| dc.description.abstract | Bondan Satrio Pribadi (2006). The Effect of Audit Quality on Earning Management in Companies Listed in Jakarta Stock Exchange For The Years 1997-2001. Yogyakarta. International Program, Department of Accounting. Universitas Islam Indonesia.
This research searches for the relation between audit quality and earnings management in Indonesian firms. This research takes the Big Five auditor as the high quality auditor and Non-Big Five as the low Quality auditor. Earning management is captured by discretionary accruals that are estimated using a cross sectional version of Jones 1991 model. Based on the previous study done by Becker, Defond, Jiambalvo, and Subramanyam in Contemporary Accounting Research (spring 1998) reveals that the Clients of Non Big Six auditors report that the income of discretionary accruals is relatively increasing and higher than the discretionary accruals reported by clients of Big Six auditor. This result is based on assillnption that quality of the Big Six is higher than the Non-Big Six auditor.
This study takes the data from the companies' financial statement listed in the Indonesian Capital Market Directory (ICMD) for the years 1997-2001. However the financial statement of 1996 is used because it is needed in processing the data. In addition, the data also takes from Capital Market Database of Jakarta Stock Exchange (JSX) comer at Faculty of Economics Islamic university of Indonesia and other relevant sources with data criterion.
As the main result, the relation between dependent variable (discretionary accruals) and independent variable (NB5) has positive significant relation, thus this result is appropriate with the prediction. The result shows that audit quality has huge effect to detect the earnings management on the company. Compared to clients with Big-Five auditors, clients with Non-Big Five have higher discretionary accruals. and the entire control variable has correlation with discretionary accruals. | en_US |
