Title: Ownership structure and earnings management: studies on banking companies before and during the COVID-19 pandemic

Authors: Anna Purwaningsih; Anggreni Dian Kurniawati; Yohanes Mario Pratama

Addresses: Faculty of Business and Economics, Department of Accounting, Universitas Atma Jaya Yogyakarta, Jalan Babarsari No. 43, Yogyakarta, 55281, Indonesia ' Faculty of Business and Economics, Department of Accounting, Universitas Atma Jaya Yogyakarta, Jalan Babarsari No. 43, Yogyakarta, 55281, Indonesia ' Faculty of Business and Economics, Department of Accounting, Universitas Atma Jaya Yogyakarta, Jalan Babarsari No. 43, Yogyakarta, 55281, Indonesia

Abstract: This study was conducted to obtain empirical evidence regarding earnings management practices in the banking industry before and during the COVID-19 pandemic, as well as the impact of ownership structure on earnings management practices. The sample of this research is banking companies listed on the IDX in 2019 and 2020. The modified Jones model is used to proxy accrual earnings management (AEM), whereas the modified Roychowdhury model is used to proxy real earnings management (REM) for banking companies. The independent variable of this research is ownership structure. Majority ownership, institutional ownership, government ownership, and CEO ownership are used to represent the ownership structure. The hypotheses in this study are tested using a t-test and a multiple regression test. The results showed that: 1) ownership structure (institutional ownership and government ownership) affect REM practices, but ownership structure had no effect on AEM practices; and 2) REM and AEM do not differ between before and during the new normal.

Keywords: banking; earnings management; real earnings management; accrual earnings management; ownership structure; institutional ownership; government ownership; COVID-19 pandemic.

DOI: 10.1504/IJMEF.2023.131900

International Journal of Monetary Economics and Finance, 2023 Vol.16 No.3/4, pp.300 - 308

Received: 11 Feb 2022
Accepted: 29 May 2022
Published online: 04 Jul 2023 *

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