EARNINGS MANAGEMENT AND INITIAL PUBLIC OFFERINGS: FOCUS ON INDONESIAN STATE-OWNEDENTERPRISES

Maharani, Adisya Valya (2019) EARNINGS MANAGEMENT AND INITIAL PUBLIC OFFERINGS: FOCUS ON INDONESIAN STATE-OWNEDENTERPRISES. S1 thesis, UAJY.

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Abstract

This research examines whether the earnings management level is performed lesser by the state-owned-enterprises (SOEs) prior to initial public offerings (IPO) than the non-SOEs prior to IPO. The research uses 90 samples that are taken from 45 SOEs samples and 45 non-SOEs samples that are listed in Indonesia Stock Exchange (IDX), both from 3 years prior to IPO during 1991- 2013. We exclude the financial sector in both SOEs and non-SOEs because the financial sector is using different measurement. Earnings management is measured using discretionary accruals which is measured using Jones model (1991). The result of this research is that the earnings management level of SOEs prior to IPO is not lesser than the non-SOEs’. Based on the one sample t-test conducted by researcher, we can conclude that both SOEs and non-SOEs perform earnings management prior to IPO. It is suspected that the implementation of good corporate governance is still weak on both SOEs and non-SOEs.

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