Bomb attacks and earnings management: Evidence from indonesia

Jauza Azaria Rachmawati, Desi Adhariani

Research output: Contribution to journalArticlepeer-review

Abstract

This study examines how companies manage their earnings under the pressure of bomb attacks, especially focusing on three major bomb attacks in Indonesia: the Bali Bombing I, Bali Bombing II, and Mega Kuningan Bombing. The research was conducted by examining accrual-based earnings management before and after the attacks. The findings show that bombings encourage managers to manage earnings (measured by the absolute value of discretionary accruals). However, a separate study of Mega Kuningan Bombing shows that this effect was not significant. Although the attacks occurred several years ago, the lessons learned still show an impact on the accounting aspect. This study contributes to the literature on earnings management as a consequence of terrorism.

Original languageEnglish
Pages (from-to)1-18
Number of pages18
JournalInternational Journal of Business and Society
Volume20
Issue numberS1
Publication statusPublished - 1 Jan 2019

Keywords

  • Bali bombing I
  • Bali bombing II
  • Earnings management
  • Indonesia
  • Mega Kuningan bombing

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