Indonesian manufacturing initial public offerings (IPOs) manage the firm's reported earnings by making income increasing discretionary accruals. The absence of market-determined prices for IPO shares prior to the offering has made issuers and underwriters to use nonprice information. The test was performed on a sample of 45 IPOs that went public during the period of July1991 through December 1994. The model used in this study follows the one developed by Friedlan (1994).
The results show that there is no evidence that earnings management occurs among the sample firms. In other words, this study is unable to reject the null hypothesis that the issuers of Indonesian IPOs exercise accounting discretion that increases the reported earnings in the periods prior to the offering. In contrast, the study finds strong evidence of earnings management in the period after the offering, which could be interpreted as issuers trying to maintain the firm's performance after the offering by making income increasing discretionary accruals. |
| first_indexed | 2024-12-21T09:45:58Z |
| format | Article |
| id | doaj.art-9b41724eac0c47918b60ca52d5b87b61 |
| institution | Directory Open Access Journal |
| issn | 1411-1128 2338-7238 |
| language | English |
| last_indexed | 2024-12-21T09:45:58Z |
| publishDate | 2003-08-01 |
| publisher | Universitas Gadjah Mada |
| record_format | Article |
| series | Gadjah Mada International Journal of Business |
| spelling | doaj.art-9b41724eac0c47918b60ca52d5b87b612022-12-21T19:08:20ZengUniversitas Gadjah MadaGadjah Mada International Journal of Business1411-11282338-72382003-08-015334536210.22146/gamaijb.56284954AN INVESTIGATION OF EARNINGS MANAGEMENT IN INDONESIAN MANUFACTURING INITIAL PUBLIC OFFERINGSTatang Ary Gumanti0Master of Management, University of JemberThis paper examines whether the issuers of Indonesian manufacturing initial public offerings (IPOs) manage the firm's reported earnings by making income increasing discretionary accruals. The absence of market-determined prices for IPO shares prior to the offering has made issuers and underwriters to use nonprice information. The test was performed on a sample of 45 IPOs that went public during the period of July1991 through December 1994. The model used in this study follows the one developed by Friedlan (1994). The results show that there is no evidence that earnings management occurs among the sample firms. In other words, this study is unable to reject the null hypothesis that the issuers of Indonesian IPOs exercise accounting discretion that increases the reported earnings in the periods prior to the offering. In contrast, the study finds strong evidence of earnings management in the period after the offering, which could be interpreted as issuers trying to maintain the firm's performance after the offering by making income increasing discretionary accruals.https://jurnal.ugm.ac.id/gamaijb/article/view/5628earnings managementinitial public offeringstotal accruals and discretionary accruals |
| spellingShingle | Tatang Ary Gumanti AN INVESTIGATION OF EARNINGS MANAGEMENT IN INDONESIAN MANUFACTURING INITIAL PUBLIC OFFERINGS Gadjah Mada International Journal of Business earnings management initial public offerings total accruals and discretionary accruals |
| title | AN INVESTIGATION OF EARNINGS MANAGEMENT IN INDONESIAN MANUFACTURING INITIAL PUBLIC OFFERINGS |
| title_full | AN INVESTIGATION OF EARNINGS MANAGEMENT IN INDONESIAN MANUFACTURING INITIAL PUBLIC OFFERINGS |
| title_fullStr | AN INVESTIGATION OF EARNINGS MANAGEMENT IN INDONESIAN MANUFACTURING INITIAL PUBLIC OFFERINGS |
| title_full_unstemmed | AN INVESTIGATION OF EARNINGS MANAGEMENT IN INDONESIAN MANUFACTURING INITIAL PUBLIC OFFERINGS |
| title_short | AN INVESTIGATION OF EARNINGS MANAGEMENT IN INDONESIAN MANUFACTURING INITIAL PUBLIC OFFERINGS |
| title_sort | investigation of earnings management in indonesian manufacturing initial public offerings |
| topic | earnings management initial public offerings total accruals and discretionary accruals |
| url | https://jurnal.ugm.ac.id/gamaijb/article/view/5628 |
| work_keys_str_mv | AT tatangarygumanti aninvestigationofearningsmanagementinindonesianmanufacturinginitialpublicofferings AT tatangarygumanti investigationofearningsmanagementinindonesianmanufacturinginitialpublicofferings |