TY - JOUR
T1 - EARNINGS MANAGEMENT AND PROBABILITY OF DEFAULT ANALYSIS OF NON-FINANCIAL COMPANIES IN INDONESIA DURING THE COVID-19 PANDEMIC
AU - Lubis, Arief Wibisono
PY - 2023/10/31
Y1 - 2023/10/31
N2 - During the COVID-19 pandemic, the Indonesian economy experienced negative growth of 2.19 percent (2020). This condition affects the decline in business in Indonesia, which impacts the increase in bank Non-Performing Loans. Generally, credit assessment by banks is performed based on the information figured in financial statements and therefore the accounting records can affect credit quality. This research aims to study whether earnings management carried out by companies during the COVID-19 pandemic crisis has a significant effect on the probability of default, especially for non-financial sector companies in Indonesia. The data was obtained from the Indonesia Stock Exchange for the period 2019 – 2021. The probability of default was calculated using the KMV-Merton Model and earnings management using the F-score Dechow method. The results showed that there was an increase in the number of companies that had a probability of default during the COVID-19 pandemic, but but the number of companies that indicated earnings management decreased. The result showed that the effect of earnings management on the probability of default is not significant. However, interested parties must be able to identify earnings management as early as possible, which can have an adverse impact on credit quality and anticipate possible defaults in the future.
AB - During the COVID-19 pandemic, the Indonesian economy experienced negative growth of 2.19 percent (2020). This condition affects the decline in business in Indonesia, which impacts the increase in bank Non-Performing Loans. Generally, credit assessment by banks is performed based on the information figured in financial statements and therefore the accounting records can affect credit quality. This research aims to study whether earnings management carried out by companies during the COVID-19 pandemic crisis has a significant effect on the probability of default, especially for non-financial sector companies in Indonesia. The data was obtained from the Indonesia Stock Exchange for the period 2019 – 2021. The probability of default was calculated using the KMV-Merton Model and earnings management using the F-score Dechow method. The results showed that there was an increase in the number of companies that had a probability of default during the COVID-19 pandemic, but but the number of companies that indicated earnings management decreased. The result showed that the effect of earnings management on the probability of default is not significant. However, interested parties must be able to identify earnings management as early as possible, which can have an adverse impact on credit quality and anticipate possible defaults in the future.
UR - https://journal.untar.ac.id/index.php/jmieb/article/view/24131
U2 - 10.24912/jmieb.v7i2.24131
DO - 10.24912/jmieb.v7i2.24131
M3 - Article
SN - 2579-6232
VL - 7
SP - 311
EP - 326
JO - Jurnal Muara : Ilmu Ekonomi dan Bisnis
JF - Jurnal Muara : Ilmu Ekonomi dan Bisnis
IS - 2
ER -