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Contoh Aplikasi Software EndNotes Researches on value relevance of accounting information in Indonesia an d other developing countries generally suggested that accounting numbers are relevant to measure firm value (1, one author of journal). However, value relevance of accounting information in Asian countries are also found to fluctuate over time as a result of financial crisis, negative earnings, accounting scandals and violation of regulations in the capital market. These events have negatively affected value relevance of accounting information.
Researches on value relevance of accounting information have continued to develop following such changes (2, three authors of journal) investigate the value relevance of book value and earnings between two different financial reporting regimes i. e. during MASB and FRS period in Malaysia. The result of the study suggests that book values are value relevant under both regimes but earnings are value relevant only during the MASB time period. That means that the change in financial reporting regime also affects significantly the value relevance of book value and but not earnings.
Another study which investigates the value relevance between aggregated and disaggregated book value and earnings among Malaysian high-tech firms is performed by (3, three authors = 2). The result of the study shows that the explanatory power of both book value and earnings are fluctuating, book value is in a decreasing trend, while earnings show an increasing trend. In addition, the result also suggests that disaggregated book value and earnings could explain the variation in market value better than aggregated book value and earnings.

The relationship between earnings management and value relevance of accounting information can also be explained through earnings quality. (4, two authors of book) argue that earnings management is associated to earnings quality. (5, single author of journal) also states that highly managed earnings have low quality. It means that earnings management actions will reduce earnings quality i. e. reliability of earnings. The relevance of accounting information in valuation of a firm can be affected by market’s insight of the reliability of the information (6, four authors of book series).
This means earnings management actions negatively affect value relevance of earnings. Most of the studies on the relationship between earnings management and value relevance of accounting information are conducted in the West or developed countries. These studies attempted to examine earnings management using discretionary accruals (7, three authors of journal; 8, two author of journals; 9, single author of journal). Governance system plays an important role in the financial reporting process.
As suggested by prior researches, rules and regulations formulated to protect investors are key institutional factors affecting the corporate policy choices (10, three authors of conference proceding; 11, two authors of journal). The researchers find that the protection level performed by institutions are associated with the usefulness of accrual-based accounting information. The level of protection imposed by the capital market supervisory agency plays a role in reducing the level of manipulation that can be conducted by managers and controlling shareholders through accruals transactions. Several international studies provide evidence on the association between earnings quality and the degree of protection to investors from the expropriation by controlling shareholders and managers. These studies assert that the characteristics of earnings are affected by the degree of investors’ protection (12, same aurhor with no 11 and 2). As an emerging capital market, many of the listed companies in Indonesia have evolved from the traditional family owned enterprises with highly concentrated ownership structure (13, single author of thesis).
In the context where firms have a controlling block of shares held by the major shareholders, the key agency problem is between the controlling (majority) and minority shareholders. The condition gives great opportunities for managers to engage in real earnings management especially in Indonesia. Under the condition of a highly concentrated ownership structure, it is argued that the controlling shareholders effectively possess greater control rights than the control rights provided through their voting shares as they are also involved in the management decisions (13, three authors of electronic article).
Concentrated share ownership thus creates opportunities for controlling shareholders to expropriate the resources of an entity. Expropriation is a process of using one’s control rights to maximize their welfare through the distribution of wealth from others to him (14, four authors of book series). Expropriation is one of the earnings management tactics conducted by management for the benefit of the controlling shareholders. Furthermore, (15, same authors with no 14) state that the monitoring function will be hard if managers are part of the majority shareholders when their ownership increases to a certain level.
If one’s voting shares have reached a certain threshold, then he/she can have a full control and tend to steer the company to accomplish his/her personal objectives (16, two authors of journal). In addition, it is also argued that to engage in expropriation in countries that adheres to the civil law is easier as compared to countries which practise common law legal system (17, three authors of journal; 18, two authors of journal).
Under the Common Law system, accounting standards and policies are more stringent and protection of the rights of shareholders and creditors is greater with the implementation of various contract system (19, three authors of book series). It is perceived that a country like Indonesia which has its legal tradition originated from the civil law has relatively weaker development in its capital market and various financial institutions as compared to those countries which have legal environment rooted from the Common Law system.
The evidence is consistent with study conducted by (20, same authors with no 19). On the contrary, The German’s companies with principle-based accounting standards would prefer to perform accrual earnings management because lenient standards still allow the conduct of accrual earnings management whichis less costly. The findings are in line with (21, same authors with no 17) which found that accounting standards which are more stringent (tighter) is able to reduce the practice of accrual earnings management, but triger real earnings management.

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