Income Smoothing Research Articles

Pengaruh Income Smoothing, Firm Size, Dan Financial Leverage, Terhadap Company Performance

Before making a decision, investors will analyze the company's performance first, one of the ratios used by investors to measure the level of success of a company's performance in assessing shares, the difficulty of investors regarding the valuation of undervalued shares, requires investors to analyze fundamentally, one of which is price to book value. PBV) which shows stock prices are categorized as expensive and cheap in buying and selling shares, investors will definitely choose cheap stocks to maximize profits (return), so the authors are interested in conducting a more in-depth empirical study of the company's performance through proxied stock valuation. with PBV and the factors that influence it. The purpose of this study was to determine the effect of income smoothing, firm size and financial leverage on company performance in the consumer goods industry sector listed on the Indonesia Stock Exchange (IDX) for the 2017-2019 period. The research method used in this research is descriptive and associative methods. The data analysis technique used is multiple linear regression analysis. The results of this study indicate that income smoothing and firm size have a positive and significant effect on company performance, while financial leverage has a negative and insignificant effect on company performance.
 
 Keywords: Income Smoothing, Firm Size, Financial Leverage, Company Performance
 

PERATAAN LABA DITINJAU DARI CASH HOLDING, PROFITABILITAS DAN UKURAN PERUSAHAAN PADA PERUSAHAAN MANUFAKTUR DI INDONESIA

The purpose of this research is to look into the impact of cash holding, profitability, and business size on income smoothing subject of this study is a manufacturing business listed on the Indonesia Stock Exchange in the products and consumption sub-sector. Purposive sampling was utilized to collect data. data-binarygistic regression is the data analysis strategy used to confirm the hypothesis is correct. The SPSS application is used to process the information. Cash holding2has a substantial2effect on income smoothing, but profitability and company size has no significant effect on income smoothing in manufacturing and consumption sub-sector companies on the Indonesia Stock Exchange, according to the results of hypothesis testing.

Organizational culture, competition and bank loan loss provisioning

This paper investigates how banks with different organizational cultures (defined as either control-dominant, collaborate-dominant, compete-dominant, create-dominant) manage their loan loss provisions (LLPs) in response to intensified industry competition. For identification, we utilize the change in state-level competition that followed the passage of the US Interstate Banking and Branching Efficiency Act (IBBEA) of 1994 as a quasi-natural experiment. We find that banks with a collaborate-dominant organizational culture are less likely to exercise discretion over LLPs. In contrast, banks with compete- and create-dominant organizational cultures are more likely to utilize discretionary LLPs when competition increases. Moreover, banks use discretionary LLPs to smooth income and signal private information to outsiders. Banks with collaborate-dominant organizational cultures exhibit less income smoothing. Counterparts with a create-dominant organizational culture use discretionary LLPs to signal information to outside stakeholders. Finally, banks with a create-dominant organizational culture are more likely to be subject to formal regulatory enforcement actions.

Threat of Exit by Non‐Blockholders and Income Smoothing: Evidence from Foreign Institutional Investors in Japan*

ABSTRACTWe examine how the threat of exit by non‐blockholders (investors with ownership <5%) relates to firms' income smoothing. Unlike informed blockholders, non‐blockholders lack private information and therefore rely more on reported accounting numbers to evaluate firm performance. To isolate the exit threat, we use the unique setting in Japan where strong firm‐centric social norms and lack of insider access lead non‐blockholding foreign institutions to influence management primarily through the threat of exit. We predict and find that foreign non‐blockholders' exit threat is positively associated with the extent of income smoothing. This effect is more pronounced for firms less embedded in Japan's stakeholder‐based system, firms with greater stock liquidity, and firms with higher US institutional ownership. In addition, smoothing associated with such an exit threat, on average, is informative. Our findings suggest that Japanese firms under non‐blockholders' exit threat increase income smoothing to reduce perceived uncertainty and that such smoothing generally meets non‐blockholders' information needs.

Transfers, Diversification and Household Risk Strategies: Can Productive Safety Nets Help Households Manage Climatic Variability?

Abstract We present experimental evidence on a programme aimed at improving households' risk management through income diversification. The intervention targeted rural Nicaraguan households exposed to weather variability and combined a one-year conditional cash transfer with vocational training or a productive investment grant. Both complementary interventions provided protection against weather shocks two years after the programme ended. Households that received the productive investment grant also had higher average consumption levels. The complementary interventions facilitated income smoothing and diversification of economic activities. Relaxing capital constraints induced investments in non-agricultural businesses, while relaxing skills constraints increased wage work and migration in response to shocks.

Income Smoothing Practices at Sharia Banks: An Overview in Islamic Business Ethics

Sharia Bank is a bank conducting its business activities based on Islamic principles. Sharia bank as an institution based on the principles of Islam are not allowed to manipulate earnings and engineering activities in any form of earnings management is no exception in terms of financial reporting, which is a medium of information for its users. Income smoothing is an act of deliberate manipulation by management to profits fluctuate, which later reported that corporate profits are at levels considered normal. The purpose of this paper is to investigate the income smoothing practices in sharia banks in Indonesia and review of income smoothing practices according to Islamic business ethics. This study used 11 sharia banks (BUS) based on BUS list on Bank Indonesia's website as research object. To know a company is included in the income smoothing group or not, the Eckel index is used. Based on calculations using Eckel index, it can be concluded that 5 out of 11 sharia banks in Indonesia are indicated to practice income smoothing. However, the annual report of the five syariah banks indicated by the practice of income smoothing indicates that all opinions given by the Sharia Supervisory Board regarding operational activities and products or services provided by sharia banks to customers generally comply with the fatwa and sharia provisions issued by DSN- MUI. That is, the policy or practice of income smoothing in Islamic banks is not contrary to the principles of sharia and Islamic business ethics.

Analisis Faktor-Faktor yang Mempengaruhi Praktik Income Smoothing

This research aims to explain the effect of board independence, profitability, leverage, firm size and managerial ownership on income smoothing of manufacturing companies listed in Indonesia Stock Exchange over the period of 2017-2020. This research used 42 companies as its samples that were selected by purposive sampling techniques with 168 data in total for four years and were analyzed using logistic regression through EViews 10 as the medium for the data processing. The data which were used in this research are secondary data obtained from the financial statements. Sample companies in this research were classified using Eckel Index into smoothed companies and non-smoothed companies. The results conclude that profitability and managerial ownership have negative impacts on the practice of income smoothing. On the other hand, board independence, leverage and firm size have no impacts on the practice of income smoothing.

Pengaruh Profitability Dan Institutional Ownership Terhadap Income Smoothing Dengan Moderasi Firm Size

The purpose of this study is to determine the effect of profitability and institutional ownership towards income smoothing practice with firm size as moderating variable in manufacturing companies listed in the Indonesia Stock Exchange from the period 2018 – 2020. This study used 72 data from manufacturing companies that have been selected using the purposive sampling method with a total of 216 data for three years. The data used are secondary data in the form of financial statements. This research used econometric views (EViews) version 12 software to process the data. The result of the research shows that return on assets has no significant effect and institutional ownership has a positive significant effect on income smoothing practice. Firm size has no significant effect on the relation of return on asset and income smoothing practice, and firm size has no significant influence on the relation of institutional ownership and income smoothing practice.

Income Smoothing and Firm Value of Quoted Non- Financial Firms in Nigeria: Moderated by Market Risk

Income Smoothing and Firm Value of Quoted Non- Financial Firms in Nigeria: Moderated by Market Risk

Income Smoothing and Firm Value of Quoted Non- Financial Firms in Nigeria: Moderated by Market Risk

Income Smoothing and Firm Value of Quoted Non- Financial Firms in Nigeria: Moderated by Market Risk

Income Smoothing and Firm Value of Quoted Non- Financial Firms in Nigeria: Moderated by Market Risk

Income Smoothing and Firm Value of Quoted Non- Financial Firms in Nigeria: Moderated by Market Risk

Determinants of bank income smoothing using loan loss provisions in the United Kingdom

PurposeThis paper examines the determinants of bank income smoothing using loan loss provisions in the United Kingdom or Great Britain from 1999 to 2017.Design/methodology/approachThe study used ordinary least square (OLS) regression and applying the HAC robust standard error correction test.FindingsThe findings showed that UK banks use loan loss provision for income smoothing purposes. Income smoothing is greater in times of high economic policy uncertainty. The extent of bank income smoothing is reduced by foreign bank presence, UK GAAP adoption, IFRS9 adoption, and high levels of voice and accountability. Also, there is reduced income smoothing using loan loss provisions during a financial crisis and in periods of economic prosperity.Research limitations/implicationsThe implication is that economic conditions, institutional governance and accounting disclosure rules can influence the extent of bank income smoothing in the United Kingdom. The findings of the study contribute to several studies that explore the determinants of bank income smoothing.Originality/valueNo study has extensively examined the determinants of bank income smoothing in Great Britain or the United Kingdom. The present study fills this gap in the literature.

Pengaruh DER, DPR, Profitability, dan Firm Size terhadap Income Smoothing

Companies operate with the aim of making a profit, by selling products (goods or services) to their customers. In addition, the company also has a specific goal, namely to maximize the welfare of shareholders and maximize profits. In line with financial theory. The purpose of this study is to discuss and analyze the effect of debt to equity ratio, dividend, payout ratio, profitability, and firm size on income smoothing. The research method used in this study is associative research method, namely research that aims to determine the influence or relationship between two or more variables looking for roles, influences, and causal relationships between independent variables and population-bound variables. listed on the BEI with data collection techniques through interviews, observations. The results of the study partially show that the four variables namely Debt to Equity Ratio, Dividend Payout Ratio, Profitability, and Firm Size have no effect on Income Smoothing. Simultaneous research results show that simultaneously Debt to Equity Ratio, Dividend Payout Ratio, Profitability, and Firm Size have no effect on Income Smoothing. The predictive ability of these four variables on Income Smoothing is known to be -0.113. How is it known that the Adjusted R Square test in this study obtained a value of -0.113, which means that the data processing test above obtained a negative Adjusted R2 value, then the Adjusted R2 value is considered zero.

Pengaruh Cash Holding, Nilai Perusahaan Dan Leverage Terhadap Income Smoothing Pada Perusahaan Manufaktur Sub Sektor Plastik Dan Kemasan Di Bursa Efek Indonesia (Bei) Tahun 2014-2018

Abstract
 The purpose of this research was to examine the influence of cash holding, firm value, and leverage on income smoothing partially and simultaneously. The population of this research was 15 hotel, restaurant, and tourism companies listed in the Indonesia Stock Exchange in the period of 2014-2018 and samples of 6 companies by using purposive sampling technique. The data were processed by using multiple linear regression analysis. The result of the research showed that first, working capital had influence positive and significant on profitability. Secondly showed that liquidity had influence positive and significant on profitability. Thirdly showed that working capital and liquidity influence significant on profitability simultaneously.

The impact of cost stickiness on financial reporting: evidence from income smoothing

AbstractThis study investigates the impact of cost stickiness on income smoothing. Prior literature at the intersection between management and financial accounting has understood changes in cost behaviour as mere consequences of short‐term earnings management incentives. By considering income smoothing as the more complex earnings management strategy, we argue that resource adjustment strategies underlying cost behaviour might also have an impact on long‐term financial reporting choices. Specifically, asymmetric reactions of costs to sales changes should increase earnings volatility and thus restrict managers’ capabilities to report smooth income streams, which is supported by our empirical results. Additional tests reveal that cost stickiness primarily restricts opportunistic income smoothing and that the relationship depends on other factors such as the level of adjustment costs.

PENGARUH KOMPENSASI BONUS DAN DIVIDEND PAYOUT RATIO TERHADAP PRAKTIK PERATAAN LABA

This study aims to determine the effect of bonus compensation and dividend payout ratio on income smoothing practices. This research is a quantitative research with an associative approach. The data testing techniques used are partial hypothesis testing (t test), simultaneous hypothesis testing (F test) and multiple linier regression analysis using SPSS software version 25. The number of samples tested in this study were 66 samples consisting of 33 companies with research period of 2 years. The data used in this research are secondary data sourced from IDX official website and official website of related companies. The results showed that partially, bonus compensation had no effect on income smoothing practices, but dividend payout ratio had a significant negative effect. Meanwhile, simultaneously, bonus compensation and dividend payout ratio have a significant effect on income smoothing practices. Based on these results, it is hoped that investor and potential investor will be more thorough in analyzing and identifying the company, and not seeing the company only by the value of dividends or the amount of profit that generated by banking companies which will later be used as investment destinations.

Pengaruh Ukuran Perusahaan Profitabilitas dan Win/Lose Stock Terhadap Income Smoothing Pada Perusahaan Jasa Yang Terdaftar Di Bursa Efek Indonesia Tahun 2015-2018

This study aims to determine the effect of company size, profitability, win / lose stock on income smoothing actions in service companies which listed on the IDX during 2015-2018. In this study using quantitative methods and data sourced from company annual reports with logistic regression analysis techniques. The results of the research in the form of variable firm size, profitability, and win / lose stock have no effect on income smoothing or income smoothing.

Pengaruh Leverage, Profitabilitas, Size, Nilai Saham, Cash Holding, dan Bonus Plan terhadap Perataan Laba

Income smoothing is one way that companies do to manipulate data. Income smoothing often occurs in companies that experience losses and report profits for the next period, so that profits will look stable for the following period and the previous period, for example in a manufacturing company in the consumer goods industry sub-sector. Internal and external parties will pay attention to several factors that affect income smoothing within the company. This study aims to analyze and examine the effect of leverage, profitability, firm size, cash holding, and bonus plan on income smoothing. The population used in this study is the consumer goods industrial sub-sector manufacturing companies listed on the Indonesia Stock Exchange (IDX) in the last five years, namely 2016-2020 with a final sample of 142. The sampling method used in this study was using atechnique. Purposive sampling. The data analysis technique uses multiple regression analysis using the SPSS 26 program. The results of this study partially explain that leverage , profitability, company size, cash holding, and bonus plans affect income smoothing, while simultaneously forvariables leverage have no effect on income smoothing., the size of the company has no effect on income smoothing, and the bonus plan has no effect on income smoothing, while the profitability variable has a positive effect and cash holding has a positive effect on income smoothing.

A Literature Review of Various Approaches, Conditions, and Factors That Become Earning Management Motives

This study aims to understand both the company's internal and external conditions that affect earnings management actions as well as approaches to earnings management. The approach in this study uses a qualitative descriptive approach. The approach used in this research is to use a literature review approach. The results show that from 10 previous studies both national and international, earning management is a manager's effort to produce financial figures that are not accurate in order for the manager's financial performance to appear good to shareholders. Earnings management is linked to one of the great theories, agency theory. Taking a bath, income minimization, income maximization, and income smoothing are four patterns of earning management that are well-known. Real earnings management and accrual earnings management are two strategies that are frequently employed in earnings management. Earning management is also influenced by the company's financial and non-financial conditions. However, several previous studies have different results with various explanations. It is known that this difference is caused by different periods, company objects and different research backgrounds.

Scandal in the Portuguese banking sector – how a banking specific earnings management model predicted the fall of a family business group

<abstract> <p>We examined the external ability of the loan loss provision (LLP) model to detect extreme cases of earnings management (EM). According to the literature, the LLP model is the most useful in examining EM in banking institutions. We used it herein to explore the time-series behaviour of a fraudulent business group in the Portuguese banking sector between 1992 and 2013 − the <italic>Banco Espírito Santo Group</italic> (GBES). We conclude that GBES did not make discretionary use of LLP (i.e., DLLP) in the fraud period (2008 to 2013) when compared with the pre-fraud years (1992 to 2007). However, the level of LLP was significantly higher in the latter period; this was consistent with the procyclical nature of GBES's LLP. The results of a difference-in-difference approach did not reveal any significant differences between GBES's DLLP and non-fraudulent banks in the fraud period. Interestingly, the full bank sample (including GBES) provided evidence of the procyclical nature of LLP. Additional tests did not support the hypothesis of income smoothing via LLP, either amongst the bank sample as a whole or by GBES. The proven facts of the fraud indicated a significant undervaluation of loans and financial instruments and an underestimation of LLP. Thus, we expected to find negative DLLP in the fraud period and significantly different DLLP between the pre-fraud period and the fraud period itself. The DLLP of GBES should also have been significantly different from non-fraudulent banks in the fraud period. The LLP model proved ineffective in detecting GBES fraud and assessing the decisions of the bank's leader and his team, while the use of DLLP was effective. The evidence collected in our study will be of benefit to scholars and banking regulators.</p> </abstract>