Does IFRS Convergence Decrease Earning Manipulation? An Empirical Study of Indonesia

Abstract

This study aims at investigating the effect of IFRS convergence on earning manipulation of companies listed on the Indonesia Stock Exchanges (IDX). Data were gathered from the annual reports of the companies. Samples are determined using purposive sampling and resulted in 51companies. Earning manipulation is measured by Beneish M-Score and then is analysed using Wilcoxon Sign Rank test. Research findings showed there was no significant difference in earning manipulation before and after IFRS convergence. In other words, the IFRS convergence did not decrease earning manipulation practices among companies used as sample in this study