The Effects of Earnings Management and Audit Quality on Cost of Equity Capital: Empirical Evidence from Indonesia

• 발행기관: 한국유통과학회
• 저자명: Maria Goreti Kentris INDARTI Jacobus WIDIATMOKO
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.4, 769~776쪽, 전체 8쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.04.30

영문 초록

The focus of this study is to investigate the effect of earnings management and audit quality on the cost of equity capital and also examines whether audit quality acts as a moderating variable for the effect of earnings management on the cost of equity capital. The population in this study are companies from the consumer goods industry sector listed on the Indonesia Stock Exchange (IDX) during the 2016–2018 period. This sector was chosen because it is a sector that is able to survive in conditions of economic decline, so it becomes a good investment opportunity in the future. The sample selection was carried out using purposive sampling technique. By using the Moderated Regression Analysis (MRA) technique, the results show that earnings management has a positive effect on the cost of equity capital. Conversely, companies with good audit quality will bear lower cost of equity capital. The moderating hypothesis test results show that audit quality moderates the effect of earnings management on the cost of equity capital. This means that, even though the company carries out earnings management, investors have more confidence in the results of audits conducted by qualified auditors so that the cost of equity capital is low.

목차

1. Introduction

2. Literature Review and Hypothesis Development

3. Research Methods

4. Results and Discussion

5. Conclusion

키워드

Earnings Management Audit Quality Cost of Equity Capital Moderated Regression Analysis