KUALITAS INFORMASI AKUNTANSI SEKTOR INDUSTRI SEBELUM DAN SELAMA PANDEMI COVID-19: STUDI NEGARA-NEGARA ASEAN
QUALITY OF ACCOUNTING INFORMATION IN THE INDUSTRIAL SECTOR BEFORE AND DURING THE COVID-19 PANDEMIC: A STUDY OF ASEAN COUNTRIES
Keywords:
Covid-19, ASEAN, accounting information quality, accruals quality, value relevance
Abstract
The purpose of this paper is to examine the effect of the Covid-19 pandemic on the quality of accounting information in terms of accrual quality and value relevance. This study uses a sample of companies listed on stock exchanges in five ASEAN countries, Indonesia, Malaysia, the Philippines, Singapore, and Thailand, for the period 2009-2020. OLS pooled regression model was estimated with panel data. The results showed that the COVID-19 pandemic impacted earnings quality, but not on value relevance of accounting information quality. Enforcement of accounting and auditing standards can reduce the impact of the COVID-19 pandemic in improving earnings quality. However, investor protection is not adequate to improve the quality of accounting information during the COVID-19 pandemic.
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References
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Choi, J.-H., & Wong, T. J. (2007). Auditors’ governance functions and legal environments: An international investigation. Contemporary Accounting Research, 24(1), 13–46.
Choi, T. H., & Pae, J. (2011). Business Ethics and Financial Reporting Quality: Evidence from Korea. Journal of Business Ethics, 103(3), 403–427. https://doi.org/10.1007/s10551-011-0871-4
Cimini, R. (2015). How has the financial crisis affected earnings management? A European study. Applied Economics, 47(3), 302–317.
Cressey, D. R. (1950). The criminal violation of financial trust. American Sociological Review, 15(6), 738–743.
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Dichev, I. D., & Tang, V. W. (2009). Earnings volatility and earnings predictability. Journal of Accounting and Economics, 47(1–2), 160–181.
Fernandes, N., & Ferreira, M. A. (2008). Does international cross-listing improve the information environment. Journal of Financial Economics, 88(2), 216–244.
Flores, E., Weffort, E. F. J., da Silva, A. F., & Carvalho, L. N. G. (2016). Earnings management and macroeconomic crises: Evidences from Brazil and USA capital markets. Journal of Accounting in Emerging Economies.
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Hribar, P., & Collins, D. W. (2002). Errors in estimating accruals: Implications for empirical research. Journal of Accounting Research, 40(1), 105–134.
Hung, M. (2000). Accounting standards and value relevance of financial statements: An international analysis. Journal of Accounting and Economics, 30(3), 401–420.
Kim, J. W., & Shi, Y. (2011). Voluntary disclosure and the cost of equity capital: Evidence from management earnings forecasts. Journal of Accounting and Public Policy, 30(4), 348–366.
Kousenidis, D. V, Ladas, A. C., & Negakis, C. I. (2013). The effects of the European debt crisis on earnings quality. International Review of Financial Analysis, 30, 351–362.
Leuz, C., Nanda, D., & Wysocki, P. D. (2003). Earnings management and investor protection: An international comparison. Journal of Financial Economics, 69, 505–527. https://doi.org/10.4324/9780203940136
McNichols, M. F. (2002). The quality of accruals and earnings: The role of accrual estimation errors. The Accounting Review, 77(SUPPL.), 61–69. https://doi.org/10.2308/accr.2002.77.s-1.35
Ohlson, J. A. (1995). Earnings, book values, and dividends in equity valuation. Contemporary Accounting Research, 11(2), 661–687.
Palma-Ruiz, J. M., Castillo-Apraiz, J., & Gómez-Mart\’\inez, R. (2020). Socially responsible investing as a competitive strategy for trading companies in times of upheaval amid COVID-19: Evidence from Spain. International Journal of Financial Studies, 8(3), 41.
Persakis, A., & Iatridis, G. E. (2015). Earnings quality under financial crisis: A global empirical investigation. Journal of Multinational Financial Management, 30, 1–35. https://doi.org/10.1016/j.mulfin.2014.12.002
Persakis, A., & Iatridis, G. E. (2016). Audit quality, investor protection and earnings management during the financial crisis of 2008: An international perspective. Journal of International Financial Markets, Institutions and Money, 41, 73–101.
Persakis, A., & Iatridis, G. E. (2017). The joint effect of investor protection, IFRS and earnings quality on cost of capital: An international study. Journal of International Financial Markets, Institutions and Money, 46, 1–29. https://doi.org/10.1016/j.intfin.2016.10.001
Porta, R. La, Lopez-De-Silanes, F., Shleifer, A., & Vishny, R. W. (1998). Law and Finance. Journal of Political Economy, 106(6), 1113–1155. http://www.journals.uchicago.edu/t-and-c
Rababah, A., Al-Haddad, L., Sial, M. S., Chunmei, Z., & Cherian, J. (2020). Analyzing the effects of COVID-19 pandemic on the financial performance of Chinese listed companies. Journal of Public Affairs, 20(4), e2440.
Schuchter, A., & Levi, M. (2016). The fraud triangle revisited. Security Journal, 29(2), 107–121.
Shen, H., Fu, M., Pan, H., Yu, Z., & Chen, Y. (2020). The impact of the COVID-19 pandemic on firm performance. Emerging Markets Finance and Trade, 56(10), 2213–2230.
Silva, A. F. da, Weffort, E. F. J., Flores, E. da S., & Silva, G. P. da. (2014). Earnings management and economic crises in the Brazilian capital market. Revista de Administração de Empresas, 54, 268–283.
Wijayana, S., & Gray, S. J. (2018). Institutional Factors and Earnings Management in the Asia ‑ Pacific : Is IFRS Adoption Making a Difference ? Management International Review, 59(2), 307–334. https://doi.org/10.1007/s11575-018-0371-1
Ali, S. H., Foreman, J., Capasso, A., Jones, A. M., Tozan, Y., & DiClemente, R. J. (2020). Social media as a recruitment platform for a nationwide online survey of COVID-19 knowledge, beliefs, and practices in the United States: methodology and feasibility analysis. BMC Medical Research Methodology, 20, 1–11.
Ball, R., Robin, A., & Wu, J. S. (2003). Incentives versus standards: Properties of accounting income in four East Asian countries. Journal of Accounting and Economics. https://doi.org/10.1016/j.jacceco.2003.10.003
Barth, M. E., Beaver, W. H., & Landsman, W. R. (1998). Relative valuation roles of equity book value and net income as a function of financial health. Journal of Accounting and Economics, 25(1), 1–34.
Bhattacharya, N., Black, E. L., Christensen, T. E., & Larson, C. R. (2003). Assessing the relative informativeness and permanence of pro forma earnings and GAAP operating earnings. Journal of Accounting and Economics, 36(1–3), 285–319.
Brown, P., Preiato, J., & Tarca, A. (2014). Measuring Country Differences in Enforcement of Accounting Standards: An Audit and Enforcement Proxy. Journal of Business Finance and Accounting, 41(1–2), 1–52. https://doi.org/10.1111/jbfa.12066
Burgstahler, D., & Dichev, I. (1997). Earnings management to avoid earnings decreases and losses. Journal of Accounting and Economics, 24(1), 99–126.
Chen, L., Krishnan, G. V., & Yu, W. (2018). The relation between audit fee cuts during the global financial crisis and earnings quality and audit quality. Advances in Accounting, 43(July), 14–31. https://doi.org/10.1016/j.adiac.2018.07.007
Chintrakarn, P., Jiraporn, P., & Kim, Y. S. (2018). Did firms manage earnings more aggressively during the financial crisis? International Review of Finance, 18(3), 477–494.
Choi, J.-H., Kim, J.-B., & Lee, J. J. (2011). Value relevance of discretionary accruals in the Asian financial crisis of 1997--1998. Journal of Accounting and Public Policy, 30(2), 166–187.
Choi, J.-H., & Wong, T. J. (2007). Auditors’ governance functions and legal environments: An international investigation. Contemporary Accounting Research, 24(1), 13–46.
Choi, T. H., & Pae, J. (2011). Business Ethics and Financial Reporting Quality: Evidence from Korea. Journal of Business Ethics, 103(3), 403–427. https://doi.org/10.1007/s10551-011-0871-4
Cimini, R. (2015). How has the financial crisis affected earnings management? A European study. Applied Economics, 47(3), 302–317.
Cressey, D. R. (1950). The criminal violation of financial trust. American Sociological Review, 15(6), 738–743.
Davis-Friday, P. Y., Eng, L. L., & Liu, C.-S. (2006). The effects of the Asian crisis, corporate governance and accounting system on the valuation of book value and earnings. The International Journal of Accounting, 41(1), 22–40.
Dechow, P. M., & Dichev, I. D. (2002). The quality of accruals and earnings: The role of accrual estimation errors. Accounting Review, 77(SUPPL.), 35–59. https://doi.org/10.2308/accr.2002.77.s-1.61
DeFond, M. L., & Park, C. W. (1997). Smoothing income in anticipation of future earnings. Journal of Accounting and Economics, 23(2), 115–139.
Dichev, I. D., & Tang, V. W. (2009). Earnings volatility and earnings predictability. Journal of Accounting and Economics, 47(1–2), 160–181.
Fernandes, N., & Ferreira, M. A. (2008). Does international cross-listing improve the information environment. Journal of Financial Economics, 88(2), 216–244.
Flores, E., Weffort, E. F. J., da Silva, A. F., & Carvalho, L. N. G. (2016). Earnings management and macroeconomic crises: Evidences from Brazil and USA capital markets. Journal of Accounting in Emerging Economies.
Francis, J, Olsson, P., & Schipper, K. (2006). Earnings quality. Foundation and Trends in Accounting 1 (4): 259--340.
Francis, Jennifer, LaFond, R., Olsson, P. M., & Schipper, K. (2004). Costs of Equity and Earnings Attributes. Accounting Review, 79(4), 967–1010. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=14897242&site=ehost-live
Graham, R., King, R., & Bailes, J. (2000). The value relevance of accounting information during a financial crisis: Thailand and the 1997 decline in the value of the baht. Journal of International Financial Management and Accounting, 11(2), 84–107. https://doi.org/10.1111/1467-646X.00057
Haroon, O., & Rizvi, S. A. R. (2020). COVID-19: Media coverage and financial markets behavior—A sectoral inquiry. Journal of Behavioral and Experimental Finance, 27, 100343.
Hribar, P., & Collins, D. W. (2002). Errors in estimating accruals: Implications for empirical research. Journal of Accounting Research, 40(1), 105–134.
Hung, M. (2000). Accounting standards and value relevance of financial statements: An international analysis. Journal of Accounting and Economics, 30(3), 401–420.
Kim, J. W., & Shi, Y. (2011). Voluntary disclosure and the cost of equity capital: Evidence from management earnings forecasts. Journal of Accounting and Public Policy, 30(4), 348–366.
Kousenidis, D. V, Ladas, A. C., & Negakis, C. I. (2013). The effects of the European debt crisis on earnings quality. International Review of Financial Analysis, 30, 351–362.
Leuz, C., Nanda, D., & Wysocki, P. D. (2003). Earnings management and investor protection: An international comparison. Journal of Financial Economics, 69, 505–527. https://doi.org/10.4324/9780203940136
McNichols, M. F. (2002). The quality of accruals and earnings: The role of accrual estimation errors. The Accounting Review, 77(SUPPL.), 61–69. https://doi.org/10.2308/accr.2002.77.s-1.35
Ohlson, J. A. (1995). Earnings, book values, and dividends in equity valuation. Contemporary Accounting Research, 11(2), 661–687.
Palma-Ruiz, J. M., Castillo-Apraiz, J., & Gómez-Mart\’\inez, R. (2020). Socially responsible investing as a competitive strategy for trading companies in times of upheaval amid COVID-19: Evidence from Spain. International Journal of Financial Studies, 8(3), 41.
Persakis, A., & Iatridis, G. E. (2015). Earnings quality under financial crisis: A global empirical investigation. Journal of Multinational Financial Management, 30, 1–35. https://doi.org/10.1016/j.mulfin.2014.12.002
Persakis, A., & Iatridis, G. E. (2016). Audit quality, investor protection and earnings management during the financial crisis of 2008: An international perspective. Journal of International Financial Markets, Institutions and Money, 41, 73–101.
Persakis, A., & Iatridis, G. E. (2017). The joint effect of investor protection, IFRS and earnings quality on cost of capital: An international study. Journal of International Financial Markets, Institutions and Money, 46, 1–29. https://doi.org/10.1016/j.intfin.2016.10.001
Porta, R. La, Lopez-De-Silanes, F., Shleifer, A., & Vishny, R. W. (1998). Law and Finance. Journal of Political Economy, 106(6), 1113–1155. http://www.journals.uchicago.edu/t-and-c
Rababah, A., Al-Haddad, L., Sial, M. S., Chunmei, Z., & Cherian, J. (2020). Analyzing the effects of COVID-19 pandemic on the financial performance of Chinese listed companies. Journal of Public Affairs, 20(4), e2440.
Schuchter, A., & Levi, M. (2016). The fraud triangle revisited. Security Journal, 29(2), 107–121.
Shen, H., Fu, M., Pan, H., Yu, Z., & Chen, Y. (2020). The impact of the COVID-19 pandemic on firm performance. Emerging Markets Finance and Trade, 56(10), 2213–2230.
Silva, A. F. da, Weffort, E. F. J., Flores, E. da S., & Silva, G. P. da. (2014). Earnings management and economic crises in the Brazilian capital market. Revista de Administração de Empresas, 54, 268–283.
Wijayana, S., & Gray, S. J. (2018). Institutional Factors and Earnings Management in the Asia ‑ Pacific : Is IFRS Adoption Making a Difference ? Management International Review, 59(2), 307–334. https://doi.org/10.1007/s11575-018-0371-1
Published
2021-07-30
How to Cite
Sugiri, S., & Susilowati, R. Y. (2021, July 30). KUALITAS INFORMASI AKUNTANSI SEKTOR INDUSTRI SEBELUM DAN SELAMA PANDEMI COVID-19: STUDI NEGARA-NEGARA ASEAN. Jurnal Akuntansi Dan Keuangan (JAK), 26(2), 158-165. https://doi.org/https://doi.org/10.23960/jak.v26i2.274
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