Papers by sherika Anastasi
SCMS Journal of Indian MAnagement, 2022
Analysis of earnings management (EM) strategies in financial distress conditions will be more app... more Analysis of earnings management (EM) strategies in financial distress conditions will be more appropriate by
considering the intensity of the distress because financial distress is a heterogeneous condition according to its
intensity. Therefore, companies will practice EM strategies according to the intensity of financial distress. The study
collects 860 research observations from the companies listed on the IDX (Indonesia) for the period 2008 to 2018.
Multiple regression models are employed to examine the relationship between the intensity of financial distress and
EM strategies, namely Accrual Earnings Management (AEM) and Real Earnings Management (REM). Empirical
evidence shows that companies have not intensified EM practices in the early stages of financial distress. Companies
began to intensively practice EM when financial distress began to cause liquidity problems. However, when the
intensity of distress increases, the opportunity to practice EM is increasingly limited. In this case, companies will
choose an EM strategy that is still possible to practice in accordance with the intensity of financial distress. The results
of this study confirm that the trade-off between pressure and opportunity to practice EM can explain the choice of EM
strategy at any intensity of financial distress. The results of this study are useful for financial statement analysts and
auditors in assessing the quality of the financial statements of companies experiencing financial distress. This study
analyses the effect of financial distress on the choice of EM practice by revealing the ongoing process of financial
distress, thus providing a comprehensive analysis of the choice of EM strategy in financial distress
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Papers by sherika Anastasi
considering the intensity of the distress because financial distress is a heterogeneous condition according to its
intensity. Therefore, companies will practice EM strategies according to the intensity of financial distress. The study
collects 860 research observations from the companies listed on the IDX (Indonesia) for the period 2008 to 2018.
Multiple regression models are employed to examine the relationship between the intensity of financial distress and
EM strategies, namely Accrual Earnings Management (AEM) and Real Earnings Management (REM). Empirical
evidence shows that companies have not intensified EM practices in the early stages of financial distress. Companies
began to intensively practice EM when financial distress began to cause liquidity problems. However, when the
intensity of distress increases, the opportunity to practice EM is increasingly limited. In this case, companies will
choose an EM strategy that is still possible to practice in accordance with the intensity of financial distress. The results
of this study confirm that the trade-off between pressure and opportunity to practice EM can explain the choice of EM
strategy at any intensity of financial distress. The results of this study are useful for financial statement analysts and
auditors in assessing the quality of the financial statements of companies experiencing financial distress. This study
analyses the effect of financial distress on the choice of EM practice by revealing the ongoing process of financial
distress, thus providing a comprehensive analysis of the choice of EM strategy in financial distress
considering the intensity of the distress because financial distress is a heterogeneous condition according to its
intensity. Therefore, companies will practice EM strategies according to the intensity of financial distress. The study
collects 860 research observations from the companies listed on the IDX (Indonesia) for the period 2008 to 2018.
Multiple regression models are employed to examine the relationship between the intensity of financial distress and
EM strategies, namely Accrual Earnings Management (AEM) and Real Earnings Management (REM). Empirical
evidence shows that companies have not intensified EM practices in the early stages of financial distress. Companies
began to intensively practice EM when financial distress began to cause liquidity problems. However, when the
intensity of distress increases, the opportunity to practice EM is increasingly limited. In this case, companies will
choose an EM strategy that is still possible to practice in accordance with the intensity of financial distress. The results
of this study confirm that the trade-off between pressure and opportunity to practice EM can explain the choice of EM
strategy at any intensity of financial distress. The results of this study are useful for financial statement analysts and
auditors in assessing the quality of the financial statements of companies experiencing financial distress. This study
analyses the effect of financial distress on the choice of EM practice by revealing the ongoing process of financial
distress, thus providing a comprehensive analysis of the choice of EM strategy in financial distress