Accounting Conservatism and Earnings Responsiveness: An Empirical Study of Public Companies in Indonesia
Accounting Conservatism and Earnings Responsiveness: An Empirical Study of Public Companies in Indonesia

Summary/Abstract: Purpose: The purpose of this study is to analyze the influence of accounting conservatism, profitability, growth opportunities, and default risk on the earnings responsiveness coefficient of mining sector companies listed on the Indonesia Stock Exchange during the period of 2020-2022. Design/Methodology/Approach: This study utilizes a quantitative research design with purposive sampling technique to select a sample of 60 mining sector companies listed on the Indonesia Stock Exchange during the period of 2020-2022. The data collected from the financial reports of the selected companies is analyzed using classical assumption tests and multiple regression analysis. Findings: The results of this study indicate that accounting conservatism has a significant positive effect on the earnings responsiveness coefficient of mining sector companies listed on the Indonesia Stock Exchange during the period of 2020-2022. However, profitability and default risk variables do not have a significant effect on the earnings responsiveness coefficient. On the other hand, growth opportunities have a significant negative effect on the earnings responsiveness coefficient. Practical Implications: The findings of this study can be useful for practitioners in making managerial decisions, especially in enhancing the earnings responsiveness of mining sector companies listed on the Indonesia Stock Exchange. Practitioners can utilize accounting conservatism as a tool to improve earnings responsiveness. Additionally, this study provides insights for regulators in determining policies related to the earnings responsiveness coefficient. Regulators can consider growth opportunities in their decision-making processes. Originality/Value: This study contributes to the accounting literature by revealing the influence of different factors on the earnings responsiveness coefficient of mining sector companies in Indonesia. The results of this study can also serve as a basis for further research on other factors that influence the earnings responsiveness coefficient of companies in other sectors.

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