scholarly journals Cost Adjustment in the Korean Defense Industry: Empirical Research on the Relation between Earnings Management and Sustainability

2019 ◽  
Vol 11 (5) ◽  
pp. 1481 ◽  
Author(s):  
Sangkyun Sohn ◽  
Joonho Park ◽  
Jinseek Lee
Keyword(s):  
Earnings Management ◽  
Indirect Costs ◽  
Defense Industry ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Cost System ◽  
The Difference ◽  
Integrated Cost ◽  
The Cost

This article is a demonstrative research on the motivation and method for earnings management in the Korean defense industry and its connection with the cost of equity capital. The data for this article comes from the Korean DICS (Defense Integrated Cost System). The difference between the cost data submitted by defense corporations and those verified by DAPA (Defense Acquisition Program Administration) serves as an indicator of earnings management; such a direct measurement of earnings management distinguishes this research from previous studies focusing on indirect indicators of earnings management, such as discretionary accruals. This article purposefully names such a specific form of earnings management as ‘cost adjustment’ that takes advantage of the difference between the submitted cost and the verified cost. The result of the research shows that cost adjustment activities in the defense industry are proportional to the capital cost required by shareholders. It is also notable that the cost adjustment activities in the defense industry are mostly done by making use of direct costs, in contrast to other industries utilizing indirect costs, which are hardly traceable. As a result of cost adjustment to meet short-term target profit, the long-term sustainability of the company would get impaired from the inflated costs in direct cost adjustments.

scholarly journals PENGARUH ASIMETRI INFORMASI DAN MANAJEMEN LABATERHADAP BIAYA MODAL EKUITAS PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA (BEI) TAHUN 2013-2015

2018 ◽  
Vol 6 (1) ◽  
Author(s):  
Yudi Partama Putra
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Stock Exchange ◽  
Equity Capital ◽  
Manufacturing Companies ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Capital Costs ◽  
The Cost ◽  
Variable Information

Yudi Partama Putra; This study aims to (1) determine the effect of asymmetry of information on costs of equity at manufacturing companies listed in Indonesia Stock Exchange period 2013-2015, (2) know the effect of earnings management on equity capital costs at manufacturing companies listed on the Stock Exchange in 2013- 2015, (3) determine the effect of information asymmetry and earnings management simultaneously on the cost of equity capital in manufacturing companies listed on the Indonesian Stock Exchange 2013-2015. The population in this study is manufacturing company listed on the Indonesia Stock Exchange. While the sample selection is taken by using purposive sampling method. The classical assumption test used in this research is using normality test, multicollinearity test, heteroscedasticity test, and autocorrelation test. Analysis of data used to test the hypothesis is multiple linear regression analysis techniques. Based on the results of the research indicate that (1) information asymmetry has positive and significant effect to cost of equity (2) earnings management has no significant effect on Cost of equity. F test results show that the variable information asymmetry and earnings management simultaneously affect the cost of equity capital. The result of determination coefficient test with R square shows that variable information asymmetry and earnings management influence cost equity capital equal 10,7%, while the rest 89,3% influenced by other variables.Key Words: Information Asymetry, Earnings Management, and Cost Of Equity.

scholarly journals PENGARUH MANAJEMEN LABA, ASIMETRI INFORMASI, DAN PENGUNGKAPAN SUKARELA TERHADAP BIAYA MODAL EKUITAS

Paradigma ◽  
2020 ◽  
Vol 17 (2) ◽  
pp. 69-88
Author(s):  
Dian Desty Widyowati
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Voluntary Disclosure ◽  
Sampling Technique ◽  
Equity Capital ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Independent Variables ◽  
The Cost ◽  
Positive Effect

The research method used multiple regression analysis. The data used are the annual financial statements of property companies listed on the Indonesia Stock Exchange 2014-2016. The sample is 87 companies with purposive sampling technique. The data is processed using SPSS (Statistical Product and Service Solution) Version 22. The results of this study indicate that earnings management has a positive effect on the cost of equity capital with a significant level of 0.000 and beta 0.712, information asymmetry has a significant effect on the cost of equity capital with a significant level of 0.087 and beta 0.139. , then voluntary disclosure has no significant effect on the cost of equity capital with a significant level of 0.955 and beta 0.004. In general, it can be concluded that earnings management has a positive effect on the cost of equity capital, while information asymmetry and voluntary disclosure have no significant effect on the cost of equity capital. Future studies consider adding other independent variables that can affect the cost of equity capital so that it can show a better correlation between the dependent and independent variables.

scholarly journals Pengaruh Siklus Hidup Perusahaan Dalam Memoderasi Hubungan Manajemen Laba Dan Cost Of Equity Capital

2019 ◽  
Vol 1 (3) ◽  
pp. 1013-1032
Author(s):  
Indri Adelina Rizal ◽  
Nurzi Sebrina
Keyword(s):  
Life Cycle ◽  
Earnings Management ◽  
Stock Exchange ◽  
Linear Regression Analysis ◽  
Equity Capital ◽  
Manufacturing Companies ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
The Cost ◽  
The Relationship

This study aims to provide empirical evidence whether earnings management can influence the cost of equity capital and whether the company's life cycle can strengthen or weaken the relationship between earnings management and the cost of equity capital. Profit Management in this study was measured using a discretionary accrual proxy. The company's life cycle is measured using the company's cash flow pattern and the cost of equity capital measured using measurements from Ohlson's (1995) model modified by Utami (2005). This study is classified as causative research. The population in this study are manufacturing companies listed on the Indonesian Stock Exchange period of 2013 to 2017.By using purposive sampling method, there were 60 companies as the research’s sample. The type of data used is secondary data obtained from www.idx.co.id. The analysis used in this study is multiple linear regression analysis. The results of this study are that earnings management has no significant positive effect on the cost of equity capital and the company's life cycle is not able to strengthen or weaken the relationship of earnings management with the cost of equity capital.

scholarly journals ANALISIS PENGARUH KUALITAS AUDIT TERHADAP MANAJEMEN LABA DAN COST OF EQUITY CAPITAL: STUDI PENDEKATAN COMPOSITE MEASURE

2017 ◽  
Vol 13 (2) ◽  
pp. 95
Author(s):  
Shelni Yuvita ◽  
Deni Darmawati
Keyword(s):  
Regression Analysis ◽  
Earnings Management ◽  
Audit Quality ◽  
Manufacturing Firms ◽  
Equity Capital ◽  
The Other ◽  
Composite Measure ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
The Cost

<p>The purpose of this study is to observe the effect of audit quality on earnings<br />management and cost of equity capital. Audit quality is measured by the<br />composite measure (variable AQMS), earnings management is measured by<br />the modified Jones model, the cost of equity capital is measured with a modified<br />Ohlson models with random walk. This study uses manufacturing firms for<br />samples during 2010-2012 by using purposive sampling and regression analysis<br />for analyst the data. The results showed that audit quality has a significant<br />effect on earnings management and cost of equity capital, while for the control<br />variables size and leverage, only leverage which has significant effect to cost of<br />equity capital, and the other has no significant effect on earnings management<br />and cost of equity capital.<br />Keywords: Audit Quality, earnings management, cost of equity capital,<br />composite measure</p>

scholarly journals PENGARUH ASIMETRI INFORMASI DAN MANAJEMEN LABA TERHADAP COST OF EQUITY CAPITAL (Studi Empiris Pada Perusahaan Food and Beverages yang terdaftar di Bursa Efek Indonesia Tahun 2015-2018)

2019 ◽  
Vol 14 (1) ◽  
pp. 1-14
Author(s):  
Rika Astutik ◽  
Dwi Cahyono ◽  
Ibna Kamelia Fiel Afroh
Keyword(s):  
Earnings Management ◽  
Information Asymmetry ◽  
Stock Exchange ◽  
Equity Capital ◽  
Analysis Method ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Food And Beverages ◽  
Independent Variable ◽  
The Cost

This study aims to examine the effect of information asymmetry and earnings management on the cost of equity capital for food and beverages companies listed on the Indonesia Stock Exchange. Objects in this study are food and beverages companies listed on the Indonesia Stock Exchange and research samples obtained by 11 companies with the study period is the financial year 2015-2018. The independent variables used are information asymmetry and earnings management, while the dependent variable is cost of equity capital. Data analysis method is done by using multiple regression calculation to test the influence of independent variable to dependent variable. The result of the research indicates that information asymmetry is not influence significantly and earnings management is influence significantly to cost of equity capital.

Executive Pay Disparity and the Cost of Equity Capital

2013 ◽  
Vol 48 (3) ◽  
pp. 849-885 ◽  
Author(s):  
Zhihong Chen ◽  
Yuan Huang ◽  
K. C. John Wei
Keyword(s):  
Positive Association ◽  
Chief Executive ◽  
Equity Capital ◽  
Free Cash Flow ◽  
Cost Of Equity Capital ◽  
Cost Of Equity ◽  
Executive Pay ◽  
Pay Disparity ◽  
The Difference ◽  
The Cost

AbstractExecutive pay disparity, as measured by chief executive officer (CEO) pay slice (CPS), is positively associated with the implied cost of equity, even after controlling for other determinants of the cost of equity. The difference in the cost of equity can explain 43% of the difference in the valuation effect attributable to CPS reported by Bebchuk, Cremers, and Peyer (2011). Further analysis shows that the positive association is stronger when agency problems of free cash flow are more severe and when CEO succession planning is more important. Our evidence suggests that a large CPS is associated with CEO entrenchment and high succession risk.

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