The Effects of the Asian Financial Crisis on Accounting Conservatism in Indonesia

Dezie L. Warganegara, Dezie@binus.edu and Vina Vionita
Additional contact information
Dezie L. Warganegara: BINUS Business School, BINUS University Jalan Hang Lekir I, No. 6, Jakarta, 10270 Indonesia
Vina Vionita: Stern Stewart & Pte Ltd Penthouse Level, Suntec Tower Three, 8 Temasek Boulevard, 38988 Singapore

Asian Academy of Management Journal of Accounting and Finance (AAMJAF), 2010, vol. 6, issue 1, 69-88

Abstract: This study examines the extent of conservatism in publicly listed Indonesian companies prior to and following the Asian financial crisis. This study finds that prior to the crisis, share returns did not lead earnings, and accounting practices in Indonesia failed to utilise accruals for reducing cash flow noise as well as to demonstrate conservatism in financial reporting preparation. In the post-crisis period, although there is evidence that stock returns led earnings and that accruals were utilised properly in noise reductions, accounting practices in Indonesia still did not exhibit the accepted level of conservatism.

Keywords: accounting conservatism; asymmetric recognition; Indonesia; Asian financial crisis (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:usm:journl:aamjaf00601_69-88

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