Financial Distress, Institutional Ownership, and Earnings Management: Evidence from the Energy Sector

Widya Winata; Sri Hastuti; Sri Suryaningsum

doi:10.32535/jicp.v7i4.3559

Financial Distress, Institutional Ownership, and Earnings Management: Evidence from the Energy Sector

Widya Winata, Sri Hastuti, Sri Suryaningsum

Abstract

This study seeks to analyze the effect of financial distress on earnings management, focusing on institutional ownership as a potential moderating variable. Employing a quantitative research approach, this study utilizes secondary data sourced from the financial statements of energy industry sector companies listed on the Indonesia Stock Exchange (IDX) and the companies' official websites during the period 2019–2023. The purposive sampling technique was used to select a representative sample, ensuring relevance and data quality. The findings reveal that financial distress positively influences earnings management, indicating that companies experiencing financial difficulties are more likely to engage in earnings management practices, possibly as a strategic response to mitigate the appearance of financial instability. However, the study also finds that institutional ownership does not moderate the relationship between financial distress and earnings management. This suggests that the presence of institutional investors does not significantly alter or mitigate the impact of financial distress on a company's propensity to engage in earnings management. These results provide important insights for stakeholders, including regulators and investors, by highlighting the implications of financial distress on corporate reporting behavior and the limited role of institutional ownership in curbing earnings management practices

Full Text:

PDF

References

Adisaputro, G., & Anggarini, Y. (2017). Anggaran Bisnis. UPP STIM YKPN.

Altman, E. I., Iwanicz?Drozdowska, M., Laitinen, E. K., & Suvas, A. (2017). Financial distress prediction in an international context: A review and empirical analysis of Altman's Z?score model. Journal of International Financial Management & Accounting, 28(2), 131-171. https://doi.org/10.1111/jifm.12053

Andriani, N., & Arsjah, R. J. (2022). Pengaruh intellectual capital dan esg terhadap manajemen laba yang dimoderasi oleh profitabilitas. Jurnal Ekonomi Trisakti, 2(2), 595-610. https://doi.org/10.25105/jet.v2i2.14646

Atin, T., & Pujiono, P. (2022). Analisis laba bersih dan manajemen laba model jones dimodifikasi untuk keputusan investasi pada sektor agrikultur di BEI setelah implementasi full IFRS. Riset & Jurnal Akuntansi, 6(3), 2644–2654. https://doi.org/10.33395/owner.v6i3.940

Chairunnisa, Z., Rasmini, M., & Alexandri, M.B. (2021). Pengaruh financial distress terhadap manajemen laba pada perusahaan sub sektor telekomunikasi yang terdaftar di bei periode 2015-2019. Jurnal FEB UNMUL, 17(3), 387–394.

Chariri, A., & Ghozali, I. (2007). Teori Akuntansi. Badan Penerbit Universitas Diponegoro.

Christiana, I., Purnama, N. I., & Ardila, I. (2020). Financial ratio in the analysis of earnings management. International Journal of Accounting & Finance in Asia Pasific, 3(1), 8-17. https://doi.org/10.32535/ijafap.v3i1.714

El Diri, M. (2017). Introduction to Earnings Management. Springer.

Farida, A. L., & Sugesti, P. F. (2023). Determinant of earnings management: Financial distress, tax planning, audit quality, and public accountant firm size. Journal of Accounting and Strategic Finance, 6(1), 1-15. https://doi.org/10.33005/jasf.v6i1.386

Fiqriansyah, R., Sari, M. M., Amandayu, I., Orchidia, & W., Tarigan, K. B. (2024). Manajemen laba dengan pendekatan model jones. Jurnal Akuntansi dan Keuangan West Science, 3(1), 39–46.

Ghozali, I. (2018). Aplikasi Analisis Multivariate Dengan Program IBM SPSS 25. Badan Penerbit Universitas Diponegoro.

Herawaty, V. (2008). Peran praktek corporate governance sebagai moderating variable dari pengaruh earnings management terhadap nilai perusahaan. Jurnal Akuntansi dan Keuangan, 10(2), 97-108. https://doi.org/10.9744/jak.10.2.PP.%2097-108

Husada, E. V., & Handayani, S. (2021). Pengaruh pengungkapan ESG terhadap kinerja keuangan perusahaan (Studi empiris pada perusahaan sektor keuangan yang terdaftar di BEI periode 2017-2019). Jurnal Bina Akuntansi, 8(2), 122-144.

Kieso, D. E., Weygandt, J. J., Warfield, T. D., Wiecek, I. M., & McConomy, B. J. (2019). Intermediate Accounting (Vol. 2). John Wiley & Sons.

Kusumawardhani, I., & Windyastuti, W. (2020). Manajemen Laba dan Credit Rating. Gosyen Publishing.

Li, Y., Li, X., Xiang, E., & Djajadikerta, H. G. (2020). Financial distress, internal control, and earnings management: Evidence from China. Journal of Contemporary Accounting and Economics, 16(3), 1-18. https://doi.org/10.1016/j.jcae.2020.100210.

Liu, T., Abdelbaky, A., Elamer, A. A., & Elmahgoub, M. (2023). Real earnings management and ESG disclosure in emerging markets: The moderating effect of managerial ownership from a social norm perspective. Heliyon, 9(12).

Mardianto, M., & Khellystina, K. (2021). Analisis pengaruh komposisi kepemilikan terhadap manajemen laba pada perusahaan yang terdaftar di Bursa Efek Indonesia. Journal of Applied Accounting and Taxation, 6(2), 147-160.

Mendrofa, F. A. M., & Susilowati, K. (2024). Metodologi Penelitian Kuantitatif. Penamuda Media.

Mustika, M., Ardheta, P. A., & Paembonan, Y. R. (2020). Pengaruh financial distress dan komite audit terhadap manajemen laba pada sektor pertambangan. Jurnal STEI Ekonomi, 29(01), 71-78.

Nabiilah, A., & Fahira, H. (2024). Pengaruh tata kelola perusahaan, kompetensi auditor internal dan ESG terhadap manajemen laba: Peran moderasi penghindaran pajak. Jurnal Ekonomi Manajemen Dan Bisnis, 1(5), 77-87. https://doi.org/10.62017/jemb.v1i5.1447

Oktavianti, O., & Prayogo, E. (2022). Leverage, free cash flow dan profitabilitas terhadap manajemen laba dengan environmental, social and governance (ESG) sebagai variabel moderasi. Jurnal Ilmiah Manajemen, Ekonomi, & Akuntansi, 6(3), 1654-1665. https://doi.org/10.31955/mea.v6i3.2528

Perdana, A. A. (2019). The influence of institutional ownership, leverage, and audit committee on earnings management: Evidence of companies listed on the Indonesia stock exchange. Journal of Accounting Research, Organization and Economics, 2(2), 97-112. https://doi.org/10.24815/jaroe.v2i2.14633

Prasetyo, B., & Jannah, L. M. (2012). Metode Penelitian Kuantitatif. PT Rajagrafindo Persada.

Putri, M., & Naibaho, E. A. B. (2022). The influence of financial distress, cash holdings, and profitability toward earnings management with internal control as a moderating variable: the case of listed companies in ASEAN countries. Jurnal Akuntansi dan Keuangan Indonesia, 19(1), 120-138. https://doi.org/10.21002/jaki.2022.06

Sari, T., & Hermi, H. (2023). Pengaruh financial distress, leverage dan prudence terhadap praktik manajemen laba dengan kepemilikan institusional sebagai variabel moderasi. Jurnal Ekonomi Trisakti, 3(2), 3479–3488. https://doi.org/10.25105/jet.v3i2.18085

Scott, W. R. (2015). Financial Accounting Theory (7th ed.). Wiley.

Sugiyono, S. (2019). Metode Penelitian Kuantitatif, Kualitatif, dan R&D. Alfabeta.

Sumajow, K. C., Kalangi, L., & Weku, P. (2022). The effect of financial distress, audit committee, auditor switching, and industry types on audit delay in the Covid-19 pandemic of companies listed on the Indonesian Stock Exchange’s KOMPAS100 Index. International Journal of Accounting & Finance in Asia Pasific, 5(1), 1-11. https://doi.org/10.32535/ijafap.v5i1.1406

Suryahadi, A. (2024). Laba Bersih Emiten Kontraktor Tambang Milik Prajogo Pengestu (PTRO) Ambles 70,18%. Kontan. https://insight.kontan.co.id/news/laba-bersih-emiten-kontraktor-tambang-milik-prajogo-pangestu-ptro-ambles-7018

Suryana, A., & Khairi, M. R. R. (2022). Pengaruh financial distress terhadap earnings management (studi empiris pada perusahaan sektor pertambangan yang terdaftar di Bursa Efek Indonesia Periode 2014-2018). Jurnal Ekonomi dan Statistik Indonesia, 2(2), 182-199. https://doi.org/10.11594/jesi.02.02.06

Suwardjono, S. (2005). Teori Akuntansi: Perekayasaan Pelaporan Keuangan. BPFE Yogyakarta.

Tania, S., Pratiwi, L. N., & Laksana, B. (2021). Prediksi kebangkrutan menggunakan metode Altman Z-Score modifikasi pada PT Inti (Persero). Indonesian Journal of Economics and Management, 1(3), 628-633.

Tumiwa, R.A.F, & Mamuaya, N.C. (2018). The influence of managerial ownership and institutional ownership on agency costs. International Journal of Applied Business & International Management, 3(1), 65-74. https://doi.org/10.32535/ijabim.v3i1.78

Whitelock, V. G. (2015). Relationship between environmental social governance (ESG) management and performance–the role of collaboration in the supply chain [Doctoral dissertation, University of Toledo]. OhioLINK. http://rave.ohiolink.edu/etdc/view?acc_num=toledo1450087632

DOI: https://doi.org/10.32535/jicp.v7i4.3559

Refbacks

There are currently no refbacks.

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Published by:

AIBPM Publisher

Editorial Office:

JL. Kahuripan No. 9 Hotel Sahid Montana, Malang, Indonesia
Phone:+62 341 366222
Email: journal.jicp@gmail.com
Website:http://ejournal.aibpmjournals.com/index.php/JICP

Supported by: Association of International Business & Professional Management

If you are interested to get the journal subscription you can contact us at admin@aibpm.org.

ISSN 2622-0989 (Print)
ISSN 2621-993X (Online)

DOI:Prefix 10.32535 by CrossREF

Journal of International Conference Proceedings (JICP) INDEXED: