Year 2017, Volume 7 , Issue 4, Pages 433 - 447 2017-12-01

International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia

Hasyyati Yusrina [1] , Mukhtaruddin Mukhtaruddin [2] , Luk Luk Fuadah [3] , Zunaidah Sulong [4]


The International Financial Reporting Standards (IFRS) initiated by International Accounting Standard Board (IASB) are principle-based standard that require extensive disclosure of financial statements and accounting information as compared to prior standard that is the Generally Accepted Accounting Principles (GAAP) to better reflect the overall quality of company’s performance. Therefore, the IFRS convergence is expected to improve the reliability of financial reporting by limiting opportunistic managerial discretion. The conjecture is the mandatory adoption of IFRS will reduce the managerial discretionary behaviors to engage in earnings management practices, thus improving earnings quality and value relevance of accounting quality information. High quality of accounting information in terms of earnings quality and value relevance can stimulate investors’ behavior in the stock market exchange. This study utilises a sample of 110 manufacturing sector companies for the years 2009 to 2014, to include pre-IFRS (2009 to 2011) and post-IFRS period (2012 to 2014). The data is analyzed using multiple regression technique by using the pooled least square method. The results of earnings management model of the study indicate that there are significantly positive relationship between size and leverage on earnings management. Whereas, the level of gross fixed assets is found to have a significant negative effect on earnings management. While, value relevance model the result shows there are significantly positive relationship between earnings per share (EPS), book value per share (BVPS) and size. Whereas, the leverage is shows significantly negative effect to earnings management. Overall, this study provides evidence of effect of IFRS convergence on the quality of accounting information is increase in term of value relevance but decrease in term of earning management.
International Financial Reporting Standards Adoption, Earning Quality, Earning Per Share, Book Value Per Share
Other ID JA29SE77TS
Journal Section Research Article
Authors

Author: Hasyyati Yusrina

Author: Mukhtaruddin Mukhtaruddin

Author: Luk Luk Fuadah

Author: Zunaidah Sulong

Dates

Publication Date : December 1, 2017

Bibtex @ { ijefi353574, journal = {International Journal of Economics and Financial Issues}, issn = {}, eissn = {2146-4138}, address = {ijefi@econjournals.com}, publisher = {İlhan ÖZTÜRK}, year = {2017}, volume = {7}, pages = {433 - 447}, doi = {}, title = {International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia}, key = {cite}, author = {Yusrina, Hasyyati and Mukhtaruddin, Mukhtaruddin and Fuadah, Luk Luk and Sulong, Zunaidah} }
APA Yusrina, H , Mukhtaruddin, M , Fuadah, L , Sulong, Z . (2017). International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia. International Journal of Economics and Financial Issues , 7 (4) , 433-447 . Retrieved from https://dergipark.org.tr/en/pub/ijefi/issue/32006/353574
MLA Yusrina, H , Mukhtaruddin, M , Fuadah, L , Sulong, Z . "International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia". International Journal of Economics and Financial Issues 7 (2017 ): 433-447 <https://dergipark.org.tr/en/pub/ijefi/issue/32006/353574>
Chicago Yusrina, H , Mukhtaruddin, M , Fuadah, L , Sulong, Z . "International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia". International Journal of Economics and Financial Issues 7 (2017 ): 433-447
RIS TY - JOUR T1 - International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia AU - Hasyyati Yusrina , Mukhtaruddin Mukhtaruddin , Luk Luk Fuadah , Zunaidah Sulong Y1 - 2017 PY - 2017 N1 - DO - T2 - International Journal of Economics and Financial Issues JF - Journal JO - JOR SP - 433 EP - 447 VL - 7 IS - 4 SN - -2146-4138 M3 - UR - Y2 - 2019 ER -
EndNote %0 International Journal of Economics and Financial Issues International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia %A Hasyyati Yusrina , Mukhtaruddin Mukhtaruddin , Luk Luk Fuadah , Zunaidah Sulong %T International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia %D 2017 %J International Journal of Economics and Financial Issues %P -2146-4138 %V 7 %N 4 %R %U
ISNAD Yusrina, Hasyyati , Mukhtaruddin, Mukhtaruddin , Fuadah, Luk Luk , Sulong, Zunaidah . "International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia". International Journal of Economics and Financial Issues 7 / 4 (December 2017): 433-447 .
AMA Yusrina H , Mukhtaruddin M , Fuadah L , Sulong Z . International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia. IJEFI. 2017; 7(4): 433-447.
Vancouver Yusrina H , Mukhtaruddin M , Fuadah L , Sulong Z . International Financial Reporting Standards Convergence and Quality of Accounting Information: Evidence from Indonesia. International Journal of Economics and Financial Issues. 2017; 7(4): 447-433.