The influence of intellectual capital on earnings management through real activities manipulation in Indonesian manufacturing companies
by Nuryaman; Eriana Kartadjumena; Sendi Gusnandar Arnan
International Journal of Economics and Business Research (IJEBR), Vol. 18, No. 3, 2019

Abstract: This study examines the influence of intellectual capital (IC) on earnings management through real activities (EMTRA) manipulation in Indonesian manufacturing companies. This study measured IC elements by employing the value added intellectual capital (VAIC™) model developed by Pulic (1998) that consists of human capital, structural capital, and capital employed efficiencies. Meanwhile, earnings management was measured by employing the Roychowdhury' model (2006), which is known as EMTRA manipulation. EMTRA manipulation is conducted on activities of sales operation, reduction of cost discretion, and over-production. This study analysed data from 69 financial statements of Indonesian manufacturing companies that are listed on the Indonesia Stock Exchange in 2016. The result shows that the integration of intellectual capital elements can reduce earnings management behaviour through sales operation activity manipulation. Moreover, partially, the intellectual capital of capital employed and structural capital efficiencies can lower the practice of EMTRA of cost discretion.

Online publication date: Wed, 02-Oct-2019

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Economics and Business Research (IJEBR):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com