AUTHOR:
DEWI SAPTANTINAH PUJI ASTUTI
Universitas Slamet Riyadi Surakarta
ABSTRACT:
This research is aimed at analysing factors influencing the motivation of management to conduct earnings management activity around the timing of right issue, and investigatingwhether there are any differences between discretionary accruals before and after the right issue, that is the discretionary accruals tend to be high before the right issue than that of after the right issue. Some factors influencing the motivation of earnings management used in this research are ownership structures, consisted of institutional ownership, managerial ownership, leverage and size; in this research size was included into controlled variable and earnings management was substituted (proxy) with discretionary accruals.
The sample of this research consists of companies conducting the right issue between the year of 1998-2001, with 2 years observation period before and after the right issue. Therefore, the period included in this research is 1996-2003. Hypothesis testing is conducted using regression, while pair t-test is used to investigate the differences of discretionary accruals before and after the right issue. The result shows that leverage influences the earnings management positively and significantly. It means that the higher the leverage, the more the management is motivated to conduct earnings management. In addition, the result of the study shows that there are differences between discretionary accruals before the right issue and that of after the right issue, i.e. the discretionary accruals before the right issue tends to be higher than that of after.
Keywords : management motivation, earnings management, ownership structure, leverage
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