Earnings Management Practices on Companies In The Shariah Index (The comparative studies between STDAM and LTDAM in Indonesian stock exchange during 2004-2010 period)
MetadataShow full item record
Earning Management(EM) isa behavior of managers in presenting the financial statements, Managers choose accounting methods based on accounting standards for theincrease(decrease) in income for the period of the business unit responsibilities, without causing an increase (decrease) in the unit of economic profitability in the long run(Gul and Tsui, 2001; Aljifri, 2007; Cohen and Zarowin, 2010;Louis and Robinson, 2005;Hastuti dan Hutama, 2010). This study developed a modified model ofJones(Kang and Sivaramakrishnan,1995; Kothari, 2001; Fields, Lys, and Vincent,2001; Whelan dan McNamara, 2004). The model isdivided intoshort-term discretionaryaccruals(STDAM) andlong-term discretionaryaccruals(LTDAM). STDAMis anEMcaused by theuse ofaccounting methodsthroughchanges incurrent assetsthathave an impact onrevenuesorcosts, whileLTDAMis anEMofchanges infixed assetsthathave an impact onrevenuesandexpenses.This study aims to analyze differences between methods STDAM with LTDAM of companies listedonthe shariah index (JII). This study is across sectional study that takesthe data fromtheyears2004-2010. The sample inthis study amounted to130firm years. The result shows adifferencebetween modelsofSTDAM with LTDAMoncompanies in the shariah index. Differencebetween STDAMwith LTDAMoccurdueto STDAMtend to be lowerthan LTDAM. Wheredifferences inthe use ofaccounting methodsoncurrent assetssuch ascredit sales, accounts receivable, andinventorytend togivelowerincome/reduced. While the use ofaccountingmethodsonfixed assetssuch asfixed assets depreciationmethodtends to givehigherincomeorincrease.