EARNINGS MANAGEMENT: DETERMINANT FACTORS AND STOCK PRICE IN DEVELOPING MARKET
Accounting Department, Faculty of Economics, Airlangga University
Jl. Airlangga No.4 Surabaya 60286
Korespondensi dengan Penulis:
Zaenal Fanani: Telp +62 31 503 3642, + 62 31 503 6584
The aim of this study was to prove whether manager its earnings for the purpose of informative or target opportunistic. Research also investigated whether investment opportunity set influenced the choice of manager to report as opportunistic to hide performance, or to report earning more informative concerning with debt, political cost, market share, and earning. Sample of this research was chosen by using purposive sampling of 350 manufacturing business listed in the Jakarta Stock Exchange, started from 1997 up to 2002. Structural Equation Modeling (SEM) by using program of Analysis of Moment Structures (AMOS) was considered as the appropriate statistical technique to examine pattern relation of formed model. The results showed that earning management conducted by manager in Developing Market such as Indonesia represented informative earning management which meant all investors had more own belief in earning reporting, but this research could not prove that company owning high investment opportunity set tended to conduct informative earning management.
Key words: earning management, investment opportunity set, debt, political cost, market share