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Objective -The purpose of this research is to examine the impact of the International Financial Reporting Standard (IFRS) convergence in Indonesia on earnings quality. Methodology/Technique - Earnings quality is measured on both accrual earnings management and real earnings management. Indonesia began convergence IFRS in 2012. IFRS is considered capable of improving comparability, transparency, and earnings information, which is expected to ultimately improve earnings quality. The sample in this research uses manufacturing firms listed on the Indonesian Stock Exchange that were suspected to avoid loss during the observation period. The data consist of 45 companies examined between 2008 and 2015. Results -This study uses statistical methods and multiple regression linear to analyse the data. The research results show that IFRS convergence in Indonesia has had a negative impact on accrual earnings management and no impact on real earnings management. Novelty -The evidence shows that IFRS convergence in Indonesia has the ability to improve earnings quality related to a decrease in accrual earnings management but not real earnings management. [ABSTRACT FROM AUTHOR]

Objective -The emergence of the ASEAN Single Window has triggered the need for higher audit quality in ASEAN countries, including Indonesia. A recent study conducted in Indonesia reveals that the reputation of auditing firms, as rated by clients and users, and auditor's competence, as rated by the auditor, are the primary determinants of audit quality. The purpose of this study is to analyze whether the reputation or competence of an auditor affects audit quality, within manufacturing companies in Indonesia. Methodology/Technique -This paper contributes to the creation of new measurements for auditor capability, by highlighting empirical evidence concerning the determinants of audit quality in Indonesia. Findings - By using discretionary accrual as the inverse determinant of audit quality, the result show that financial statements audited by reputable auditing firms contain the same discretionary accruals as those audited by other firms. The results further demonstrate that auditor capability does not affect audit quality. Audit quality in Indonesia is therefore not determined by firm reputation or auditor capability. Hence, it is important to search for new determinants of audit quality. Research Limitations/Implications - The limitation of this research is the low number of reputable audit firms and specialized auditors used by the sample firms, which lead to the exclusion of numerous controlled variables that may be integral when explaining audit quality. Future studies may use other sample firms and use additional controlled variables, to further explain audit quality. [ABSTRACT FROM AUTHOR]

Objective - The purpose of this research is to examine the consequences of accrual based earnings management and real earnings management on future operating performance. The firms studied engage in accrual-based earnings management with discretionary accrual measures using the modified Jones model and some of the following real earnings management activities: (1) Sales manipulation that accelerates the timing of sales through increased price discounts or cutting prices to boost sales in the current period; and/or (2) cutting of discretionary expenditures to increase income in the current period. Furthermore, the study examines the extent to which discretionary accrual and real earnings management affects subsequent operating performance (as measured by both return on assets and operating cash flows). Methodology/Technique - The sample manufacturing firms that engage in financial statement were listed on the Indonesian Stock Exchange between 2012 and 2014. The hypothesis testing method used in this research is multiple regression linear. Findings - The results suggest that accrual-based earnings management, with discretionary accrual measures, and real earnings management through sales manipulation and discretionary expenditures are positively associated with return on assets after one and two years. Meanwhile, accrual-based earnings management and real earnings management through sales manipulation enhances subsequent operating cash flows. However, real earnings management through discretionary expenditures does not influence operating cash flows. Novelty - This research contributes to the existing literature on the subsequent impact of accrual-based earnings management and real earnings management [ABSTRACT FROM AUTHOR]