Managerial Ability And Earnings Management: Moderating Role Of Risk-Taking Behavior

Sulhendri; Alex Johanes Simamora; Nicko Albart; Sri Adella Fitri; Listiana Sri Mulatsih

doi:10.24912/ja.v28i2.2139

Authors

Sulhendri Department of Accounting, Faculty of Economic and Business, Muhammadiyah University of Jakarta, South Tanggerang
Alex Johanes Simamora Department of Accounting, Faculty of Economic, Tidar University, Magelang
Nicko Albart University Paramadina, Jakarta
Sri Adella Fitri UIN Mahmud Yunus Batusangkar
Listiana Sri Mulatsih University Bung Hatta

DOI:

https://doi.org/10.24912/ja.v28i2.2139

Keywords: Managerial Ability; Accruals Earnings Management; Real Earnings Management, Risk-Taking Behavior.

Abstract

Examining how risk-taking behaviour affects managerial skills and earnings management is the goal of this study. The study's sample consists of 846 manufacturing companies listed on the Indonesian Stock Exchange between 2008 and 2018. Data envelopment analysis is a proxy for managerial skill. Accruals and actual earnings management are two aspects of earnings management. The firm fixed-effect regression is used in data analysis. The influence of managerial skills on earnings management is mitigated by risk-taking behaviour. Capable managers are more likely to use their propensity for risk-taking to manipulate earnings. Capable managers respond to earnings volatility resulting from risk-taking by implementing earnings management strategies. This study closes the gap left by earlier research and offers fresh proof of risk-taking behaviour that helps identify situations where managers use their expertise to control profits.

Author Biographies

Sulhendri, Department of Accounting, Faculty of Economic and Business, Muhammadiyah University of Jakarta, South Tanggerang

sulhendri@umj.ac.id

Alex Johanes Simamora, Department of Accounting, Faculty of Economic, Tidar University, Magelang

alexjohanessimamora@untidar.ac.id

Nicko Albart, University Paramadina, Jakarta

nicko.albart@paramadina.ac.id

Sri Adella Fitri, UIN Mahmud Yunus Batusangkar

sri.af@uinmybatusangkar.ac.id

Listiana Sri Mulatsih, University Bung Hatta

listiana@bunghatta.ac.id

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