The Effect of Tax Avoidance, Real and Accrual Earnings Management on Cost of Equity

Silvia Dewiyanti, Andi Ulil Amri Burhan

2018

Abstract

This research aims to examine the effect of tax avoidance, accrual earnings management, and real earnings management on the cost of equity. The independent variables used in this study are tax avoidance measured by abnormal book-tax differences (ABTD), earnings accrual management as measured by performance-adjusted current discretionary accruals (PACDA), and real earnings management measured by abnormal discretionary expense and abnormal production cost. Meanwhile, the dependent variable used is the cost of equity as measured by the equity cost formula. The equity cost formula is obtained by summing the book value per share in period t plus the earnings per share in the period t+1 then subtracted from the stock price in period t which is divided by the share price in period t. The population in this study were manufacturing companies listed on the Indonesia Stock Exchange from 2012 to 2016. Samples were taken using the purposive sampling method. This study uses panel data regression analysis techniques. The results showed that tax avoidance had a significantly positive effect on the cost of equity while accrual earnings management and real earnings management had no effect on the cost of equity.

Paper Citation

in Harvard Style

Dewiyanti S. and Burhan A. (2018). The Effect of Tax Avoidance, Real and Accrual Earnings Management on Cost of Equity.In Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES, ISBN 978-989-758-432-9, pages 1134-1140. DOI: 10.5220/0009506111341140

in Bibtex Style

@conference{unicees18,
author={Silvia Dewiyanti and Andi Ulil Amri Burhan},
title={The Effect of Tax Avoidance, Real and Accrual Earnings Management on Cost of Equity},
booktitle={Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES,},
year={2018},
pages={1134-1140},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0009506111341140},
isbn={978-989-758-432-9},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 1st Unimed International Conference on Economics Education and Social Science - Volume 1: UNICEES,
TI - The Effect of Tax Avoidance, Real and Accrual Earnings Management on Cost of Equity
SN - 978-989-758-432-9
AU - Dewiyanti S.
AU - Burhan A.
PY - 2018
SP - 1134
EP - 1140
DO - 10.5220/0009506111341140