Research Article
The Effect of Managerial Ability on Financial Reporting Quality: An Empirical Analysis of the Banking Industry
@INPROCEEDINGS{10.4108/eai.6-12-2018.2286275, author={Sinta Juliani and Sylvia Veronica Siregar}, title={The Effect of Managerial Ability on Financial Reporting Quality: An Empirical Analysis of the Banking Industry}, proceedings={Proceedings of the 1st Sampoerna University-AFBE International Conference, SU-AFBE 2018, 6-7 December 2018, Jakarta Indonesia}, publisher={EAI}, proceedings_a={SU-AFBE}, year={2019}, month={8}, keywords={banking financial reporting quality managerial ability}, doi={10.4108/eai.6-12-2018.2286275} }- Sinta Juliani
Sylvia Veronica Siregar
Year: 2019
The Effect of Managerial Ability on Financial Reporting Quality: An Empirical Analysis of the Banking Industry
SU-AFBE
EAI
DOI: 10.4108/eai.6-12-2018.2286275
Abstract
This study aims to examine the effect of managerial ability on financial reporting quality. The samples of this study are listed banks in the Indonesia Stock Exchange during the period of 2010 to 2016. with total observations are 210 firm-years. Managerial ability is measured using Data Envelopment Analysis (DEA). Earnings persistence and earnings predictability are used to measure financial reporting quality. By using panel data regression, the results show that managerial ability has a negative effect on financial reporting quality, for both measures. This may be due to when the manager has higher ability, he/she tends to be opportunistic and take actions (such as opportunistic earnings management) and thus earnings become less persistent as well as less predictable (low financial reporting quality).