Fakultas Ekonomi Universitas Syiah KualaBanda Aceh, 21-22 Juli 2011
The Effect of Accounting Disclosure, Concentrated Ownership, and AccountingHarmonization to Earnings Quality: The Case of Asia PacificAlfon Inggrid CarolinaRatna WardhaniGraduate Program in Accounting Faculty of Economics, University of IndonesiaAbstract
This study aims to determine the influence of the level of disclosure and concentratedownership on the quality of earnings in the context of differences in the degree of localstandards to IFRS convergence between countries. This research was carried out againstthe companies listed on stock exchanges of Indonesia, Singapore, Hong Kong, and Australia. This study will use a multidimensional measure earnings quality using the fivemeasures of earnings quality which are earnings predictability, earnings management,earnings response coefficients, and conservatism. In general, this study found that higher levels of disclosure by companies, the high quality of earnings reported by companies. In thecontext of increasingly high demand for convergence of accounting standards to IFRS, thisstudy supports the role of convergence in improving the quality of corporate earnings. Theuse of accounting standards to IFRS convergence will strengthen the influence of the level of disclosure to earnings quality.
Key words: Disclosure, ownership, degree of convergence of local GAAP to IFRS.
In the era of increasing levels of convergence of local accounting standards toInternational Financial Reporting Standards (IFRS), companies are required to performfinancial reporting based on international standards. Implementation of principles basedstandards in one side will make the company better able to apply the standards according totheir own characteristics, but on the other hand it will increase the possibility of using asubjective judgement, especially in the choice of accounting method, making estimation, andmake a valuation that requires certain assumptions. The subjective judgement sometimeused to generate the desired income (Lobo and Zhou, 2001). The consequences of suchsubjective judgement is that the company must improve disclosure of financial information