The effect of financial distress using the Altman and Springate Models on stock return in mediated earnings management

Abstract

This study aims to examine and analyze the effect of financial distress with the Altman and Springate Models on stock returns either directly or indirectly by involving earnings management as a mediation. This study uses secondary data from Textile and Garment Companies listed on the Indonesia Stock Exchange from 2015-2019, with a sample of 20 companies using sampling so that 100 observations are obtained. The data is obtained from the annual financial statements. The data analysis technique used SEM-PLS with the help of WarpPLS 6.0 software. The results of the study provide empirical evidence that financial distress has a positive effect on earnings management, while financial distress and earnings management has a negative effect on stock returns. Earnings management is able to mediate the effect of financial distress on stock returns.

Keywords: {'name': 'Financial distress, earnings management, stock returns '}

Authors & affiliations

Faradisa Bachmid
Affiliation not supplied

Sumiati Sumiati
Affiliation not supplied

Siti Aisjah
Affiliation not supplied

Deposited references

Supplied references, not a list of publications citing this article.

Bauer, J., & Agarwal, V. (2012). Distress Risk and Stock Returns?: The neglected Profitability Effect. 40.

Brigham, E. F. dan J. F. H. (2014). Dasar-Dasar Manajemen Keuangan (11th ed.). Salemba Empat.

DOI: 10.22219/jrak.v8i1.28

DOI: 10.24912/jpa.v1i2.5020

DOI: 10.1016/S2212-5671(15)01100-4

DOI: 10.1016/j.jacceco.2005.01.002

DOI: 10.1016/0304-405X(76)90026-X

DOI: 10.1108/03074351311294007

DOI: 10.1093/rfs/hhv009

Halim, D. A., & Atmadja, A. S. (2017). Pengaruh Earnings Management terhadap Stock Returns pada Perusahaan LQ45. Business Accounting Review, 5(2), 685–696.

Hartono, J. (2013). Teori Dan Analisis Investasi (8th ed.). BPFE: Yogyakarta.

Hartono, J. (2017). Teori Portofolio Dan Analisis Investasi (11th ed.). BPFE: Yogyakarta.

DOI: 10.9744/jak.19.1.1-12

Karina, R. (2018). The Effect Of Financial Distress And Audit Quality On Earnings Management. Global Financial Accounting Journal, 2(1), 63–70.

DOI: 10.29407/nusamba.v4i2.12651

DOI: 10.30996/jea17.v4i01.3286

Nazalia, N., & Triyanto, D. N. (2018). Pengaruh Free Cash Flow, Financial Distress, Dan Employee Diff Terhadap Manajemen Laba. Jurnal Akuntansi, Auidt Dan Sistem Informasi Akuntansi, 2(3), 93–104.

DOI: 10.22441/profita.v11.01.010

Ni Putu Ayu Desy Indrayanti, dan M. G. W. (2017). Pengaruh Menajemen Laba Pada Return Saham Dengan Kualitas Audit Dan Corporate Governance Sebagai Variabel Pemoderasi. E-Jurnal Akuntansi, 20(3), 1762–1790.

Puspita, I. L. (2017). Effect Of Earnings Management On The Market Reaction With Managerial Ownership As Variable Moderation. Jurnal Ilmiah GEMA EKONOMI, 7(1), 1013–1030.

DOI: 10.5267/j.msl.2018.6.015

DOI: 10.1016/j.jacceco.2006.01.002

Scott W.R. (2015). Financial Accounting Theory (7th ed.). Prentice-Hall International Inc.

DOI: 10.30871/jaba.v3i2.1730

Tandelilin, E. (2010). Portofolio dan Investasi (1st ed.).

DOI: 10.22441/profita.2018.v11.02.006

Yusrianti, H., & Satria, A. (2014). Pengaruh Manajemen Laba (Earning Management) Terhadap Return Saham Pada Perusahaan Manufaktur Yang Terdaftar Di Bursa Efek Indonesia. Jurnal Ilmiah Bisnis Dan Terapan, 11(1), 1–18.