The Influence of Green Management, Stock Market Segmentation, Operating Cash Flow and Company Characteristics on Profit Management

Authors

  • Nico Valentino Universitas Internasional Batam

Keywords:

Firm Characteristic, Operating Cash Flows, Stock Market Segmentation, Green Management, Earnings Management

Abstract

The study examines the impact of green management, stock market segmentation, operating cash flows, and firm characteristics on earnings management. Earnings management is measured using the modified Jones Model. The study employs purposive sampling and includes 86 companies listed on the Indonesian Stock Exchange between 2018 and 2022. There are 285 observations used to test the hypothesis using the panel regression method.

The research findings indicate that green management has a positive effect on profit management, whereas corporate size has an adverse effect. However, factors such as stock market segmentation, operating cash flows, return on assets, and dividend yield do not have a significant impact on profit management. These findings indicate that companies implementing green management systems are more likely to uphold their reputation by generating higher income.

Downloads

Download data is not yet available.

References

Abey Francis. (2023). What is Green Management? MBA Knowledge Base. https://www.mbaknol.com/category/modern-management-concepts/

Anita, A., & Amalia, D.P. (2021). The influence of social responsibility on financial performance: Ownership structure as a moderating variable. Journal of Modernization Economics, 17(1), 54–68; https://doi.org/10.21067/jem.v17i1.5283

Astami, EW, Rusmin, R., Hartadi, B., & Evans, J. (2017). The role of audit quality and culture influence on earnings management in companies with excessive free cash flow: Evidence from the Asia-Pacific region. International Journal of Accounting and Information Management, 25(1), 21–42. https://doi.org/10.1108/IJAIM-05-2016-0059

Bader, A., Alnawaiseh, M., Abdel Latif Ibrahim Alnawaiseh, M., Mohammad Alomari, R., Al-Rawashdeh, F., & barakat alnawaiseh, M. (2017). The quality of financial reports in the risks of electronic accounting information systems in the Jordanian commercial banks LEADERSHIP ROLE IN TOURISM COMPANIES View project The effect of Free Cash Flow on the Companies' Financial Polices: Evidence from Jordan. International Journal of Economic Research, 14(9). http:www.serialsjournal.com

Bajra, U., & Cadez, S. (2018). The Impact of Corporate Governance Quality on Earnings Management: Evidence from European Companies Cross-listed in the US. Australian Accounting Review, 28(2), 152–166. https://doi.org/10.1111/auar.12176

Grimaldi, F., Caragnano, A., Zito, M., & Mariani, M. (2020). Sustainability engagement and earnings management: The Italian context. Sustainability (Switzerland), 12(12). https://doi.org/10.3390/SU12124881

Haykal, M. (2018). The discretionary accruals in the financial statement of a public company in Indonesia: A literature review. In Emerald Reach Proceedings Series (Vol. 1, pp. 595–600). Emerald Group Holdings Ltd.https://doi.org/10.1108/978-1-78756-793-1-00047

Itan, I., Laudeciska, L., Karjantoro, H., & Chen, R. (2023). Corporate Governance and Environmental Disclosure: Assessing the Role of Environmental Performance. Indonesian Accounting and Finance Research, 8(2), 132-144.

Jamadar, Y., Ong, TS, Abdullah, AA, & Kamarudin, F. (2021). Earnings and discretionary accruals. Managerial and Decision Economics, 43(2), 431–439. https://doi.org/10.1002/mde.3391

Kazemian, S., & Sanusi, Z.M. (2015). Earnings Management and Ownership Structure. Procedia Economics and Finance, 31, 618–624. https://doi.org/10.1016/s2212-5671(15)01149-1

Khanifah, K., Isgiyarta, J., Alfiana, F., & Udin, U. (2019). Environmental Performance and Firm Value: Testing the Role of Firm Reputation. International Journal of Financial Research, 11(1), 137. https://doi.org/10.5430/ijfr.v11n1p137

Larson, C.R., Sloan, R., & Zha Giedt, J. (2018). Defining, measuring, and modeling accruals: a guide for researchers. Review of Accounting Studies, 23(3), 827–871. https://doi.org/10.1007/s11142-018-9457-z

Miko, NU, & Kamardin, H. (2015). Impact of Audit Committee and Audit Quality on Preventing Earnings Management in the Pre- and Post- Nigerian Corporate Governance Code 2011. Procedia - Social and Behavioral Sciences, 172, 651–657. https://doi.org/10.1016/j.sbspro.2015.01.415

Molina-Azorín, J.F., Claver-Cortés, E., López-Gamero, M.D., & Tarí, J.J. (2009). Green management and financial performance: A literature review. Management Decision, 47(7), 1080–1100. https://doi.org/10.1108/00251740910978313

Mustapha, MA, Manan, ZA, & Wan Alwi, SR (2017). Sustainable Green Management System (SGMS) – An integrated approach towards organizational sustainability. Journal of Cleaner Production, 146, 158–172. https://doi.org/10.1016/j.jclepro.2016.06.033

Putra, F. (2021). Environmental Performance and Earnings Persistence: Empirical Evidence from Indonesia. Journal of Asian Finance, Economics and Business, 8(3), 1073–1081. https://doi.org/10.13106/jafeb.2021.vol8.no3.1073

Rachmawati, S. (2021). GREEN STRATEGY MODERATE THE EFFECT OF CARBON EMISSION DISCLOSURE AND ENVIRONMENTAL PERFORMANCE ON FIRM VALUE. International Journal of Contemporary Accounting, 3(2), 133–152. https://doi.org/10.25105/ijca.v3i2.12439

Rizkiyana, A., Mulyani, S., & Afifi, Z. (2022). BANKING PROFIT MANAGEMENT IN INDONESIA: THE ROLE OF THE BOARD OF DIRECTORS. IMWI Repository Horizons |, 5(2).

Tang, S., & Fiorentina, F. (2021). The Influence of Company Characteristics, Company Performance, and Management Entrenchment on Profit Management. Journal of Business Economics and Entrepreneurship, 10(2), 121.

Toumeh, AA, Yahya, S., & Amran, A. (2020). Surplus Free Cash Flow, Stock Market Segmentations and Earnings Management: The Moderating Role of Independent Audit Committee. Global Business Review.https://doi.org/10.1177/0972150920934069

Wati, E., & Malik, AQ (2021). Corporate Social Responsibility and Earnings Management: The Moderating Role of Corporate Governance. Journal of Accounting Research, Organization and Economics, 4(3), 298-307.

Yopie S., & Robin. (2023). The Influence of Corporate Governance System and Corporate Social Responsibility on Corporate Profit Management Kompas 100. Migration Letters, 20(7), 1327–1346. https://doi.org/10.59670/ml.v20i7.5153

You, HW, Brahmin, RK, & Tan, MY (2018). Corporate environmental disclosure and earnings management. International Journal of Green Economics, 12(3/4), 308. https://doi.org/10.1504/ijge.2018.10019190

Zgarni, I., Hlioui, K., & Zehri, F. (2016). Effective audit committee, audit quality and earnings management Evidence from Tunisia. Journal of Accounting in Emerging Economies, 6(2), 138–155. https://doi.org/10.1108/JAEE-09-2013-0048

Zurigat, Z., Sartawi, IISM, & Aleassa, H. (2014). Empirical Investigation of Free Cash Flow Hypothesis: Evidence from Jordanian Capital Market. International Business Research, 7(3). https://doi.org/10.5539/ibr.v7n3p137

Downloads

Published

2024-04-04