Accrual Anomaly in Indonesia (Empirical Study of Companies Registered In Indonesia's Stock Exchange)

ELBERT LUDICA TOHA, Siti Nurwahyuningsih Harahap

Research output: Contribution to journalArticlepeer-review

Abstract

Many studies have found a reverse correlation between the levels of accruals and subsequent abnormal stock return on the US market, which is caused by investor's failure in predicting the future earnings using the cash and the accrual components. Investors overweight the accrual component. This relationship is considered as an anomaly since it is not a corresponding with the efficient market hypothesis, in which the investors should not overweight accrual component. This research aims to detect accrual anomalies to the companies registered in the Indonesia stock exchange. The sample used in this study is a list of companies on the Indonesia Stock Exchange with a total of companies are 121 companies. The result shows that there is accrual anomaly in Indonesia although it is slightly different from the US market.
Original languageEnglish
Pages (from-to)99-142
JournalThe Indonesian Journal of Accounting Research (IJAR)
Volume17
Issue number1
Publication statusPublished - 1 Jan 2017

Keywords

  • Accrual, Accrual Anomaly, Abnormal Return

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