Can Income and Equity Attribution Minimize Agency Costs? (Effect of Attribution Policy on Earnings Management and Firm Value)

Marhaendra Kusuma, Agus Athori

Abstract


This study aims to measure the effectiveness of the policy of presenting profit and equity information attributable to owners of the parent entity and owners with non-controlling interests in the consolidated financial statements in an effort to minimize agency costs. Research on 546 companies listed on the IDX for the period 2017 2021, yielded evidence that the policy of presenting attributions of net income and equity to owners of parent entities and owners with non-controlling interests in consolidated financial statements can minimize agency costs, which is indicated by a negative effect on management earnings and positive influence on firm value. The novelty of this research is to examine the effect of attributions of net income and equity to majority and minority shareholders on earnings management and firm value to measure the effectiveness of earnings and equity attribution policies in minimizing agency costs in Indonesia.


Keywords


attribution of net income and equity, earnings management, firm value, agency costs.

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References


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DOI: https://doi.org/10.30596/miceb.v1i0.308

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