Hubungan antara Kualitas Audit dengan Penentuan Discretionary Accruals pada Perusahaan yang Terdaftar di Bursa Efek Jakarta Tahun 2000-2003

Abstract

Accruals let managers communicate their private and inside information and thereby improve the ability of earnings to reflect the underlying economic value. However, managers could engage in aggressive reporting of accruals that can seriously undermine the informativeness of reported earnings. Since outsiders can not directly observe earnings, high-accrual firms face greater agency costs relative to low-accrual firms. Auditing plays an important role in mitigating these agency costs by constraining the opportunity of management of accruals. This study examines whether there is a linkage between audit quality and pricing of discretionary accruals. The findings indicate that the association between stock returns and discretionary accruals is not greater for firms audited by Big 5 auditors than for firms audited by non-Big 5 auditors. Further, discretionary accruals of clients of Big 5 auditors do not have greater association with future profitability than discretionary accruals of clients non-Big 5 auditors. Keywords: Earning Managements, Discretionary Accruals, Nondiscretionary Accruals, Big 5, non-Big 5, Net income and Operating Cash flows