Hubungan Manajemen Laba Sebelum IPO dan Return Saham dengan

Kecerdasan Investorsebagai Variabel Pemoderasi

Association of Earnings Management before IPO and Stocks Returns
with InvestorsSophistication as Moderating Variable

Joni dan Jogiyanto H. M.


Abstract
The major purpose of this study is to investigate association between earnings
management before Initial Public Offerings (IPO) and stocks returns
with investors sophistication as a moderating variable. Institutional ownership is used to
proxy investors sophistication.
The JSXs IPO companies from 1990 to 2002 were used as samples. The first sample
was 75 companies which institutional ownership ? 40% and the second was
63 companies that institutional ownership ? 60%. Instrumental Variable Approach (Kang
and Sivaramakrishnan, 1995) was used to detect earnings management.
This study provides an evidence that issuers report unusually high earnings
management around IPO (two years before and five years after IPO). Issuers used
mean reversing strategy in two years before IPO period (income decreasing) for
preparing earnings management in the next period (income increasing). Furthermore,
this study documented a negative association between earnings management and
stocks returns withinvestors sophistication as moderating variable. One interpretation of
this finding is that high earnings management has substantial stocks returns
consequences when investors sophistication factor was taken into account. This finding
is consistent with the prior research developed by Balsam et al., 2002.
Key words: IPO, Earnings Management, Instrumental Variable Approach,
Stocks Returns, Investors Sophistication.
LATAR BELAKANG
Some studies find that firms manage earnings prior to the IPO. Friedlan (1994) found
evidence that firms in the United States to increase accounting earnings period of one
year before the IPO. Jain and Now (1994) states that there is reduction in the
operational performance of the company after the IPO. The decline is showing
indications of earnings management has occurred before the IPO. Teoh et al. (1998a)
found that there are companies that behave aggressively (increase profits) and there
are behaving conservatively when preparing financial statements of one period before
the IPO.
Imam Sutanto (2000), Gumanti (2001), Syaiful (2002), and Raharjono (2005) finds that
earnings management occurs ahead of an IPO on the Jakarta Stock Exchange (JSE).
Gumanti (2001) and Syaiful (2002) concluded that management conduct of
management earnings period of two years before the IPO and there was no indication
of earnings management period of one year before the IPO. While Raharjono (2005)
find that earnings management occurs in period one year before the IPO.
(Simposium Nasional Akuntansi 11)
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