The Role Analysis of Accrual Management on Loss-Loan Provision Factor and Fair Value Accounting to Earnings Volatility

Abstract

This aim of research is to prove that the loan-loss provision and fair value accounting influence the earnings volatility and the accrual management role in moderating the effect of fair value accounting to earnings volatility. Data were obtained from the annual report of the Directory of Indonesia Capital Market and the Stock Exchange of Indonesia Website. There are 81 samples as a result of a banking company's observation listed on the Stock Exchange in 2014-2016. The analysis of multiple moderated regression was used in this research. Finally, it showed that the loss-loan provision does not affect on earnings volatility, whereas the fair value accounting influenced earnings volatility positively. On the other hand, accrual management strengthens the influence of fair value accounting on earnings volatility

Keywords: loss-loan provision, fair value accounting, profit volatility, and accrual management

DOI: 10.7176/RJFA/11-2-16

Publication date: January 31^st 2020