Ridarmelli Ridarmelli

Real Earnings Management (REM) and financial success may have different relationships depending on how managers act. Bonus mechanisms are a significant factor that influences management behavior. The study seeks to examine the impact of bonus systems on the correlation between financial performance and REM practices in manufacturing companies in Indonesia. Moderated Regression Analysis (MRA) is employed to evaluate the influence of bonus mechanisms in moderating the association of financial performance on REM. The technique of purposive sampling was used to pick the sample. The study utilized data from manufacturing firms listed on the Indonesian Stock Exchange from 2017 to 2021, including a total of 400 observed data points. The research findings demonstrate that sales growth is the sole factor that significantly influences REM in manufacturing organizations, as indicated by a p-value below 10%. Other financial performance factors, on the other hand, with p-values for each variable above 10%, have not been shown to have a significant impact on REM. These factors include ROA, leverage, operating cash flow, and cash. The findings also demonstrate that, with a p-value for each variable above 10%, the bonus mechanism is a variable that modifies the effect of all financial performance variables on REM.

Type of the article: Research Article

The objective of adopting a new International Financial Reporting Standard (IFRS) is to enhance the value relevance of accounting information. Accounting information has value relevance when the market price of securities reacts to the financial statements. This study aims to analyze the effect of IFRS 9 adoption on the value relevance of financial statements and whether the delayed adoption of IFRS 9 in Indonesia increases the value relevance of accounting information compared to Malaysia, which implemented it immediately. Malaysian banks effectively adopted IFRS 9 in 2018 as required by the International Accounting Standard Board (IASB); meanwhile, Indonesian banks only began to implement it effectively on January 1, 2020. The data used come from conventional banks listed on the Indonesia Stock Exchange for the period 2015–2019 (pre-IFRS 9) and 2020–2024 (post-IFRS 9), and from Bursa Malaysia for the period 2013–2017 (pre-IFRS 9) and 2018–2022 (post-IFRS 9). The results revealed that IFRS 9 adoption increased the value relevance of banking financial statements in both countries. However, Malaysian banks showed a higher increase in the value relevance of financial statements than those of Indonesian banks. These findings indicate that the timing of the new accounting standards adoption has various impacts on investor behavior.