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Reclassification of other comprehensive income, earnings management and earnings quality: evidence from Indonesia / Marhaendra Kusuma, Grahita Chandrarin and Diyah Sukanti Cahyaningsih

This study empirically proves that standard policies concerning the format of presenting income statements are in the form of additional information. This is particularly relevant to the reclassification of other comprehensive income and profit attribution in increasing transparency and reducing asy...

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Main Authors: Kusuma, Marhaendra, Chandrarin, Grahita, Cahyaningsih, Diyah Sukanti
Format: Article
Language:English
Published: Accounting Research Institute (ARI) and UiTM Press, Universiti Teknologi MARA 2022
Subjects:
Public policy (General). Policy sciences
Earnings management
Online Access:https://ir.uitm.edu.my/id/eprint/61965/1/61965.pdf
https://www.doi.org/10.24191/APMAJ.V17i3-08
https://ir.uitm.edu.my/id/eprint/61965/
https://apmaj.uitm.edu.my/
https://www.doi.org/10.24191/APMAJ.V17i3-08
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id my.uitm.ir.61965
record_format eprints
spelling my.uitm.ir.619652023-08-01T02:24:50Z https://ir.uitm.edu.my/id/eprint/61965/ Reclassification of other comprehensive income, earnings management and earnings quality: evidence from Indonesia / Marhaendra Kusuma, Grahita Chandrarin and Diyah Sukanti Cahyaningsih apmaj Kusuma, Marhaendra Chandrarin, Grahita Cahyaningsih, Diyah Sukanti Public policy (General). Policy sciences Earnings management This study empirically proves that standard policies concerning the format of presenting income statements are in the form of additional information. This is particularly relevant to the reclassification of other comprehensive income and profit attribution in increasing transparency and reducing asymmetry information. This study investigated the effect of reclassified items concerning other comprehensive income and net income attributable to owners on earnings management and the quality of earnings. The attribution of earnings to owners was found to have a negative effect on earnings management, along with a positive effect on earnings quality as measured by the earnings response coefficient net and comprehensive income. It was also shown that earnings management does not mediate the effect to earnings quality. Accordingly, this means that the market has responded positively to the reclassification of other comprehensive income and profit attribution. It also precludes the company from carrying out earnings management through the recognition and realisation of other comprehensive income. Reclassification and attribution through increasing transparency and value relevance could consequently reduce asymmetric information. Accounting Research Institute (ARI) and UiTM Press, Universiti Teknologi MARA 2022-12 Article PeerReviewed text en https://ir.uitm.edu.my/id/eprint/61965/1/61965.pdf Reclassification of other comprehensive income, earnings management and earnings quality: evidence from Indonesia / Marhaendra Kusuma, Grahita Chandrarin and Diyah Sukanti Cahyaningsih. (2022) Asia-Pacific Management Accounting Journal (APMAJ) <https://ir.uitm.edu.my/view/publication/Asia-Pacific_Management_Accounting_Journal_=28APMAJ=29/>, 17 (3): 8. pp. 205-237. ISSN 2550-1631 https://apmaj.uitm.edu.my/ https://www.doi.org/10.24191/APMAJ.V17i3-08 https://www.doi.org/10.24191/APMAJ.V17i3-08
institution Universiti Teknologi Mara
building Tun Abdul Razak Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Teknologi Mara
content_source UiTM Institutional Repository
url_provider http://ir.uitm.edu.my/
language English
topic Public policy (General). Policy sciences
Earnings management
spellingShingle Public policy (General). Policy sciences
Earnings management
Kusuma, Marhaendra
Chandrarin, Grahita
Cahyaningsih, Diyah Sukanti
Reclassification of other comprehensive income, earnings management and earnings quality: evidence from Indonesia / Marhaendra Kusuma, Grahita Chandrarin and Diyah Sukanti Cahyaningsih
description This study empirically proves that standard policies concerning the format of presenting income statements are in the form of additional information. This is particularly relevant to the reclassification of other comprehensive income and profit attribution in increasing transparency and reducing asymmetry information. This study investigated the effect of reclassified items concerning other comprehensive income and net income attributable to owners on earnings management and the quality of earnings. The attribution of earnings to owners was found to have a negative effect on earnings management, along with a positive effect on earnings quality as measured by the earnings response coefficient net and comprehensive income. It was also shown that earnings management does not mediate the effect to earnings quality. Accordingly, this means that the market has responded positively to the reclassification of other comprehensive income and profit attribution. It also precludes the company from carrying out earnings management through the recognition and realisation of other comprehensive income. Reclassification and attribution through increasing transparency and value relevance could consequently reduce asymmetric information.
format Article
author Kusuma, Marhaendra
Chandrarin, Grahita
Cahyaningsih, Diyah Sukanti
author_facet Kusuma, Marhaendra
Chandrarin, Grahita
Cahyaningsih, Diyah Sukanti
author_sort Kusuma, Marhaendra
title Reclassification of other comprehensive income, earnings management and earnings quality: evidence from Indonesia / Marhaendra Kusuma, Grahita Chandrarin and Diyah Sukanti Cahyaningsih
title_short Reclassification of other comprehensive income, earnings management and earnings quality: evidence from Indonesia / Marhaendra Kusuma, Grahita Chandrarin and Diyah Sukanti Cahyaningsih
title_full Reclassification of other comprehensive income, earnings management and earnings quality: evidence from Indonesia / Marhaendra Kusuma, Grahita Chandrarin and Diyah Sukanti Cahyaningsih
title_fullStr Reclassification of other comprehensive income, earnings management and earnings quality: evidence from Indonesia / Marhaendra Kusuma, Grahita Chandrarin and Diyah Sukanti Cahyaningsih
title_full_unstemmed Reclassification of other comprehensive income, earnings management and earnings quality: evidence from Indonesia / Marhaendra Kusuma, Grahita Chandrarin and Diyah Sukanti Cahyaningsih
title_sort reclassification of other comprehensive income, earnings management and earnings quality: evidence from indonesia / marhaendra kusuma, grahita chandrarin and diyah sukanti cahyaningsih
publisher Accounting Research Institute (ARI) and UiTM Press, Universiti Teknologi MARA
publishDate 2022
url https://ir.uitm.edu.my/id/eprint/61965/1/61965.pdf
https://www.doi.org/10.24191/APMAJ.V17i3-08
https://ir.uitm.edu.my/id/eprint/61965/
https://apmaj.uitm.edu.my/
https://www.doi.org/10.24191/APMAJ.V17i3-08
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score 13.211869

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