EARNINGS MANAGEMENT AND VALUE RELEVANCE BEFORE AND AFTER IFRS CONVERGENCY
Hamidah; Raysa Dyah Ayu Albertha

Faculty of Economic and Bussines, Universitas Airlangga, Surabaya

Abstract

The IASB issued International Financial Reporting Standards (IFRS) to bridge the differences the existing standards in various countries. The application of IFRS is expected to impact the decreased earnings management and increased relevance value of information in the financial statements to improve the quality of financial statements.This research is aimed to analyze the differences between earnings management and value relevance before and after IFRS convergence in Indonesia. This research used data of all manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the period of observation before IFRS (2008-2010) and after IFRS (2012-2014). Tests of this research using wilcoxon signed rank test and multiple linear regression. The result of this research shows that the application of IFRS in Indonesia can reduce earnings management but can not increase the value relevance of information.

Keywords: IFRS, earnings management, value relevance, Indonesia

Topic: Financial Management and Accounting