The effect of accounting conservatism, company size, and profitability on earnings quality in consumer goods companies listed on Indonesia Stock Exchange

Angeline, Angeline (2021) The effect of accounting conservatism, company size, and profitability on earnings quality in consumer goods companies listed on Indonesia Stock Exchange. Bachelor thesis, Universitas Pelita Harapan.

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Abstract

Nowadays, a large number of individuals have realized the value of investing. Before making an investment decision, investors certainly will preliminary conduct analysis, which is inseparable from financial statements. Through financial statements, investors can obtain earnings information which can be used as a basis for investment decisions on whether to purchase, hold, or sell a company’s shares. However, not all earnings information is qualified enough for investment decision-making. This condition highlights the essence of earnings quality to be examined since the appealing earnings do not guarantee the quality of the earnings. This research aims to examine the effect of accounting conservatism, company size, and profitability on earnings quality. The data used in this research are secondary data taken from annual financial reports obtained from Indonesia Stock Exchange. The population of this research is consumer goods companies listed at the Indonesia Stock Exchange during the period of 2017-2019. By using the purposive sampling method in determining the research sample, only 31 consumer goods companies fulfill the research criteria. Hence, the total financial statements selected as samples during the observation years are 93 samples. The results of this research display that accounting conservatism has a significant positive effect on earnings quality, and profitability has a significant negative effect on earnings quality. Meanwhile, company size has an insignificant negative effect on earnings quality. Simultaneously, accounting conservatism, company size, and profitability have a significant effect on earnings quality./ Dewasa ini, sejumlah besar individu telah menyadari pentingnya berinvestasi. Sebelum mengambil keputusan investasi, para investor tentunya akan terlebih dahulu melakukan analisis yang tidak terlepas dari laporan keuangan. Melalui laporan keuangan, investor dapat memperoleh informasi laba yang dapat digunakan sebagai dasar pengambilan keputusan investasi apakah akan membeli, menahan, atau menjual saham suatu perusahaan. Namun, tidak semua informasi laba cukup memenuhi syarat untuk pengambilan keputusan investasi. Kondisi ini menyoroti esensi kualitas laba yang harus diperiksa karena laba yang menarik tidak menjamin kualitas laba. Penelitian ini bertujuan untuk menguji pengaruh konservatisme akuntansi, ukuran perusahaan, dan profitabilitas terhadap kualitas laba. Data yang digunakan dalam penelitian ini adalah data sekunder yang diambil dari laporan keuangan tahunan yang diperoleh dari Bursa Efek Indonesia. Populasi dalam penelitian ini adalah perusahaan barang konsumsi yang terdaftar di Bursa Efek Indonesia selama periode 2017-2019. Dengan menggunakan metode purposive sampling dalam menentukan sampel penelitian, hanya 31 perusahaan barang konsumsi yang memenuhi kriteria penelitian. Sehingga total laporan keuangan yang dipilih sebagai sampel selama tahun pengamatan adalah 93 sampel. Hasil penelitian ini menunjukkan bahwa konservatisme akuntansi berpengaruh positif signifikan terhadap kualitas laba, dan profitabilitas berpengaruh negatif signifikan terhadap kualitas laba. Sedangkan ukuran perusahaan berpengaruh negatif tidak signifikan terhadap kualitas laba. Secara simultan konservatisme akuntansi, ukuran perusahaan, dan profitabilitas berpengaruh signifikan terhadap kualitas laba.

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