Presenters: Diana Agus Pratiwi, Fitri Laela Wijayati
Affiliation: Raden Mas Said State Islamic University
Room: 10
ICIES News- At the 4th International Conference on Islamic Economics Studies (ICIES) 2024, Diana Agus Pratiwi and Fitri Laela Wijayati from Raden Mas Said State Islamic University presented their research on “The Effect Of Corporate Strategy And Firm Characteristics On Earnings Management With Managerial Ownership As A Moderating Variable.” The session, held in Room 10, delved into the intricate dynamics of earnings management within the Consumer Non-Cyclicals sector.
The rapid evolution of the manufacturing industry has intensified competition among companies, prompting a need for enhanced performance. Pratiwi and Wijayati’s study aimed to investigate how corporate strategy and firm characteristics, including company size, leverage, and profitability, influence earnings management, while also considering managerial ownership as a moderating factor.
Using a sample of 54 companies from the Consumer Non-Cyclicals sector listed on the Indonesia Stock Exchange (IDX), the researchers employed a quantitative approach to analyze the data. The study’s findings revealed that corporate strategy does not significantly impact earnings management. However, firm characteristics such as company size, leverage, and profitability were found to influence earnings management practices.
Interestingly, managerial ownership did not moderate the relationship between corporate strategy or firm characteristics and earnings management. This suggests that managerial ownership, in this context, does not significantly alter the impact of corporate strategy and firm characteristics on earnings management practices.
These results highlight the importance of firm characteristics in determining earnings management practices, suggesting that companies should focus on these internal factors to mitigate or manage earnings manipulation. The findings also call into question the role of managerial ownership as a moderating variable, indicating that its influence may not be as significant as previously thought.
Pratiwi and Wijayati’s presentation emphasized the need for further research to explore other potential moderating variables and the complex relationships between corporate strategy, firm characteristics, and earnings management. Their study provides valuable insights for industry players and policymakers aiming to understand and improve corporate governance and financial reporting practices in the manufacturing sector.