Managerial ability, corporate governance, and IFRS adoption as determinants of earnings management: Evidence from Indonesia
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Author(s)Luqman HakimLink to ORCID Index: https://orcid.org/0000-0002-2132-1474
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Dewi RahayuLink to ORCID Index: https://orcid.org/0000-0001-5070-8910
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Endri EndriLink to ORCID Index: https://orcid.org/0000-0002-8613-6149
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DOIhttp://dx.doi.org/10.21511/ppm.20(1).2022.30
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Article InfoVolume 20 2022, Issue #1, pp. 367-378
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- 1018 Views
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365 Downloads
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Creative Commons Attribution 4.0 International License
Earnings management practices revealed in companies are primarily determined by the role of management in providing the best performance reports for shareholders. The purpose of this study was to analyze the effect of managerial ability, independent commissioners, audit committees, quality of external auditors, and the application of International Financial Reporting Standards (IFRS) on earnings management practices. The research data were retrieved from manufacturing sector companies listed on the Indonesia Stock Exchange from 2014 to 2018. These data are analyzed using a panel data regression model. The empirical findings of the study prove that managerial ability, quality of external auditors, and the application of IFRS have a positive effect on earnings management.
In contrast, independent commissioners have a negative effect. The audit committee does not affect earnings management. This study also reveals that the variables of corporate governance mechanisms, which consist of independent commissioners, audit committees, and the quality of external auditors, have different effects on earnings management practices. This indicates that corporate governance principles have not been appropriately implemented in a company. The managerial ability has a dominant role in carrying out old management practices with various manipulations of financial statements.
- Keywords
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JEL Classification (Paper profile tab)G30, G34, M40, M41
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References67
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Tables7
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Figures0
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- Table 1. Variables’ operationalization
- Table 2. Description of statistical data
- Table 3. Correlation analysis
- Table 4. Chow test results of earnings management as a dependent variable
- Table 5. LM test results of earnings management as a dependent variable
- Table 6. Hausman test results of EM_RM as a dependent variable
- Table 7. Hypothesis testing
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Strategy formulation activities with emphasis on strategic management tools and techniques in Slovak companies
Petra Lesnikova ,
Jarmila Schmidtova ,
Izabela Cichocka
doi: http://dx.doi.org/10.21511/ppm.21(3).2023.05
Problems and Perspectives in Management Volume 21, 2023 Issue #3 pp. 54-68 Views: 618 Downloads: 384 TO CITE АНОТАЦІЯThe importance and benefits of strategic management in the business sphere are declared in studies worldwide. It represents an extensive area for research. The purpose of this paper is to evaluate the strategy formulation activities as well as the strategic management tools and techniques used by Slovak companies. Data on 365 manufacturing companies were obtained through an online questionnaire during 2020–2021. Selected methods of inductive statistics helped to analyze the data (the Pearson chi-square test and interval estimates for population proportion). The results show that the potential of analyzed strategy formulation activities is not filled in the Slovak companies. Enterprises only perform certain activities, and attention is focused mainly on setting strategic goals. It prevails a small orientation to sustainable development in strategic goals (only 22% of enterprises). The most used strategic management tools and techniques consist of an analysis of company resources, SWOT analysis, and customer satisfaction. From the point of view of the manufacturing area, no significant differences are defined in the use of the tools. The future management directions should include a variety of strategic management tools from the external environment. At the same time, the given tools should be supplemented with newer strategic tools ensuring flexibility and adaptation to dynamically changing conditions.
Acknowledgment
We wish to thank project VEGA: Scientific Grant Agency of the Ministry of Education, Science, Research and Sport of the Slovak Republic (Project No.1/0093/23 Research on the circular economy potential in the Slovak business environment in the production of innovative products based on recycled materials wood – rubber – plastic). -
What HR decisions are crucial in turbulent times? An analysis of differences in manufacturing and non-manufacturing companies
Martin Šikyř ,
Renata Skypalova ,
Jana Vavrova
doi: http://dx.doi.org/10.21511/ppm.21(2).2023.56
Problems and Perspectives in Management Volume 21, 2023 Issue #2 pp. 618-629 Views: 394 Downloads: 180 TO CITE АНОТАЦІЯManufacturing and non-manufacturing companies are represented to varying degrees in the structure of advanced economies. Their business success in turbulent times depends on smart business decisions, including decisions concerning human resources (HR) that affect the companies’ ability to survive and compete. However, such judgments may differ in manufacturing and non-manufacturing companies. The paper aims to reveal potential differences in HR decisions between analyzed manufacturing and non-manufacturing companies and bring suggestions for challenging employment and compensation decisions that affect the companies’ economic and social position. The analysis uses the HR Analysis in Companies 2023 survey conducted by Gi Group/Grafton Recruitment Czech Republic at the end of 2022. The survey covered responses from 478 manufacturing and non-manufacturing companies in all fourteen regions of the Czech Republic regarding employment and compensation decisions in 2022 and plans for 2023. The analysis revealed tendencies of manufacturing companies to change the total number of employees and the offer of benefits more often than non-manufacturing companies to more flexibly change the labor demand and labor costs depending on the demand for final production. On the other hand, regardless of manufacturing or non-manufacturing companies, the overall findings revealed tendencies of surveyed companies to follow certain HR decisions from the past in the future and confirm the necessity to concentrate on effective HR decisions related to employment and compensation in turbulent times to manage the labor demand and labor costs efficiently.
Acknowledgment
The authors thank Gi Group/Grafton Recruitment Czech Republic for providing the HR Analysis in Companies 2023 survey and the Internal Grant Agency of Ambis College for financial support to create this article.
