NEGATIVE PUBLIC TRUST ON POLITICAL CONNECTION: TESTING ON THE EFFECT OF ACCOUNTING CONSERVATISM ON EARNINGS QUALITY
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Abstract
Koneksi politik dipandang sebagai jalan pintas untuk mendapatkan legitimasi. Hal itu, dengan demikian, menurunkan kepercayaan publik terhadap koneksi politik. Sebagai pengaruh konservatisme akuntansi terhadap kualitas laba didasarkan pada kepercayaan publik. Makalah ini berpendapat bahwa kepercayaan publik dalam koneksi politik dapat menurunkan pengaruh konservatisme akuntansi terhadap kualitas laba. Dengan menggunakan data panel dari 88 perusahaan manufaktur yang terdaftar secara konsisten di Bursa Efek Indonesia dari tahun 2016 hingga 2018, makalah ini menemukan bahwa konservatisme akuntansi berpengaruh positif terhadap kualitas laba dan koneksi politik menurunkan pengaruh positif konservatisme akuntansi terhadap kualitas laba. Hasilnya menegaskan bahwa publik memiliki persepsi negatif terhadap perusahaan yang terhubung secara politik. Persepsi negatif ini mengaburkan sinyal positif dari praktik konservatisme akuntansi.
Political connection is seen as a shortcut to get legitimacy. It, thus, decreases public trust on political connection. As the effect of accounting conservatism on earnings quality is based on public trust. This paper argued that public trust in political connection could decrease the effect of accounting conservatism on earnings quality. Using panel data of 88 manufacturing companies that are listed consistently on Indonesia Stock Exchange from 2016 to 2018, this paper found that accounting conservatism had positive effect on earnings quality and political connection decreased the positive effect of accounting conservatism on earnings quality. The result confirmed that public had negative perception over politically connected firms. This negative perception obscured the positive signal from accounting conservatism practice.
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