The effect of financial distress using the Altman and Springate Models on stock return in mediated earnings management
A study on textile and garment companies listed on the Indonesia Stock Exchange 2015-2019 period
DOI:
https://doi.org/10.20525/ijrbs.v10i5.1279Keywords:
Financial distress, earnings management, stock returnsAbstract
This study aims to examine and analyze the effect of financial distress with the Altman and Springate Models on stock returns either directly or indirectly by involving earnings management as a mediation. This study uses secondary data from Textile and Garment Companies listed on the Indonesia Stock Exchange from 2015-2019, with a sample of 20 companies using sampling so that 100 observations are obtained. The data is obtained from the annual financial statements. The data analysis technique used SEM-PLS with the help of WarpPLS 6.0 software. The results of the study provide empirical evidence that financial distress has a positive effect on earnings management, while financial distress and earnings management has a negative effect on stock returns. Earnings management is able to mediate the effect of financial distress on stock returns.
Downloads
References
Bauer, J., & Agarwal, V. (2012). Distress Risk and Stock Returns?: The neglected Profitability Effect. 40.
Brigham, E. F. dan J. F. H. (2014). Dasar-Dasar Manajemen Keuangan (11th ed.). Salemba Empat.
Edi, E., & Tania, M. (2018). Ketepatan Model Altman, Springate, Zmijewski, Dan Grover Dalam Memprediksi Financial Distress. Jurnal Reviu Akuntansi Dan Keuangan, 8(1), 79. https://doi.org/10.22219/jrak.v8i1.28
Feren dan Nurainun Bangun. (2019). Pengaruh Interest Rate, Investor Sentiment, Financial Distress Terhadap Stock Return. Jurnal Multiparadigma Akuntansi, 1(4), 1152–1160.
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(April), 190–201. https://doi.org/10.1016/s2212-5671(15)01100-4
Graham, J. R., Harvey, C. R., & Rajgopal, S. (2005). The economic implications of corporate financial reporting. Journal of Accounting and Economics, 40(1–3), 3–73. https://doi.org/10.1016/j.jacceco.2005.01.002
H.Meckling, M. C. J. and W. (1976). Theory Of The Firm: Managerial Behavior, Agency Costs And Ownership Structure. Human Relations, 3, 305–360.
Habib, A., Uddin Bhuiyan, B., & Islam, A. (2013). Financial distress, earnings management and market pricing of accruals during the global financial crisis. Managerial Finance, 39(2), 155–180. https://doi.org/10.1108/03074351311294007
Hackbarth, D., Haselmann, R., & Schoenherr, D. (2015). Financial distress, stock returns, and the 1978 bankruptcy reform act. Review of Financial Studies, 28(6), 1810–1847. https://doi.org/10.1093/rfs/hhv009
Halim, D. A., & Atmadja, A. S. (2017). Pengaruh Earnings Management terhadap Stock Returns pada Perusahaan LQ45. Business Accounting Review, 5(2), 685–696.
Hartono, J. (2013). Teori Dan Analisis Investasi (8th ed.). BPFE: Yogyakarta.
Hartono, J. (2017). Teori Portofolio Dan Analisis Investasi (11th ed.). BPFE: Yogyakarta.
Istiqomah, A., & Adhariani, D. (2017). Pengaruh Manajemen Laba terhadap Stock Return dengan Kualitas Audit dan Efektivitas Komite Audit sebagai Variabel Moderasi. Jurnal Akuntansi Dan Keuangan, 19(1), 1–12. https://doi.org/10.9744/jak.19.1.1-12
Karina, R. (2018). The Effect Of Financial Distress And Audit Quality On Earnings Management. Global Financial Accounting Journal, 2(1), 63–70.
Kartikasari, K., & Hariyani, D. S. (2019). Ketepatan Model Prediksi Financial Distress Pada Perusahaan Retail Di Indonesia. Jurnal Nusantara Aplikasi Manajemen Bisnis, 4(2), 117–127. https://doi.org/10.29407/nusamba.v4i2.12651
Miftaqul Risqi, D. S. (2019). Pengaruh Financial Distress, Aktivitas Operasional, Dan Profitabilitas. Jurnal Ekonomi Akuntansi, 4(1), 23–36.
Nazalia, N., & Triyanto, D. N. (2018). Pengaruh Free Cash Flow, Financial Distress, Dan Employee Diff Terhadap Manajemen Laba. Jurnal Akuntansi, Auidt Dan Sistem Informasi Akuntansi, 2(3), 93–104.
Ni Nyoman Erni Yanuar Paramita, Edy Sujana, dan N. T. H. (2017). Pengaruh Financial Distress, Risiko Litigasi dan Pengungkapan Corporate Social Responsibility terhadap Manajemen Laba (Studi Empiris pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia Periode 2014-2016). E-Journal Akuntansi, 8(2), 1–11.
Ni Putu Ayu Desy Indrayanti, dan M. G. W. (2017). Pengaruh Menajemen Laba Pada Return Saham Dengan Kualitas Audit Dan Corporate Governance Sebagai Variabel Pemoderasi. E-Jurnal Akuntansi, 20(3), 1762–1790.
Puspita, I. L. (2017). Effect Of Earnings Management On The Market Reaction With Managerial Ownership As Variable Moderation. Jurnal Ilmiah GEMA EKONOMI, 7(1), 1013–1030.
Ranjbar, S., & Amanollahi, G. F. (2018). The effect of financial distress on earnings management and unpredicted net earnings in companies listed on Tehran Stock Exchange. Management Science Letters, 8(9), 933–938. https://doi.org/10.5267/j.msl.2018.6.015
Roychowdhury, S. (2006). Earnings management through real activities manipulation. Journal of Accounting and Economics, 42(3), 335–370. https://doi.org/10.1016/j.jacceco.2006.01.002
Scott W.R. (2015). Financial Accounting Theory (7th ed.). Prentice-Hall International Inc.
Supriati, D., Bawono, I. R., & Anam, K. C. (2019). Analisis Perbandingan Model Springate, Zmijewski, Dan Altman Dalam Memprediksi Financial Distress Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia. Journal of Business Administration, 3(2), 258–270.
Tandelilin, E. (2010). Portofolio dan Investasi (1st ed.).
Wieta Chairunesia, Putri Renalita Sutra, dan S. M. W. (2018). Pengaruh Good Corporate Governance Dan Financial Distress Terhadap Manajemen Laba Pada Perusahaan Yang Masuk Dalam ASEAN corporate governance scorecard. 11(2), 232–250.
Yusrianti, H., & Satria, A. (2014). Pengaruh Manajemen Laba (Earning Management) Terhadap Return Saham Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia. Jurnal Ilmiah Bisnis Dan Terapan, 11(1), 1–18.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Faradisa Bachmid, Sumiati, Siti Aisjah
This work is licensed under a Creative Commons Attribution 4.0 International License.
For all articles published in IJRBS, copyright is retained by the authors. Articles are licensed under an open access Creative Commons CC BY 4.0 license, meaning that anyone may download and read the paper for free. In addition, the article may be reused and quoted provided that the original published version is cited. These conditions allow for maximum use and exposure of the work, while ensuring that the authors receive proper credit.
