THE EFFECT OF ACCOUNTING CONSERVATISM THROUGH CORPORATE GOVERNANCE ON EARNING QUALITY

THE EFFECT OF ACCOUNTING CONSERVATISM THROUGH CORPORATE GOVERNANCE ON EARNING QUALITY
Tumpal Manik
Scientific Journal of Accounting and Financial Indonesia; Faculty of Economic, Accounting Department UMRAH
Inggris and Indonesia
Faculty of Economic, Accounting Department UMRAH
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Abstrak

ABSTRACT

The purpose research is to examine the effect of accounting conservatism through corporate governance mechanisms on earning quality at manufacture companies listed on the Stock Exchange of Indonesianfrom year 2014 to 2016. The sampling was done by purposive sampling method for 168 companies, meet the criteria a total 91 companies, total data of research 273. The data were analyzed using regression method and testing by statistic software. Results Obtained from testing the first hypothesis; the effect of accounting conservatism on earning quality showed significant results, the effect of 23,3%. Second hypothesis; accounting conservatism with accrual sizes effect on earnings quality showed significant results, the effect of 24,3%. The third hypothesis; accounting conservatism with market value effect effect on earnings quality on earnings quality showed significant results, the effect of 27,1%. This means that management positively signals the application of accounting conservatism within the company and has an impact on improving the quality of earnings. The finally showed that accounting conservatism through corporate governance mechanisms that are more evective in restraining accounting manipulation can better exploit the benefits of conservatism and simultaneously curtail its costs, leading to a positive relation between the strength of reporting oversight and conservative accounting.