THE INFLUENCE OF TAX-DEFERRED TOWARD EARNINGS MANAGEMENT - Digital Library Universitas Muhammadiyah Purwokerto

  

THE INFLUENCE OF TAX-DEFERRED TOWARD EARNINGS

MANAGEMENT

Ani Kusbandiyah¹, Rina Mudjiyanti²,

  

¹Program Studi Akuntansi, Fakultas Ekonomi dan Bisnis

Universitas Muhammadiyah Purwokerto,

email: ani.kusbandiyah@yahoo.com

²Program Studi Akuntansi, Fakultas Ekonomi dan Bisnis

  

Universitas Muhammadiyah Purwokerto,

email: rinamudjiyanti@ump.ac.id

ABSTRACT

  This research aims to obtain empirical evidence of whether there is a positive influence Assets tax-deferred and Acrual toward earnings management Research data are secondary data form of financial statements information property companies, real estate and construction of buildings that are listed in the Indonesia stock exchange publish their financial report period 2009 – 2013.

  The results of this study concluded that the assets tax-deferred positive influence toward earnings management on company property, real estate and construction of buildings that are listed on the Indonesia stock exchange, indicated significant value of 0.011 less than 0.05. Accrual and have no positive effect toward earnings management on property companies, real estate and construction of buildings that are listed on the Indonesia stock exchange, indicated significant value of 0.197 more than 0.05

  Keywords— Tax-Deferred Interest Assets, Accrual

INTRODUCTION I.

  The financial statements are prepared by management aiming to convey information about the company's financial and economic conditions at certain periods. The problem that then arises is a matter for the Agency, because corporate management tend to provide positive information to the market about companies . Therefore, the Manager of the company then wishes to raise profits reported to shareholders and other external users. A lot of managers who take advantage of opportunities to re-engineer earnings management in his company with engineering accrual to influence the outcome of decisions, among other things the existence of bonuses and motivation are considered better performance by minimizing the burden of income tax to be paid by the company (Suranggane, 2007).

  Tax-deferred assets occurs when the accounting profit is less than the fiscal profit due to temporary differences. Small accounting profit more than fiscal profit resulting in the company can defer taxes payable in the coming period. If the fiscal profit not likely available in adequate quantities to be compensated with the balance of the fiscal loss can be compensated, or the possible existence of the realization of tax benefits in the future with a probability of less than 50% (Kiswara, 2007), then the tax-deferred assets not recognised and the company will record a reserve assets tax-deferred

  The relationship between the assets tax-deferred and accrual in detecting behavior of the management is to maximise the profit bonuses they get with reverse accrual figures and try to minimize the taxes they have to pay, by way of boost accrual to make lower profit figures. Recognition of tax-deferred interest can lead to increased or decreased net income due to the recognition of the burden of tax-deferred interest tax-deferred interest burden or benefit.

  Recognition of assets and tax-deferred interest is based on the fact of the possibility of the payment of taxes in the coming period becomes larger or smaller. This is a loophole for for management to manipulate the amount of profit a white garment so it can minimize the amount of tax to be paid.

  This research refers to research conducted by the Widiastuti & Elsa Chusniah (2011) the analyzing about the assets tax-deferred interest and accrual earnings management as the Predictor. From the results of research that has been done, it can be seen that the assets tax-deferred interest accrual and a positive and significant effect against the probability of profit management companies do to avoid losses.

LITERATURE REVIEW II.

  A. Agency Theory

  Agency theory assumes that all individuals are acting for their own interests. The agent will receive the satisfaction of not only financial compensation but also additional involved from an agency relationship. Principal others are only interested in financial return from their investment in a company. This indicates that earnings management practices influenced by the presence of a conflict of interest between agent with the principal that arise when each party is trying to achieve or maintain a desirable level of prosperity (Djamaluddin, 2008). The existence of differences of interest triggering agent to think about how the accounting numbers generated can further maximize the importance. How agents can do to affect the numbers of accounting can be done by way of a reverse engineer or perform management profit profits in the financial statements.

  B. Earnings Management

  Occur against earnings management practices resulting in up to this point there has been no agreement on the definition of earnings management (Sulistyanto, 2008). Some perceive that earnings management as an act of cheating because of trying to trick financial statements user. Meanwhile others assess the management profit as a reasonable activity do managers in drawing up the financial statements, while still within the scope of the principle of accounting.

  Earnings management will be given the code 1 If included in the group small profit firms and given the code 0 If included in the group small loss firm. According to Phillips, Pincus and Rego (2003) companies that are on the range 0 – 0,06 categorized as small profit firms, While the company is in the range -0,09 – 0 categorized as small loss firms.

  C. Tax-Deferred Assets

  Tax-deferred in principle is the impact of income tax in the future caused by the temporary difference (time) between the accounting and tax treatment as well as fiscal losses can still be compensated in the future that need to be presented in the financial statements in a given period (Widiastuti& Elsa Chusniah, 2011).

  Tax-deferred assets is the result of a positive correction which caused the positive difference between the accounting profit with fiscal earnings. If the amount of tax-deferred assets getting bigger then the higher management they do earnings management (Pindiharti, 2011).

  D. The Accrual Basis Of Accounting

  The accrual basis accounting transaction measurement can be distinguished into two, namely:

  1. Non Discretionary Accrual Non discretionary accrual the accrual basis is non-free and to give an indication of

  measurements that meet the concept of matching cost with revenue in the financial statements because of financial transactions and events recognised at the time of the incident (and not at the time of cash or cash equivalents received or paid). These transactions are recorded in the accounting records and reported in the financial statements in the period in question (IAI, 2010).

  2. Discretionary Accrual Discretionary accrual the accrual is the load and can be a way to reduce or increase reporting

  profits that are difficult to detect due to its konstektual and subjective (Suranggane, 2007).

RESEARCH METHODOLOGY

A. Populations and Samples

  The population used in this research are companies listed on the Indonesia stock exchange period 2009-2013. The sample used in this study are property companies, real estate and construction of buildings that are listed on the Indonesia stock exchange in 2009 – 2013. Sampling using a purposive sampling method with the following criteria: 1.

  Property companies, real estate and construction of buildings that are listed on the Indonesia stock exchange during the period 2009 – 2013.

B. Analysis Methods

  3 The company publishes the annual report is not audited by independent auditors .

  2 The company's delisting is during the period of observation

  51

  Sampling is done using a purposive sampling technique for mendapatakan samples that match the criteria. The following table of sampling: NO KRITERIA JUMLAH

  : The coefficient of each variable APT : Tax-deferred assets AKRUAL : The total accrual of the company e : Error term

  : Constanta β

  : A dummy variable earnings management category. α

  1 −MJ

  LN MJ

  Description:

  1 − MJ = α + β1APT + β2AKRUAL+ e

  LN MJ

  Methods of analysis used in this study is a descriptive statistical tests and hypothesis testing using logistic regression using the assistance software Microsoft Excel and SPSS. Logistic regression models were used to examine the relationship between one variable response and some varianel Predictor, with variable response was in the form of qualitative data the dichotomy that is worth 0 for small firms and loss of value 1 for category small profit firms. Logistic regression model equations used are as follows:

  5. Companies included in the small profit firm ( range 0 – 0,06) and small loss firm (range -0,09 – 0) when distributed based on scaled earning changes.

  4. The annual report contained complete information related to the variables examined.

  3. Publish annual financial reports that have been in the audit by the independent auditors.

  2. The company is not out of the Indonesia stock exchange during the period of observation.

IV. RESULT AND DISCUSSION

A. Populations and Samples

1 Property companies, real estate and construction of buildings registered in BEI during the period 2009 – 2013.

  4 Companies that haven't registered in BEI years 2009-2013.

  9

  5 The annual report contained information related not complete research

  8 variable (not a tax-deferred assets found in the annual report)

  6 Companies that are not included in the category of small losses and small

  19 firm profit firm

  7 The number of companies that are being sampled for the study

  15

  8 The amount of research data

  41 B. Logistic Regression

1. Overall Model Fit Test

  Iteration History Block 0 table

  a,b,c Iteration History

  Coefficients

• 2 Log Iteration likelihood Constant Step 0

  1 51,232 0,732 2 51,221 0,767 3 51,221 0,767

  Iteration History Block 1 table

  a,b,c,d Iteration History

  Coefficients

• 2 Log Iteration likelihood Constant APT AKRUAL Step 1

  1 41,801 -6,585 0,371 2,262 2 41,176 -8,324 0,469 2,887 3 41,167 -8,561 0,482 2,979 4 41,167 -8,565 0,482 2,980 5 41,167 -8,565 0,482 2,980

  Test results overall model fit there is value-2Log Likelihood of early 51.232 2Log Likelihood and end of 41.801. This indicates the onset of impairment-2Log Likelihood beginning with-2Log Likelihood end, meaning that models are hypothesised to fit with the data..

  2. The Feasibility Of A Regression Model Test

Hosmer and Lemeshow Test table

Step Chi-square df Sig.

  1 9,155 8 0,329 The results of statistical tests Hosmer and Lemeshow Good of Fit Test, be aware that the value of Hosmer and Lemeshow Good of Fit Test of significant value of 9.155 0.329. Where is 0, 329 more larger than 0.05 so that it can be inferred that the model fit and can be accepted. This means the regression model is worthy of further analysis was used to

  3. Nagelkerke R Square Test Summary model table

• 2 Log Cox & Snell R Nagelkerke R Step likelihood Square Square

  a

  1 41,167 0,217 0,305 The value of Cox & Snell R Square of 0.217 Nagelkerke R Square value of 0.305.

  This means that the variability of the independent variable can be explained by the variability of independent of 30.5% and 69.5% is affected by other variables not examined.

  4. Parameter estimation and Interpretation

  Variables in the Equation table B S.E. Wald Df Sig. Exp(B)

  a

  Step 1 APT 0,482 0,191 6,397 1 0,011 1,620 AKRUAL 2,980 2,311 1,663 1 0,197 19,695 Constant -8,565 3,927 4,757 1 0,029 0,000

  EM LN = −8,565 + 0,482APT + 2,980AKRUAL

  1 − EM

  5. Hypothesis Testing The First Hypothesis Test Results

  The first hypothesis States that the assets tax-deferred interest positive effect on earnings management . The test results showed the retrieved variable of assets tax-deferred of 0.482 is greater than 0, and the value of 0.011 significance less than 0.05. Then there is a significant positive influence on the variable tax-deferred assets on earnings management by companies listed at the IDX, thereby, H0 is rejected and the Ha are received.

  This research supports research results Rogram & Elsa Chusniah (2011) who found that the assets tax-deferred significant positive effect on earnings management. This research in contrast to research Suranggane (2007) and Erista (2013) are finding evidence that the assets tax-deferred does not have an effect on earnings management

  The difference between the more income tax are calculated based on the financial report commercial with income taxes are calculated based on the financial report of fiscal tax-deferred assets of any such cause. So the greater the value of the assets tax-deferred interest, the higher they do companies profit management.

  The Second Hypothesis Test Results

  The second hypothesis States that a positive effect towards accrual earnings management The test results indicate the value of the variable coefficient obtained the accrual of 2.980 is greater than 0, and the value of 0.197 significance greater than 0.05. Then there is a positive influence but not significant variables accrual earnings management against companies registered in BEI, thereby, H0 is accepted and rejected Ha.

  This study contradicts with the research results Rogram & Elsa Chusniah (2011), Suranggane (2007) and Erista (2013) which found that the accrual effect positive and significantly to the profit on the company's management.

V. CONCLUSIONS

  The first hypothesis States the assets tax-deferred interest a positive effect against management profit on company property, real estate and construction of buildings that are listed on the Indonesia stock exchange. The second hypothesis is that States do not affect the accrual of positive earnings in the company's management against a property, real estate and construction of buildings that are listed on the Indonesia stock exchange

  

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