The influence of real and accrual earnings management on idiosyncratic risk with good corporate governance as a moderating variable

This study investigates the impact of real and accrual earnings management on idiosyncratic risk, with a focus on the moderating role of good corporate governance, proxied by managerial ownership, in manufacturing firms listed on the Indonesia Stock Exchange from 2020 to 2022. Using moderated regression analysis, the findings reveal that both real and accrual earnings management practices negatively affect idiosyncratic risk, suggesting that earnings management may serve as a risk mitigation tool under efficient contracting perspectives. However, managerial ownership exhibits divergent effects: while it strengthens the risk-reducing impact of real earnings management, it unexpectedly amplifies the idiosyncratic risk associated with accrual earnings management, potentially due to managerial motivations to meet financial targets. These results highlight the complex role of corporate governance in earnings management, as it may act as both a stabilizing and risk-amplifying factor depending on the type of earnings management practiced. The study underscores the need for stakeholders to critically evaluate earnings management and corporate governance practices, while encouraging future research to include additional variables to further explain idiosyncratic risk determinants. The study's Adjusted R Square value of 8.1% indicates that other significant factors affecting idiosyncratic risk were not captured in this analysis.

Institutions

Publication Details

Journal
Zenodo (CERN European Organization for Nuclear Research)
Published
2024-11-30
DOI
https://doi.org/10.5281/zenodo.15142499
Primary Topic
Auditing, Earnings Management, Governance
Type
article
Field-Weighted Citation Impact
0.00
Controls
|||
ALL TIME
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
article

The influence of real and accrual earnings management on idiosyncratic risk with good corporate governance as a moderating variable

Zenodo (CERN European Organization for Nuclear Research)
Auditing, Earnings Management, Governance
article

The influence of real and accrual earnings management on idiosyncratic risk with good corporate governance as a moderating variable

article en

Abstract

This study investigates the impact of real and accrual earnings management on idiosyncratic risk, with a focus on the moderating role of good corporate governance, proxied by managerial ownership, in manufacturing firms listed on the Indonesia Stock Exchange from 2020 to 2022. Using moderated regression analysis, the findings reveal that both real and accrual earnings management practices negatively affect idiosyncratic risk, suggesting that earnings management may serve as a risk mitigation tool under efficient contracting perspectives. However, managerial ownership exhibits divergent effects: while it strengthens the risk-reducing impact of real earnings management, it unexpectedly amplifies the idiosyncratic risk associated with accrual earnings management, potentially due to managerial motivations to meet financial targets. These results highlight the complex role of corporate governance in earnings management, as it may act as both a stabilizing and risk-amplifying factor depending on the type of earnings management practiced. The study underscores the need for stakeholders to critically evaluate earnings management and corporate governance practices, while encouraging future research to include additional variables to further explain idiosyncratic risk determinants. The study's Adjusted R Square value of 8.1% indicates that other significant factors affecting idiosyncratic risk were not captured in this analysis.

Zenodo (CERN European Organization for Nuclear Research)
Udayana University (ID)
Openalex Percentile: Top 43%
Auditing, Earnings Management, Governance
AI Navigator

Ask Laika to Summarize, Analyze, and Connect papers live on the map.

Summarize Papers & Methodologies

Extract key findings, datasets, and comparative methods across publications.

Benchmark Rankings & Visual Analytics

Rank top research institutions, authors, funders, topics, and journals by Field-Weighted Citation Impact (FWCI) and paper volume with instant charts.

Connect Distant Disciplines

Bridge topological clusters on the map to find hidden collaborative intersections.