PENGARUH KEPEMILIKAN ULTIMAT TERHADAP PRAKTIK CLASSIFICATION SHIFTING

I Sanjaya, Putu Sugiartha and Liris, Maria Lana PENGARUH KEPEMILIKAN ULTIMAT TERHADAP PRAKTIK CLASSIFICATION SHIFTING. ...

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Abstract

This study aims to test one of the methods of earnings management such as classification shifting. Classification shifting is misclassification deliberate on core expenses recognized as special items in the income statement. It will improve core earnings without changing the net income. This study also aims to examine the influence of the ultimate ownership on level of classification shifting. The sample in this study is manufacturing companies listed on the Stock Exchange, particularly reporting income decreasing special items. Sample period is 4 years (2001-2004). Based on the defined criteria, total of 90 firms - year observations from industry sub-sector Food & Beverages, Textile Products, and Automotive & Allied Products used as a sample. The results of this study does not provide empirical to support alternate hypotehsis and this study cannot test the effect of ultimate ownership on the level of classification shifting. However, the results of this study can led to expectation that special items are used to manage earnings such as a big bath. This expectation is based on the observation of the financial performance condition of sample and the change of top management at some sample.

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