Characteristics of Audit Committee and Real Activities Manipulation: Case from Indonesia

I. Putu Sugiartha Sanjaya () and Andreas Yudha Mahendra Jati
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I. Putu Sugiartha Sanjaya: Universitas Atma Jaya Yogyakarta
Andreas Yudha Mahendra Jati: Universitas Atma Jaya Yogyakarta

Chapter Chapter 12 in A New Paradigm for International Business, 2015, pp 227-245 from Springer

Abstract: Abstract The objective of this research is to investigate the impact of characteristics of audit committee on real activities manipulation. This research has a contribution for developing theory on earnings management. The last researches find that audit committee has an impact on accrual earnings management. Because, earnings management are not only using accruals but management can manage earnings through real activities manipulation. Therefore, this study has new angle and perspective to improve studying in relation between audit committee and earnings management. This study collects data from manufacturing industry listed in the Indonesia Stock Exchange on the period 2007–2011. The sum of observations is 125 firm years. The dependent variable of this study is real activities manipulation, and the independent variables are characteristics of audit committee such as the age of audit committee members, gender (the proportion of women on audit committee members), and education of audit committee members. This study uses one proxy for real earnings management such as measuring abnormal operating cash flow. The age, gender, and education of audit committee have no influence on real activities manipulation.

Keywords: Audit committee; Real activities manipulation; Earnings management; Indonesia Stock Exchange; Indonesia (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-981-287-499-3_12

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DOI: 10.1007/978-981-287-499-3_12

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