This research is aimed to examine (1) effect of managerial ownership on informative earnings management, (2) effect of institutional ownership on informative earnings management, (3) effect of foreign ownership on informative earnings management. Research sample are 123 manufacture companies listed in Indonesian Stock Exchange 2013-2017. Ownership measured by proportion of company’s share held by management, institution, and foreign shareholders. Informative earnings management is dummy variable which measured by comparing discretionary accruals and earnings growth. Data analysis uses logistic regression test. Results show that managerial ownership has no effect on informative earnings management, indicates that there is still agency conflict between owner-manager as minority shareholders with majority shareholders. Institutional and foreign ownership has effect on informative earnings management, indicates that institution and foreign shareholders have effective monitoring to reduce opportunist earnings management and increase informative earnings management. As expected, shareholders will reduce opportunist earnings management and increase informative earnings management, because informative earnings management reduces information asymmetric and increases share value.
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To cite this article: Putra, A. A., Mela, N. F. (2019). Effect of Ownership Types on Informative Earnings Management, International Journal of Academic Research in Accounting, Finance and Management Sciences 9 (2): 74-82.
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