The value relevance of accounting information moderated by earnings management: Evidence from listed companies in the developing market
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Rida Prihatni 
, Indra Pahala , Ati Sumiati , Ayatulloh Michael Musyaffi
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This research aims to investigate the value relevance of accounting information (VRAI) and the effect that earnings management (EM) has on the VRAI. Research on the VRAI is generally carried out using the model introduced by Ohlson (1995). Problems will occur when the VRAI as a company performance measurement tool is faced with the practice of manipulation by managers. This study’s population is all manufacturing companies listed on the LQ45 Index. Sampling-based on purposive sampling; the research sample obtained as many as 16 samples over three years, so the number of observations is 48 companies per year. The data analysis technique used multiple linear regressions with moderating variables or moderated regression analysis (MRA). The results show that earnings per share (EPS) have value relevance (VR), and book value (BV) has VR. Operating cash flow (OCF) has no VR. Management weakens the VR of earnings, EM is not moderating BV relevance, and EM strengthens the VR of OCF.
Keywords: Book Value Per Share, Cash Flow Per Share, Earnings Per Share, Earnings Management, Stock Price
Authors’ individual contribution: Conceptualization — R.P.; Methodology — R.P.; Formal Analysis — R.P.; Investigation — A.S.; Resources — A.M.M.; Writing — R.P.; Supervision — I.P.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: G32, M41, M48
Received: 26.11.2022
Accepted: 11.08.2023
Published online: 15.08.2023
How to cite this paper: Prihatni, R., Pahala, I., Sumiati, A., & Musyaffi, A. M. (2023). The value relevance of accounting information moderated by earnings management: Evidence from listed companies in the developing market. Corporate & Business Strategy Review, 4(3), 118–126. https://doi.org/10.22495/cbsrv4i3art12
