Related Party Transactions, Earnings Management, and Corporate Governance
| Main Authors: | Sapulete, Angelina Gresela, Feliana, Yie Ke |
|---|---|
| Format: | Proceeding PeerReviewed application/pdf Image |
| Bahasa: | eng |
| Terbitan: |
, 2020
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| Subjects: | |
| Online Access: |
http://repository.ubaya.ac.id/40476/ https://conference.rumahpeneleh.or.id/list-of-accepted-abstracts/ |
Daftar Isi:
- Purpose: The purpose of this paper is to investigate the association of Related Party Transactions (RPTs) with Accrual Earnings Management (AEM) and Real Earnings Management (REM) and the role of corporate governance in moderating the association. Methodology: The methodology employed in this paper is the empirical positivism approach. Analysis data used linear regression and logistic regression testing for manufacturing and trade industry sector firms in the 2017-2018 period of times. Result: The result indicates that (1) RPTs have a significant positive association on REM as measured by abnormal production costs and abnormal discretionary expenses, and (2) Good corporate governance is weakening the positive association between RPTs and REM as measured by the abnormal production costs. Originality: This paper contributes to enhancing the earnings management literature by adding related party transactions as a tool to do earnings management, also the result supports the role of corporate governance to mitigate the opportunistic motive of doing RPT. Implication: This result provides a suggestion to investors and policy-making bodies to scrutinize the company motive in doing RPT, and tightened control through corporate governance mechanism.