HUBUNGAN PERBEDAAN LABA AKUNTANSI & LABA PAJAK DENGAN PERILAKU MANAJEMEN LABA DAN PERSISTENSI LABA

HUBUNGAN PERBEDAAN LABA AKUNTANSI & LABA PAJAK DENGAN PERILAKU MANAJEMEN LABA DAN PERSISTENSI LABA

SANTI ARYN WIRYANDARI

YULIANTI

UNIVERSITAS INDONESIA

ABSTRACT

The focus of this study is to see the relationship between book-tax income differences and the quality of earnings. Using Earnings Distribution model (Burghstahler & Dichev, 1997), we find that companies in Indonesia are practicing earnings management to avoid reporting losses. This earnings management activity further tested using the Deferred Tax Expense as a mean of prediction. We find that Deferred Tax Expense has no significant relationship with the earnings management activity, therefore can’t be used to predict earnings management activity. We also examine the other earnings quality measurement, namely earnings persistence. Using book-tax income, we tested whether positive book-tax differences can be used to measure earnings persistence. We find that companies with large positive book-tax differences have significantly less persistent earnings, accruals and cash flows. Therefore this research finds that book-tax income difference has the ability to detect earnings quality, which is the persistence of future earnings

Key words: Book-tax difference, deferred tax expense, earnings management, earningspersistance

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