Information Asymmetry in Earnings Management Practices in Banking on the Indonesia Stock Exchange

Abstract

The objective of this research is to investigate that there is any significant effect of information asymmetry due to earning management practical of go public banking company which is listed at BEI. This research used 16 banks as sampling which are listed at BEI from 2005 until 2007. Information Asymmetry was measured by bid-ask spread as a variable of independent and earnings management was measured by discretionary accruals as a variable of a dependent. The data collecting was analyzed by simple linear regression and counted by using SPSS 12.0 for windows and Eviews 4.0, and after done Assumption classic tests, there is normality test with Statistic Kolmogorov Smirnov test, heteroskedasticity test with Golfeld & Quandt test, and Autocorrelation test with Durbin-Watson test, meanwhile, the hypothesis is tested by t-test. The result of this research is: Information Asymmetry has a positive significant effect on earnings management (as long as the research). This was shown by ADJSPREAD value is 2.329 with sig 0.024, so information asymmetry will influence managers to do earnings management.