The Influence of Companies Life Cycles on Earnings Management Behavior  

Oleh:

Hastuti, Sri

Jenis: Article from Journal - ilmiah internasional - terdaftar di DIKTI
Dalam koleksi: The Indonesian Journal of Accounting Research (Jurnal Riset Akuntansi Indonesia) vol. 13 no. 2 (May 2010), page 117-132.
Topik: Earnings Management; Corporate Life Cycle; Growth; Mature; Stagnant; Firm Size

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: RR17.8 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

The objective of this study is to examine whether the magnitude of earnings management is different in each stages of the corporate life cycles. Smaller sized firms in their growth stage may not have sophisticated internal control system to prevent earnings management to occur. However, as firms grow larger in their mature and stagnant stages, they may have more sophisticated internal control system than do firms in the growth stage. Thus, i expect that as the firms grow into the next stages in their corporates life cycle, they show less earning management. Using manufacturing companies listed in the Jakarta Stock Exchange (JSX) from year 2000 to 2004. I classify my sample into various life cycle stages based on dividend payout, sales growth, capital expenditure, and age. Of 147 observation, 37 observation fall into the growth-stage firms, 70 mature-stage firms, and 40 stagnant-stage firms. Using the magnitude of discretionary accrual, the results show that firms in either stage of their corporates life cycles-growth. mature, and stagnant-stage- are managed earnings. Stagnant-stage firms engage in less earnings management than do mature-stage firms. Unfortunately, this study does not find any differences in earnings management between growth-stage firms and mature-stage firms.

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