Does corporate social responsibility affect earnings management? Evidence from the Indonesian banking industry

Artikel

This paper aims at examining the effect of corporate social responsibility on earnings management in the Indonesian banking industry. Using Indonesian publicly listed banking firms in the years of 2013-2015 as the sample, we generate 94 firmyear observations as the final sample. The results show that corporate social responsibility positively affects earnings management, suggesting that the higher the corporate social responsibility score, the greater earnings management. Further, the study investigates the effects of corporate social responsibility on absolute earnings management, positive earnings management, and negative earnings management. The results robustly demonstrate the positive effects of corporate social responsibility on earnings management. Thus, this study implies that investors need to be cautious of banks that engage in higher corporate social responsibility because they are more likely to exhibit greater earnings management. While most of the previous studies in this issue focus on developed countries as their research settings, this study provides empirical evidence on the relationship between corporate social responsibility in Indonesia as an emerging market.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Verslas: Teorija ir praktika / Business: Theory and Practice ; ISSN: 1822-4202 ; Volume: 20 ; Year: 2019 ; Pages: 372-378 ; Vilnius: Vilnius Gediminas Technical University

Classification and Topics

• Classification: Management ; Accounting ; Banks; Depository Institutions; Micro Finance Institutions; Mortgages
• Subject: corporate social responsibility ; earnings management ; discretionary accrual ; banking ; disclosure ; Indonesia

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Doddy Setiawan ; Prabowo, Ronny ; Arnita, Vina ; Wibawa, Anas
• Event: Veröffentlichung
• (who): Vilnius Gediminas Technical University
• (where): Vilnius
• (when): 2019

Further information

• DOI: doi:10.3846/btp.2019.35
• Handle: http://hdl.handle.net/10419/247987