degres A.S.B.

L Degres
Article

Empirical Study of the Relationship between

Managerial Accounting Discretion and Innate Factors
with the Quality of Financial Reporting
Bambang Subiyanto1, Imam Ghozali2, Darsono3
1,2,3
Universitas Diponegoro Semarang, Indonesia
Email: bambangsubiyanto@gmail.com

Abstract. This study aims to determine the effect of managerial accounting explanations and inherent factors on
financial reporting quality. This research uses explanatory research using secondary data. This study's research
population consisted of industrial sectors listed on the Indonesia Stock Exchange during 2012 to 2016 which stated
assets in the form of supplies, reports on the cost of goods sold and losses (deficits). Operations to meet the
objective of measuring the indicator variable. Selection of sample criteria by judgmental sampling using Path
Analysis and WarpPLS version 5.0 to analyze and test the hypothesis. The results showed that the managerial
accounting description had a significant negative sign and the intrinsic factors had a positive sign, but not significant
to the quality of financial reporting.

Keywords: Managerial Accounting Policies, Innate Factors, Financial Reporting Quality.

1. Introduction
With the increasing loss of boundaries between countries, there has been a
harmonization of accounting standards and internationally accepted accounting standards.
According to Indra Wijaya (2007), harmonization is a process of adjusting accounting
practices in a country to International Standards by accommodating variations in local bars.
Accounting harmonization will increase comparability so that financial reports are more
reliable or reliable.
Research by Beest et al. (2009), on the quality of financial reporting, is measured
using Qualitative Characteristics according to the IASB (2008) definition of the Exposure
Draft (ED). The instrument he developed consists of 21 comprehensive questions (content
analysis) on Qualitative Characteristics, which consists of indicators of relevance, faithful
representation, understandability, comparability and timeliness. Research by Braam and Van
Beest (2013), measures the quality of Financial Reporting by developing a content analysis
instrument again on the indicator of qualitative characteristics to 35 items. The independent
variables are accounting standards, law enforcement, company size and industry
classification. The results of these studies indicate a significant effect.
Martin (2002); Dechow & Skinner (2000) state that the company's internal factors
influence the presentation of financial statements related to management's accounting
policies. Their research on management accounting policies termed managerial accounting
discretion. Holthausen & Leftwich (1983), in their study, found that firm size and leverage
are two significant indicators used for accounting policy choice techniques.
Dechow and Skinner (2000) examined intrinsic factors' effect as independent
variables on financial reporting quality. This study assumes that the difference in estimation

A.S.B.L Degres. https://www.degres.be 59

degres A.S.B.L Degres
Article

made at the time of accrual formation with the realization at the time of settlement will have
an impact on future cash flows and will automatically affect earnings or financial reporting
quality, because the excess or less difference in the formation of accruals will be corrected
upon realization, consequently will reduce payments. Or increase future losses or in other
words, earnings equal cash flows plus accruals (E = CF + Accruals).
Dechow & Skinner (2000), state accrual quality as a process of systematic estimation
errors related to the company's business fundamentals. The quality of accruals is proxied by
average working capital, while the independent variable is firm characteristics (innate
factors) or company inherent factors. The results of his research, the indicators of the main
factors, namely: length of operation cycles, loss incidence, standard deviation of sales, cash
flow volatility hurt accruals quality. Athanasakou & Olsson (2012), conducted a study on
the effect of innate factors on earnings quality with corporate governance control variables.
The result is strong corporate governance when innate characteristics are weak, and earnings
quality will improve if there is corporate governance.
Different research results on both innate and managerial accounting discretion
indicate the inconsistency of research results regarding the relationship between the two
independent variables administrative-accounting preference and innate factors with the
quality of financial reporting, which is a research gap. Research on administrative-
accounting intention continues to develop, and in the recent period, it is often associated
with earnings management behaviour that occurs in companies (Dechow & Skinner, 2000;
Ghazali et al., 2015; Mohammadi & Amini, 2016). Based on this study's results, it is the first
step for researchers to carry out further research, development of independent variables that
affect the quality of financial reporting. This phenomenon and research gap, namely the
results of various studies relating to managerial accounting discretion and innate factors with
The quality of financial reporting provides room for further studies using the development of
empirical models, methodologies, and the theory used.

2. Literature Review
Agency Theory
Jensen & Meckling (1976), state that the focus of agency theory is manager
incentives such as stock options, bonuses and others, to make accounting choices without
identifying the accounting methods chosen in their suitability, but do not provide a detailed
explanation of the nature of the accounting method chosen, which is, In the end, it can affect
the company's income (profit) through the method or choice of accounting policies.
Management has its interests in maintaining its position and maximizing the compensation
received from the company. Management will always pursue its interests because
information asymmetry, where managers know more company information than
shareholders, will cause agency problems. Deegan (2004) states that the key to explaining
the adoption of accounting methods by directors comes from agency theory. This theory
explains the importance of company management in choosing specific accounting methods,
so this theory is considered necessary in developing positive accounting theory.

A.S.B.L Degres. https://www.degres.be 60

degres A.S.B.L Degres
Article

Public Interest Theory

This theory is a supporting theory associated with the many choices of accounting
methods that are determined to be management accounting policies and innate factors as
independent variables with financial reporting quality as the dependent variable. Therefore,
it is necessary to have regulations governing various accounting methods to become a set of
choices or accounting policies adopted by the company. The absence of regulators to
regulate the use of multiple accounting methods will result in the registrar to carry out
aggressive accounting treatment for their business interests, which will result in adverse
consequences for users of financial reporting. Posner, R.A (1974), states that regulation
occurs because of public demands and arises as a correction for market failures according to
public interest theory. Market failure occurs due to the suboptimal allocation of information
caused by (1) the company's reluctance to disclose information (2) misappropriation of
information, and (3) improper presentation of accounting information. This theory states that
the central authority is the regulator, and it is assumed that the public has the most
significant interest in accounting information. Regulators try to make the best possible
arrangements because it will maximize social welfare. According to Posner (1974),
regulations are public goods that provide benefits to society. Government intervention is
essential to create a regulated financial reporting environment to ensure that accurate
accounting information is offered to the market.

The Concept of Quality of Financial Reporting

The concept of financial reporting quality is used in predicting how a financial report
is judged to be of quality. Several definitions have been introduced in the accounting
literature to translate financial reporting quality. One of them is to relate it to earnings
persistence (the time sequence component of earnings). In this understanding, persistence is
if the company can maintain profits in the long run, or current earnings indicate future
earnings (Fanani, 2009). Other researchers Richardson et al. (2001), define the quality of
financial reporting as the condition when the earnings report lasts until the next period.
According to Mikhail et al. (2003), a company's past earnings are related to future cash
flows. Kirschenheiter & Melumad (2004), explain that what is meant by high-quality
financial reports is financial statements that are more informative and closer to the term
value. Length of the company.
Schipper & Vincent (2003), reveal a division of financial reporting quality widely
used in the literature. They classify financial reporting quality in four categories. The first
category is to use the concepts of persistence, variability and predictability. The second
category is the relationship between cash flow, accruals and income. Furthermore, the third
is to connect it with the qualitative concept of characteristics in the conceptual framework of
the Financial Accounting Standards Board / International Accounting Standards Board
(FASB / IASB). The fourth is implementing decisions, namely the conception of financial
reporting quality that is inversely related to the number of assessments, estimates, and
assessments when making financial statements. Rate decreases with an increase in the
number of reports that management must estimate to implement reporting standards.

A.S.B.L Degres. https://www.degres.be 61

degres A.S.B.L Degres
Article

Management of Accounting Discretion

Ghazali et al. (2015), conducted a study on the analysis of management opportunism
behaviour with a sample of public companies on the Malaysian stock exchange from 2010-
2012. Research states that management tends to regulate income to avoid loss or decrease in
its financial reporting income. Dechow & Skinner (2000); Scott et al. (2003), in their
research use another term by refining the opportunistic behaviour of management (managers
opportunistic behaviour) with the term managerial accounting discretion or management
accounting policies.
Research Ghazali et al. (2015); Dechow & Skinner (2000), have the same
understanding that earnings management is related to selecting accounting methods or
standards that will increase earnings or increase income. The selection of accounting
methods or standards is carried out by administration and is an accounting policy adopted by
company management. Management accounting policies that have been standardized by the
company are termed in this study as managerial accounting discretion. The similarity in
viewpoints between the two studies above provides an understanding that the objectives of
earnings management practices and the quality of financial reporting are ultimately the
same, that is, both aim at increasing the company's earnings or profits which are expected to
survive and the company's future cash flows as a representation of performance.
Based on the above analogy, it can be concluded that the quality of financial
reporting as the main objective of users who are compiled to follow management accounting
policies (managerial accounting discretion) is suspected of practising earnings management
(Mohammadi & Amini, 2016). Henceforth in this study, administrative-accounting
discretion is defined as an unobserved variable using leverage and firms sizes as indicators
(Ghazali et al., 2015; Dechow and Skinner, 2000; Fields et al., 2001; Habib et al., 2013).

Innate Factors
Practitioners and academics have long known from a survey report conducted by
Dichev et al. (2013), that the Chief Financial Officer estimates that inherent factors
influence about 50% of quality earnings. Still, it is also substantially influenced by earning
management. Athanasakou & Olsson (2012); Dechow & Dichev (2002); Francis et al.
(2004); Francis et al. (2005), stated that indicators representing company fundamentals and
management incentives consist of cash flow volatility, sales volatility, length of operating
cycles, the incidence of negative earnings realization, intensity intangibles, and capital
intensity. The explanations for each of these indicators are:
a. Cash flow volatility
Cash flow information can improve the comparability of the company's operating
performance reporting because it can negate using different accounting treatments on
the same transactions and events.
b. Volatility of sales
Sales volatility reflects volatility in the operating environment and deviations in
estimates and estimates related to the level of error. The sales volatility factor is one
of the determinants of financial reporting quality (Francis et al., 2004).

A.S.B.L Degres. https://www.degres.be 62

degres A.S.B.L Degres
Article

c. Length of Operation Cycles

A long operating cycle means that the quality of financial reporting is lower because
it can cause uncertainty, high estimation errors and ultimately will result in lower
quality of financial reporting (Dechow & Dichev, 2002).
d. Incidence of Negative Earnings Realization
Hayn (1995) states that losses are negative information for the owner because they
will face a liquidation option. Cohen (2003), says that losses indicate a severe
negative shock in its operating environment. Counter accounts or accruals created in
response to such surprises are likely to involve substantial estimation errors or
restructuring costs. Therefore, losses are an early indication of low financial
reporting quality.

Intangible asset intensity (intangible intensity) and capital intensity (capital intensity).
The intangible intensity and Capital Intensity were used in Athanasakou & Olsson's
research, (2012) to examine the effect of implementing corporate governance on earnings
quality. This indicator was previously used in the study by Francis et al. (2004), which
examined the relationship between cost equity and the seven attributes of earnings as a
proxy for financial reporting quality. According to their research, there is a positive
relationship between financial reporting quality and cost of equity.
Furthermore, capital intensity, or often termed capital intensity ratio, is the activity
carried out by a company associated with an investment in the form of fixed assets (capital
intensity) and inventory (inventory intensity). Capital intensity ratio can show the company's
level of efficiency in using its assets to generate sales.

Development of Research Models and Hypotheses

Mangerial
Accounting
Discretion ( X1)

Financial Reporting Quality (Y)

Innate Factors
(X2)

Figure 1: Theoretical Framework for Research

A.S.B.L Degres. https://www.degres.be 63

degres A.S.B.L Degres
Article

Leverage

Managerial
Actg
Size
Discretion
(X1)
H1 R
Cash Flow
Volatility
FR
Financial
Sales
Reporting
Volatility Quality U
(IAI 2016, IASB
2010) - Y
Length of
operation H2 C
cycles
Innate
Incidence Factors (x2)
T
of losses

Intangible
intensity

Capital
intensity

Figure 2 Complete structural relationship between research variables

H1: Managerial accounting discretion has a positive effect on the quality of financial
reporting.
H2: Inherent factors hurt the quality of financial reporting.

3. Method
The structure of the conceptual model is presented in Figure 2. This model was
developed based on an extensive literature review referring to studies conducted in the
quality of financial reporting and other relevant research results. This study's type of data is
secondary data, in quantitative form or numbers for the companies selected as the sample.
Secondary data used as a source of this data comes from annual financial reports published
by public companies listed on the Indonesia Stock Exchange from 2012 to 2016 through the
Indonesia Stock Exchange website, namely www.idx.co.id.
The population that becomes the research target is the financial reporting of all
industrial sectors listed on the Indonesia Stock Exchange (BEI). Furthermore, the selected
sample is part of the population determined based on the criteria required in the data analysis
technique using the WarpPLS 5.0 equation model. Hypothesis testing was carried out by

A.S.B.L Degres. https://www.degres.be 64

degres A.S.B.L Degres
Article

SEM-PLS using the WarpPLS version 5.0 program, because of several advantages
compared to similar software (Ghozali 2014; Sholihin & Ratmono, 2013).

4. Result and Discussion

Testing with Warp PLS 5.0
The variables used are latent variables that have a formative construct. The study
examined the relationship between managerial accounting discretion and innate factors with
the quality of financial reporting. Tests were carried out with the WarpPLS 5.0 program.
Testing with the WarpPLS 5.0 program using the Fit and Quality Indices Model, Path
coefficient and p-value. Model fit testing is used to interpret whether a model meets the
criteria—the Goodness of Fit (GoF) to detect multicollinearity problems between
independent (exogenous) variables. Warps PLS version 5.0 provides 6 indicators for model
fit criteria. Indications of the fit model used in this study based on the output of the
WrapPLS version 5.0 program are Average Path Coefficient (APC), Average R-square
(ARS), and Average Variance Inflation Factor (AVIF), Average Adjusted R-Square
(AARS), Average Full Collinearity VIF (AFVIF), and Tehnenhaus GoF (GoF). According
to Kock (2011), the first criteria for fulfilling the goodness of fit of a model is that the p-
value for APC must be significant at the level of ≤ 0.05, (p-value = 5%, Kock, 2013). The
second criterion is that the AVIF and AFVIF scores are not more than 5 (AVIF and AFVIF
≤ 5). The third criterion is that the GoF value is small > = 010, medium > = 0.25, large > =
0.36.
The model output results show the results of the "fit and quality indices", namely the
APC is significant according to the rule of thumb, namely: P-value <0.05. AVIF and AVIF
<3,3. After obtaining the fit and quality indices model, the next action is the evaluation stage
of the measurement model. As a consequence of using secondary data and latent variables
that have more than one formative indicator, it must be adjusted to the rule of thumb as
follows: (1) Statistically the indicator weight is significant, namely P <0.05 and (2) )
multicollinearity (VIF) is smaller than 3.3 (Kock, 2014; Sholihin and Ratmono, 2013;
Ghozali and Latan, 2014).
The analysis was carried out to obtain research results. The results of research with
WarpPLS 5.0 are presented in tables 5.1 and 5.2. and figure 5.1. Based on the output of the
fit and quality indices model, the APC = 0.160 with P = 0.020; ARS = 0.102 with P = 0.067;
AARS 0.086 with P = 0.088; AVIF = 1,024 ideally <= 3.3, AFVIF 1.092 ideally <= 3.3; and
GoF = 0.092. The requirement of WarpPLS 5.0 states that the P-value for APC must be less
than 0.05 (significant). AVIF and AFVIF values as indicators of multicollinearity must be
less than 5. So the conclusion is that this research model is fit.

A.S.B.L Degres. https://www.degres.be 65

degres A.S.B.L Degres
Article

Table 1 Model fit and quality indices, Path coefficients and P-Values

Model Fit and Quality Indices

APC = 0.160, P = 0.020
ARS = 0.102, P = 0.067
AARS = 0.086, P = 0.088
AVIF = 1.024, acceptable if <= 5, ideally <= 3.3
AFVIF = 1.092, acceptable if <= 5, ideally <= 3.3
GoF = 0.249, small >= 0.1, medium >= 0.25, large >= 0.36
Path (Jalur): Coeficients p - value Std-Error
MAD → FRQ -0.320 < 0.001 0.087
IF → FRQ 0.000 0.499 0.094
Total Effect Coefficients p-value total effect Std-Error total
effect
AMD → FRQ -0.320 < 0.001 0.087
IF → FRQ 0.000 0.499 0.094
Effect size Coefficient
MAD → FRQ 0.102
IF → FRQ 0.000
Source: Processed data used in this research

APC = Average Path Coefficient AVIF = Average Varian Inflation Factors

ARS = Average R-square AFVIF = Average Full Collinearity VIF
AARS = Average Adjusted R-square GoF = Tenenhaus Goodness of Fit (GoF)

MAD  Managerial Accounting Discretion

IF  Innate Factors
FRQ  Financial Reporting Quality

Table 2. R-Squared, Q squared and Full Collinearity VIF Non Moderation

MAD IF FRQ
R-Squared 0.102
Adj R-Squared (R2) 0.086
Full Collinearity VIF 1.138 1.024 1.114
Q-Squared 0.539

A.S.B.L Degres. https://www.degres.be 66

degres A.S.B.L Degres
Article

Figure 3: Warp-PLS output (MAD and IF variables)

Tables 1 and 2 show that the path coefficient and P-value of the MAD → FRQ
relationship are: - 0.320 with a P value <0.01 and significant at = 0.01, while the IF → FRQ
relationship with a coefficient: 0.000 and P value = 0.499 significant α = 0.1.
Table 2 presents R-Squared (R2), Q-Squared (Q2) and Full collinearity VIF. The
tests conducted show R2: 0.086 while Q2: 0.539, which means that this model has a relevant
predictive value because it has a Q2 above 0. While the full collinearity VIF = 1.114 is
below 3.3, indicating no multicollinearity.
The output results presented in Tables 1 and 2 show that the path coefficient and P-
value of the IF → FRQ relationship with the coefficient: 0.000 and the P-value = 0.499 are
significant α = 0.1. Thus, it was concluded that innate factors did not affect financial
reporting quality after testing (according to hypothesis 2). Simultaneously, the relationship
between MAD → FRQ is: - 0.320 with a P-value <0.01 and significant at α = 0.1. The
conclusion is that managerial accounting discretion has a negative and significant effect on
financial reporting quality. Thus it is not following hypothesis 1.
The output of the test results is presented in Table 1. and Figure 3. It proves that the
coefficient value of MAD → FRQ is negative. This test gives different results or is not
following hypothesis 1 or implies that the test results have a negative effect, so it is contrary
to agency theory.
According to the public interest theory, the role of financial accounting standards
used as a reference for each company in recording transactions is significant. Although
management can manipulate the presentation using aggressive accounting arrangements

A.S.B.L Degres. https://www.degres.be 67

degres A.S.B.L Degres
Article

according to their preferences, financial accounting standards can limit this treatment. The
application must be consistent and provide an option for each accounting treatment. The
different accounting treatment disclosed in the notes to the financial statements from time to
time will hurt the issuer's financial reporting.

Hypothesis Test
Testing the first hypothesis is that management accounting policies (managerial
accounting discretion) positively affect the quality of financial reporting (financial reporting
quality). Proof of this hypothesis is done by testing proven by the WarpPLS version 5.0
program. The results are shown in Figures 3 and Tables 1 and 2. This test is to find the value
of the fit model, path coefficient analysis and P-value.
Table 1 provides information that the fit model's criteria have been met. Namely the
APC value is below the P-value <= 0.05. The AVIF and AFVIF values <= 3.3 and the GoF
value are categorized as a medium, below 0.25. From the table, the path coefficient, which is
MAD → FRQ, results in a negative coefficient of - 0.310 and is significant with a value of p
< 0.01. Therefore it is concluded that hypothesis 1 is not proven, or it means that H0 fails to
be rejected. From these results, it can be concluded that management accounting policies
(Managerial Accounting Discretion) hurt the quality of financial reporting (Financial
Reporting Quality), with a coefficient of determination (R2): 0.10
The research question on hypothesis 2 is that Innate Factors (IF) hurt Financial
Reporting Quality (FRQ). The output results using WarpPLS 5.0. which is presented in
Figure 5.1. Table 1 and Table 2 show the IF → FRQ coefficient value results, which is
positive at 0.00, and not significant with p-value = 0.50.
Therefore the conclusion is that Innate Factors do not significantly affect Financial
Reporting Quality or contrary to the question hypothesis 2. The above description is the
basis for concluding that Ha is not proven, or H0 is successfully accepted, which means that
hypothesis 2 is not proven with the coefficient of determination (R2) of 0.10.
General conclusions in testing hypotheses to answer research questions can be seen
in table 3.

Table 3 Hypothesis Testing Results

No Hypothesis Result (Sign) P-Value Conclusion

1 Hypothesis 1 Coef: - 0.31 P < 0,01 Hypothesis
Managerial Accounting Discretion (take effect (significant) Denied
(MAD) has a positive effect on Financial negative) (not proven)
Reporting Quality (FRQ)
2 Hypothesis 2 Coef: 0.00 P = 0,50 Hypothesis
Innate Factors (IF) harm Financial (positive effect) (not Denied
Reporting Quality (FRQ) significant) (not proven)

A.S.B.L Degres. https://www.degres.be 68

degres A.S.B.L Degres
Article

5. Conclusion
This research aims to establish the extent to which the selected variable such as
managerial accounting discretion and innate factors affect financial reporting quality in
Indonesia Stock Exchange of a non-financial institution. As a result, showing that a
significant negative relationship between managerial accounting discretion to financial
reporting quality and positive but not substantial relation innate factors to financial reporting
quality or in the other word the result of the research refuse the hypothesis. This research
concluded that management's effort to create innovative accounting treatments to improve
financial reporting quality became useless in the open era due to the full disclosure of
financial report presented by management as required by Indonesian financial accounting
standards. Because of changes, management's accounting policy would attract the attention
and become questionable of the inventors due to financial reporting improvisation.
However, with this research's finding and conclusions, the following
recommendation should be highlighted that the non-financial institution in Indonesia Stock
Exchange considers using these un-observed variables in this research (managerial
accounting discretion and innate factors) benchmarks in affecting financial reporting quality.
As a matter of policy input, regulatory authorities such as Indonesian stock exchange,
investors and stakeholders should rely on and ensure to combine the data with disclosure and
innate factors. Using the combining data financial (innate factors) and non-financial
(disclosure of management policy) will allow investors and stakeholders to make decisions
and improve stakeholders' overall trust and confidence in the financial reporting quality.

References
Alves, S., & Martins, J. (2014). The Impact of Intangible Assets on Financial and
Governance Policies: A Simultaneous Equation Analysis. Journal of Applied
Finance and Banking, 4(1), 61.
Arifin, M. 2005. Tinjauan Perspektif Teori Keagenan (Agency Theory).[Speech]. Semarang:
Universitas Diponegoro.
Astami, E. W., & Tower, G. (2006). Accounting-Policy Choice and Firm Characteristics in
The Asia Pacific Region: An International Empirical Test of Costly Contracting
Theory. The International Journal of Accounting 41 (1):1-21.
Athanasakou, V., & Olsson, P. (2012). Earnings Quality, Corporate Governance, and
Earnings Quality. Unpublished working paper. http://fisher.osu.
edu/supplements/10/12906/presentationpaper_Olsson_9-5-12.pdf
Beest, F. V., Braam, G. J. M., & Boelens, S. (2009). Quality of Financial Reporting:
Measuring Qualitative Characteristics.
Braam, G., & van Beest, F. (2013). Conceptually-based financial reporting quality
assessment. An empirical analysis on quality differences between UK annual reports
and US 10-K reports Technical report, Working Paper.
Cohen, D. A. (2003). Quality of financial reporting choice: Determinants and economic
consequences.

A.S.B.L Degres. https://www.degres.be 69

degres A.S.B.L Degres
Article

Cullinan, C. P., & Bline, D. M. (2003). The Effects of Labour on Accounting Choice in
Canada. Accounting Perspectives 2 (2):135-151.
DeAngelo, H., DeAngelo, L., & Skinner, D. J. (1994). Accounting Choice in Troubled
Companies. Journal of Accounting and Economics 17 (1-2):113-143.
Dechow, P. M., & Dichev. I. D. (2002). The Quality of Accruals and Earnings: The Role of
Accrual Estimation Errors. The Accounting Review 77 (s-1):35-59.
Dechow, P. M., & Skinner, D. J. (2000). Earnings management: Reconciling The Views of
Accounting Academics, Practitioners, and Regulators. Accounting Horizons 14
(2):235-250.
Deegan, C. (2004). Financial Accounting Theory. Australia: McGraw-Hill.
Deegan, C. U. (2006). Financial Accounting Theory. Glasgow: McGraw-Hill.
DeFond, M., Hu, X., Hung, M., & Li, S. (2011). The Impact of Mandatory IFRS Adoption
on Foreign Mutual Fund Ownership: The Role of Comparability. Journal of
Accounting and Economics, 51(3), 240-258.
DeFond, M. L., & Jiambalvo, J. (1991). Incidence and circumstances of accounting errors.
Accounting Review:643-655.
Dichev, I. D., Graham, J. R., Harvey, C. R., & Rajgopal, S. (2013). Earnings Quality:
Evidence From The Field. Journal of Accounting and Economics, 56(2-3), 1-33.
Fanani, Z. (2009). Kualitas Pelaporan Keuangan: Berbagai Faktor Penentu dan Konsekuensi
Ekonomis. Jurnal Akuntansi dan Keuangan Indonesia 6 (1):20-45.
Fanani, Z., & Agustia, A. (2011). Kualitas Informasi Pelaporan Keuangan Faktor-Faktor
Penentu dan Konsekuensi Ekonominya.
Fields, T. D., Lys, T. Z., & Vincent, L. (2001). Empirical Research on Accounting
Choice. Journal of Accounting and Economics, 31(1-3), 255-307.
Francis, J., LaFond, R., Olsson, P., & Schipper, K. (2005). The Market Pricing of Accruals
Quality. Journal of Accounting and Economics, 39(2), 295-327.
Francis, J., LaFond, R., Olsson, P. M., & Schipper, K. (2004). Costs of equity and earnings
attributes. The accounting review, 79(4), 967-1010.
Ghazali, A. W., Shafie, N. A., & Sanusi, Z. M. (2015). Earnings Management: An Analysis
of Opportunistic Behaviour, Monitoring Mechanism and Financial Distress. Procedia
Economics and Finance 28:190-201.
Ghozali, I. (2011). Structural Equation Modelling Metode Alternatif Dengan Partial Least
Square (PLS). Semarang: Universitas Diponegoro Publisher.
Ghozali, I. (2014). Structural Equation Modeling: Concepts and Applications with AMOS
program 22.0. Semarang: Publisher Agency Diponegoro.
Ghozali, I., & Latan, H. (2014). Partial Least Squares Konsep, Metode dan Aplikasi
Menggunakan Program WarpPLS 4.0. Semarang: Badan Universitas Diponegoro
Publisher Agrncy.
Habib, A., Bhuiyan, B. U., & Islam, A. (2013). Financial Distress, Earnings Management
and Market Pricing of Accruals During The Global Financial Crisis. Managerial
Finance 39 (2):155-180.
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2009). Análise
multivariada de dados: Bookman Editora.

A.S.B.L Degres. https://www.degres.be 70

degres A.S.B.L Degres
Article

Hair, J. F., Ringle, C. M., & Sarstedt, M. (2013). Partial Least Squares Structural Equation
Modeling: Rigorous Applications, Better Results and Higher Acceptance. Long
Range Planning, 46(1-2), 1-12.
Hayn, C. (1995). The information content of losses. Journal of Accounting and Economics
20 (2):125-153.
Holthausen, R. W., & Leftwich, R. W. (1983). The Economic Consequences of Accounting
Choice Implications of Costly Contracting and Monitoring. Journal of Accounting
and Economics 5:77-117.
Hung, M., & Subramanyam, S. (2007). Financial Statement Effects of Adopting
International Accounting Standards: The Case of Germany. Review of Accounting
Studies 12 (4):623-657.
Indonesian of Accountant Institute (IAI), Revised (2016). Karakteristik Kualitatif Kerangka
Konseptual Pelaporan Keuangan.
Iatridis, G. (2010). International Financial Reporting Standards and the quality of financial
statement information. International Review of Financial Analysis 19 (3):193-204.
Imhoff Jr, E. A., & Lobo, G. J. (1992). The Effect of Ex Ante Earnings Uncertainty on
Earnings Response Coefficients. Accounting Review:427-439.
Indra Wijaya, K. (2007). Pidato Pengukuhan Profesor. Yogyakarta: Yogyakarta: Faculty of
Economics, Gadjah Mada University.
Inoue, T., & Thomas, W. B. (1996). The Choice of Accounting Policy in Japan. Journal of
International Financial Management & Accounting 7 (1):1-23.
Javid Hatam, A., & Masihabadi, M. (2013). Relationship Between Opportunistic
Behavioural of Managers and Earnings Quality: Tehran Stock Exchange evidence.
Jeanjean, T., & Stolowy, H. (2008). Do Accounting Standards Matter? An Exploratory
Analysis of Earnings Management Before and After IFRS Adoption. Journal of
Accounting and Public Policy 27 (6):480-494.
Jensen, M. C., & Meckling, W. H. (1976). Theory of The Firm: Managerial Behavior,
Agency Costs and Ownership Structure. Journal of Financial Economics 3 (4):305-
360.
Johnson, L. T. (2005). Relevance and Reliability. The FASB report 2.
Jonas, G. J., & Blanchet, J. (2000). Assessing Quality of Financial Reporting. Accounting
Horizons 14 (3):353-363.
Kirschenheiter, M., & Melumad, N. (2004). Earnings' Quality and Smoothing (Working
Paper). Columbia Business School.
Kock, N. (2011). Using WarpPLS in e-collaboration studies: Mediating effects, control and
second-order variables, and algorithm choices. International Journal of e-
Collaboration (IJeC), 7 (3):1-13.
Kock, N. (2014). Advanced Mediating Effects Tests, Multi-Group Analyses, and
Measurement Model Assessments in PLS-based SEM. International Journal of e-
Collaboration (IJeC) 10 (1):1-13.
Kythreotis, A. (2014). Measurement of Financial Reporting Quality Based on IFRS
Conceptual Framework's Fundamental Qualitative Characteristics. European Journal
of Accounting, Finance & Business 2 (3):4-29.
Martin, K. R. (2002). The Effect of Accounting Method Choice on Earnings Quality: A Study
of Analysts' Forecasts of Earnings and Book Value. Virginia Tech.

A.S.B.L Degres. https://www.degres.be 71

degres A.S.B.L Degres
Article

Mayangsari, S. (2003). Analisis Pengaruh Independensi, Kualitas Audit, serta Mekanisme

Corporate Governance Terhadap Integritas Laporan Keuangan. Simposium Nasional
Akuntansi VI:16-17.
Mikhail, M. B., Walther, B. R., & Willis, R. H. (2003). Reactions to Dividend Changes
Conditional on Earnings Quality. Journal of Accounting, Auditing & Finance 18 (1):
121-152.
Missonier‐Piera, F. (2004). Economic Determinants of Multiple Accounting Method
Choices in A Swiss Context. Journal of International Financial Management &
Accounting 15 (2): 118-144.
Mohammadi, F., & Amini, P. (2016). Investigating the Relationship between Financial
Distress and Earnings Management in Corporations of Accepted in Tehran Stock
Exchange. Management 3 (6): 41-50.
Mukhlasin, M. (2007). Determinan Ekonomi Pemilihan Kebijakan Akuntansi: Analisis
Single Motive dan Multiple Motive Studi Pada Perusahaan Manufaktur di Bursa
Efek Jakarta. Diponegoro University Postgraduate program.
Olsson, T. M. (2014). Productivity Loss, Victim Costs and The Intangible Costs of Crime:
Follow-Up to A Longitudinal Study of Criminal Justice System Involvement and
Costs of Women with Co-Occurring Substance Abuse and Mental Disorders in
Sweden. Mental Health and Substance Use 7 (2):102-109.
Pagalung, G. (2006). Kualitas informasi laba: Faktor-faktor Penentu dan Konsekuensi
Ekonominya. Universitas Gadjah Mada.
Pigou, A. (2017). The Economics of Welfare: Routledge.
Pigou, A. C. (2013). A Study in Public Finance: Read Books Ltd.
Posner, R. A. (1974). Theories of Economic Regulation: National Bureau of Economic
Research Cambridge, Mass., USA.
Richardson, S., Sloan, R., Soliman, M., & Tuna, A. (2001). Information in Accruals about
the Quality of Earnings.
Schipper, K., & Vincent, L. (2003). Earnings quality. Accounting Horizons 17:97-110.
Scott, T., Mannion, R., Marshall, M., & Davies, H. (2003). Does Organisational Culture
Influence Health Care Performance? A Review Of The Evidence. Journal Of Health
Services Research & Policy 8 (2):105-117.
Shehu, U. H. (2012). Firm Characteristics And Financial Reporting Quality Of Quoted
Manufacturing Firms In Nigeria. A Dissertation to the School of Postgraduate
Studies, Department of Accounting Ahmadu Bello University, Zaria.
Sholihin, M., & Ratmono, D. (2013). Analisis SEM-PLS dengan WarpPLS 3.0 untuk
Hubungan Nonlinier dalam Penelitian Sosial dan Bisnis. Yogyakarta: Andi.
Tasios, S., & Bekiaris, M. (2012). Auditor's Perceptions of Financial Reporting Quality: The
Case of Greece. International Journal of Accounting and Financial Reporting 2
(1):57.
Tsoncheva, G. (2014). Measuring and Assessing The Quality and Usefulness of Accounting
Information. Izvestiya (1):52-64.
Ulum, I. (2015). Intellectual capital disclosure: Suatu analisis dengan four way numerical
coding system. Jurnal Akuntansi dan Auditing Indonesia 19 (1):39-50.
Utama, S. (2012). Gagal di Titik Deadline: Majalah Akuntan Indonesia, 12-13.

A.S.B.L Degres. https://www.degres.be 72

degres A.S.B.L Degres
Article

Van der Meulen, S., A. Gaeremynck, dan M. Willekens. 2007. Attribute differences between
US GAAP and IFRS earnings: An exploratory study. The International Journal of
Accounting 42 (2):123-142.
Watts, R. L., & Zimmerman, J. L. (1978). Towards A Positive Theory Of The Determination
of Accounting Standards. Accounting Review:112-134.
Watts, R. L., & Zimmerman, J. L. (1979). The demand for and supply of accounting
theories: the market for excuses. Accounting Review:273-305.
Waweru, N., Prot Ntui, M. P., & M. Mangena. (2011). Determinants of Different
Accounting Methods Choice in Tanzania: A positive Accounting Theory Approach.
Journal Of Accounting in Emerging Economies 1 (2):144-159.

A.S.B.L Degres. https://www.degres.be 73