Dezie L.Warganegara_Abstract_1722013

THE INCIDENCE AND QUALITY OF FINANCIAL GRAPHICS IN INDONESIAN IPO PROSPECTUSES

  

Dezie L. Warganegara
Tjut F. Bachrumsyah
Accounting & Finance Department – BINUS Business School Bina Nusantara University
Jl.Hang Lekir I No.6 Jakarta, 10270

Yanthi R.I. Hutagaol
R&D Division – BINUS Business School Bina Nusantara University,
Jl. Hang Lekir I No.6 Jakarta, 10270

Korespondensi dengan Penulis:
Dezie L. Warganegara: Telp.+62 21 534 5830; Fax.+62 21 530 0244
E-mail: dezie@binus.edu

Abstract

The purpose of this study was to investigate the selectivity and the quality of financial graphs in Indonesian IPO prospectuses. The first hypothesis of this study related to the intensiveness in the use of the graphs with the profitability of the IPO firms, while the second hypothesis associated the distortion in the graphs’ constructions with the intention to show financial performance in a more favorable way. Content analysis was used to investigate the relationship between the intensiveness in the use of the graphs and the profitability. The distortion in the graphs’ constructions was detected using the Relative Graph Discrepancy (RGD) index. This study found that there was no evidence more profitable firms using graphs more intensively in their IPO prospectuses. With regards to distortion, it was found that IPO firms tended to exaggerate their performance depicted on the financial graphs in their prospectuses.

Key words: financial graphs, distortion, selectivity, IPO prospectus

(Full Text. pdf)

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