Mangindaan, Joanne Valesca; Manossoh, Hend ik; Walangi an, Oli ia F ansiske
Ch is ine
A icle
Financial epo ing quali y du ing he Co id-19 pandemic:
E idence om anspo a ion sec o and ou ism/
ec ea ion indus y in Indonesia
Global Business & Finance Re iew (GBFR)
P o ided in Coope a ion wi h:
People & Global Business Associa ion (P&GBA), Seoul
Sugges ed Ci a ion: Mangindaan, Joanne Valesca; Manossoh, Hend ik; Walangi an, Oli ia F ansiske
Ch is ine (2024) : Financial epo ing quali y du ing he Co id-19 pandemic: E idence om
anspo a ion sec o and ou ism/ ec ea ion indus y in Indonesia, Global Business & Finance
Re iew (GBFR), ISSN 2384-1648, People & Global Business Associa ion (P&GBA), Seoul, Vol. 29, Iss. 6,
pp. 86-97,
h ps://doi.o g/10.17549/gb .2024.29.6.86
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Recei ed: Feb. 23, 2024; Re ised: Ap . 3, 2024; Accep ed: May. 1, 2024
† Co esponding au ho : Joanne Valesca Mangindaan1
E-mail: joanne.mangindaan@uns a .ac.id
GLOBAL BUSINESS & FINANCE REVIEW, Volume. 29 Issue. 6 (JULY 2024), 86-97
pISSN 1088-6931 / eISSN 2384-1648∣H ps://doi.o g/10.17549/gb .2024.29.6.86
ⓒ 2024 People and Global Business Associa ion
GLOBAL BUSINESS & FINANCE REVIEW
www.gb jou nal.o g
o inancial sus ainabili y and people-cen e ed global business1)
Financial Repo ing Quali y du ing he Co id-19 Pandemic: E idenc
e
om T anspo a ion Sec o and Tou ism/Rec ea ion Indus y i
n
Indonesia
J
oanne Valesca Mangindaan1a†, Hend ik Manossohb,
Oli ia F ansiske Ch is ine Walangi anc
aDepa men o Business Adminis a ion, Facul y o Social and Poli ical Sciences, Sam Ra ulangi Uni e si y, Indonesia
bDepa men o Accoun ing, Facul y o Business and Economics, Sam Ra ulangi Uni e si y, Indonesia
cDepa men o Business Adminis a ion, Facul y o Social and Poli ical Sciences, Sam Ra ulangi Uni e si y, Indonesia
A
B S T R A C T
Pu pose: The pu pose o his esea ch is o analyze he inancial epo ing quali y du ing he Co id-19 pandemic.
This s udy is ocused on anspo a ion sec o companies, which comp ised o he passenge land anspo a ion
and ai lines indus ies and he companies in ou ism and ec ea ion indus y. This is impo an since hese companies
expe ienced a se e e impac du ing he COVID-19 Pandemic.
Design/me hodology/app oach: To analyze he quali y o inancial epo ing du ing he Co id-19 pandemic, his
s udy occupies he pa ame ic and non-pa ame ic es o di e ence, namely - es pai ed sample and Wilcoxon
signed ank es o compa e he inancial epo ing quali y be ween he pe iod p io and du ing he pandemic.
The inancial epo ing quali y is p oxied by acc ual ea ning managemen .
Findings: This esea ch inds ha he inancial epo ing quali y o companies in passenge land anspo a ion,
ai lines, ou ism and ec ea ion indus ies is signi ican ly lowe du ing he Co id-19 pandemic. Companies in hese
indus ies a emp o conceal hei poo inancial pe o mance du ing he pandemic by oppo unis ically manage hei
ea nings.
Resea ch limi a ions/implica ions: This s udy highligh s he impo ance o high-quali y inancial epo ing o help
in es o s o make be e in es men decisions. This s udy does no speci ically examine he ole o audi o in ensu -
ing he high quali y o inancial epo ing.
O iginali y/ alue: This s udy con ibu es by p o iding new empi ical e idence abou he inancial epo ing quali y
by in es iga ing he impac o Co id-19 on acc ual ea nings managemen p ac ices. To he bes knowledge, his
is he i s s udy ha explo es he issue o inancial epo ing quali y du ing he Co id-19 o passenge land ans-
po a ion, ai lines, ou ism and ec ea ion indus ies in Indonesia.
Keywo ds: Co id-19 pandemic, Financial epo ing quali y, Disc e iona y acc ual, T anspo a ion sec o , Tou ism indus y
ⓒ
Copy igh : The Au ho (s). This is an Open Access jou nal dis ibu ed unde he e ms o he C ea i e Commons A ibu ion
Non-Comme cial License (h ps://c ea i ecommons.o g/licenses/by-nc/4.0/) which pe mi s un es ic ed non-comme cial use, dis ibu ion
,
and ep oduc ion in any medium, p o ided he o iginal wo k is p ope ly ci ed.
Joanne Valesca Mangindaan1, Hend ik Manossoh, Oli ia F ansiske Ch is ine Walangi an
87
I. In oduc ion
The Co id-19 pandemic has caused he global
economy o expe ience he deepes down u n since
he second wo ld wa and has been conside ed as
he g ea es disas e o global heal h o he cen u y
(Nasee e al., 2023; Wo ldBank, 2020). Res ic ions
o ac i i y and e en lockdowns imposed du ing he
pandemic ha e a nega i e impac on p oduc ion,
ope a ions, sales and e enue, which esul ed in he
decline in company p o i s (Alsamhi, Al-O ai i,
Fa han, Al-ahdal, & Siddiqui, 2022; Hu & Zhang,
2021; Shen, Fu, Pan, Yu, & Chen, 2020).
In c isis si ua ions du ing a pandemic, he quali y
o inancial epo ing becomes inc easingly impo an
and ele an . As o ganiza ions sus ain e enue losses,
p epa e o eco e y, and begin o emb ace new
business models, he co ec disclosu e o inancial
pe o mance, changes in s a egy, and managemen 's
pe spec i es become ma e s o conce n (J. J. Tang,
Ka im, & Roy, 2023). In es o s and o he s akeholde s
need imely and anspa en inancial in o ma ion ha
e eals in o ma ion abou he impac o he Co id-19
pandemic on he company's ope a ional pe o mance,
inancial posi ion, liquidi y and u u e p ospec s
(IOSCO, 2020). The high quali y o inancial epo ing
will help s akeholde s in making in es men decisions
o o he business- ela ed decisions. Howe e , in a
s a e o c isis du ing he Co id-19 pandemic,
companies may manipula e inancial s a emen s o
imp o e he appea ance o hei inancial posi ion.
Resea ch on he quali y o inancial epo ing in
imes o c isis, including du ing he Co id-19
pandemic, is no ye conclusi e (Saha, 2022). Some
p e ious s udies concluded ha in imes o c isis,
he quali y o inancial epo ing will inc ease because
companies wan o inc ease us by educing
in o ma ion asymme y (A hu , Tang, & Lin, 2015;
Azizah, 2021; Fi mansyah & A diansyah, 2020).
Howe e , he e a e also s udies ha documen he
low quali y o inancial epo ing du ing he Co id-19
pandemic due o inc eased ea nings managemen
p ac ices ca ied ou by companies (Angelina &
Lind awa i, 2022; Hsu & Yang, 2022). O he s udies
also highligh he inabili y o he audi o s o de ec
i egula i ies in ea ning managemen p ac ices ha
p oduce lowe audi quali y du ing es ic ion in he
Co id-19 pandemic implying lowe inancial epo ing
quali y (Chen, Chiang, & Vo en, 2023; Gong, Ho,
Jin, & Kanaga e nam, 2022)
This s udy, hen, a emp s o ill he gap by
analyzing he inancial epo ing quali y du ing he
Co id-19 pandemic in Indonesia. This s udy aims
o p o ide answe o he ques ion o whe he he
Co id-19 pandemic a ec s he quali y o inancial
epo ing in Indonesia. This s udy speci ically o e s
se e al dis inc cha ac e is ics wi h o he esea ches.
Fi s , his s udy analyzes he impac o he Co id-19
pandemic on inancial epo ing quali y in a single
coun y se ing, i.e. in Indonesia. Isid o, Nanda and
Wysocki (2020) a gue ha s udy in a single se ing
allows a ho ough insigh and o e s oppo uni ies
o explo e dis inc da ase ha a e o en una ailable
o a la ge numbe o coun ies. Second, as he la ges
economy in Sou h Eas Asia (Wo ldBank, 2020),
he economic consequences o he Co id-19 pandemic
in Indonesia a e immense and he e o e may ampli y
he pandemic impac on he quali y o inancial
epo ing. Based on a su ey by he Minis y o
Wo k o ce, he e we e a ound 88% o companies
expe iencing ope a ional losses due o he pandemic
(2020). Thi d, as some indus ies will expe ience
di e en impac o he Co id-19 Pandemic om
o he s, his s udy ocuses on he impac o he
Co id-19 on inancial epo ing quali y o companies
in he Passenge Land T anspo a ion, he Ai lines
and he ou ism and ec ea ion indus y. Among
indus ies ha aced ha dship du ing he pandemic,
companies in anspo a ion sec o and ou ism and
ec ea ion indus y a e hose ha a e mos a ec ed
(Hamsal, Abdinago o, Zulka nain, Leonand i, &
Ichsan, 2022; Jang, 2021; Suas ini, Ni, Sihoming, &
Wi au ama, 2022).
The anspo a ion sec o , which consis s o he
Passenge Land T anspo a ion and Ai lines indus y,
is one o he sec o s ha expe ienced se e e impac
o he pandemic, causing e enue and p o i decline
GLOBAL BUSINESS & FINANCE REVIEW, Volume. 29 Issue. 6 (JULY 2024), 86-97
88
in companies, and some o he companies ha e e en
expe ienced huge losses (Aldin, 2021; He, Sun,
Zhang, & Li, 2020; Puspa, 2021). Beside he
anspo a ion sec o , companies in ou ism and
ec ea ion indus y we e also se e ely a ec ed by
he Co id-19 pandemic and had o ope a e in su i al
mode a he han making p o i (Hamsal e al., 2022).
The ho el sec o losses amoun ed o IDR 30 illion
and es au an s IDR 40 illion due o a signi ican
educ ion on he ho el oom occupancy a e (Alsamhi
e al., 2022; Amalia, Sulasno, & Sinaga, 2021; Deli,
Sambodo, Suganda, & P amana, 2022; Wahyudi,
2020). The unce ain ies and dis up ion aced by
companies in Passenge Land T anspo a ion, he
Ai lines and he ou ism and ec ea ion indus y du ing
he Co id-19 Pandemic, a ec ed da a collec ion,
es ima ion, e enue ecogni ion, disclosu e p ocesses
and e en inc eased he isk o es a emen s (C owe,
2020; Posne , 2021); and hence a ec ing he inancial
epo ing quali y. The e o e, s udying he impac o
he Co id-19 pandemic on he inancial epo ing
quali y o hese companies is ele an and signi ican .
Resul s om his esea ch is expec ed o con ibu e
as being he i s s udy ha p o ide new empi ical
e idence ela ed o inancial epo ing quali y ha
in es iga es he impac o Co id-19 on acc ual
ea nings managemen p ac ices on companies in
anspo a ion sec o and ou ism and ec ea ion
indus y. The indings om his s udy indica e a
educ ion in he quali y o inancial epo ing o
companies in Passenge Land T anspo a ion, Ai lines,
Tou ism and Rec ea ion indus ies du ing he Co id-19
pandemic, despi e he ac ha as lis ed companies,
hei inancial epo s ha e been audi ed by ex e nal
audi o s. Companies in hese indus ies a e indica ed
o al e hei ea nings and as shown by he signi ican
income-inc easing disc e iona y acc uals, which
lends suppo o he claim ha he audi o s a e unable
o de ec i egula i ies in inancial epo s du ing he
pandemic (Gong e al., 2022), hence lowe ing he
inancial epo ing quali y. Du ing he pandemic, he
op managemen a emp s o d ess up he company's
inancial pe o mance by ca ying ou ea nings
managemen , which esul s in a dec ease in he quali y
o inancial epo ing du ing he COVID-19 pandemic.
The emainde o his s udy is o ganized as ollow:
p io s udies su ounding inancial epo ing quali y
a e e iewed in he nex sec ion, ollowed by he
esea ch me hodology and he indings and discussion
sec ion. Conclusion is hen p esen ed in he inal
sec ion.
II. Li e a u e Re iew
Financial epo s ac as means o communica ing
be ween companies and ex e nal pa ies, which
con ain in o ma ion as a basis o making in es men
and business decisions. Financial epo s assume
c ucial ole in enabling ex e nal capi al supplie s o
assess he pe o mance o he managemen and in
educing in o ma ion asymme y o os e anspa ency
(Mahdi Sahi, Mahdi Sahi, Abbas, & F. A. Kha ib,
2022). In o ma ion in inancial epo s becomes
use ul i he in o ma ion con ains ele ance and
ep esen a ional ai h ulness cha ac e is ics, and
mee s he enhancing quali a i e cha ac e is ics o
compa abili y, e i iabili y, imeliness and
unde s andabili y (IASB, 2023).
Despi e an ex ensi e amoun o s udy conduc ed
o e he pas ew decades, a p ecise and uni e sally
accep ed de ini ion o he quali y o accoun ing
in o ma ion in inancial epo s emains elusi e (Fuad,
Julia o, & Ha o, 2019). Tang, Chen and Lin (2016)
also a gue ha he quali y o inancial epo ing could
di e due o i s complex in e ac ions among many
a iables, hus i is inhe en ly di icul o measu e.
Tang e al. (2016) e e inancial epo ing quali y
o as he deg ee o which he inancial epo s p o ide
ue and accu a e in o ma ion abou he unde lying
inancial condi ion and economic pe o mance. In
addi ion, inancial epo ing quali y is de ined by he
p ecision o inancial epo s in con eying in o ma ion
abou a i m's ope a ions, in pa icula i s cash lows,
in o de o in o m equi y in es o s (Biddle, Hila y, &
Ve di, 2009). Jones and Blanche (2000) also sugges
Joanne Valesca Mangindaan1, Hend ik Manossoh, Oli ia F ansiske Ch is ine Walangi an
89
ha inancial epo ing quali y should also be able
o mee he needs o he use and p o ec he in es o s.
The quali y o inancial epo ing is measu ed h ough
he ex en o which inancial s a emen s p o ide
accu a e and use ul in o ma ion o in es o s in hei
in es men decisions (Schippe , 2003; Schippe &
Vincen , 2003). In o de o make sound in es ing
decision, in es o s u ge o ob ain high quali y o
inancial epo ing as e lec ed by he quali y o
ea nings (Fuad e al., 2019; He a h & Alba qi, 2017).
Dechow e al. (2010) sugges ha magni ude o
acc uals is one p oxy o ea nings quali y. Companies
wi h la ge acc uals ha e lowe quali y o ea nings
because ex eme acc uals ep esen a less pe sis en
componen o ea nings (Abdullae , 2019; Dechow
e al., 2010). Acc uals a e conside ed as a c ucial
elemen in inancial epo s, e lec ing he disc epancies
be ween epo ed ea nings and cash lows due o
he iming di e ences in paymen eceip s and he
deli e y o goods and se ices (Fuad e al., 2019).
Acc ual quali y is widely u ilized o measu e inancial
epo ing quali y because companies o en manipula e
ea nings h ough disc e iona y acc uals, esul ing in
poo inancial epo ing quali y (Dimi opoulos &
As e iou, 2010). The abili y o accu a ely measu e
acc uals quali y is inc easingly i al as i mi o s
he quali y o inancial epo ing (Fuad e al., 2019;
Nwaobia, Kwa bai, Olajumoke, & Ajibade, 2013).
He a h and Alba qi (2017) u he sugges ea nings
quali y is in luenced by manage ial incen i es, whe e
he g ea e he ex en o which a company engage
in ea nings managemen , he lowe he company's
inancial epo ing quali y. The e o e, he absence
o ea nings managemen p ac ices is also e med as
inancial epo ing quali y (Cohen, K ishnamoo hy,
& W igh , 2004). Ea nings managemen is a c i ical
co po a e p ac ice ha impac s he igu es epo ed
in inancial s a emen s and in luences he decision-
making o inancial epo use s (Lee & Chun, 2023).
The ea ning managemen p ac ice exploi s he
manage ial disc e ion es ablished in he accoun ing
s anda d and dis o s he ea nings use ulness a ibu e
o i s po en ial use s (Hasan, Aly, & Hussainey, 2022),
which in u n lowe he quali y o inancial epo ing.
P io o he pandemic, inancial epo ing quali y
esea ch examined he quali y o inancial epo ing
in he con ex o accoun ing scandals and ha moniza ion
o accoun ing s anda ds in ensu ing anspa ency and
compa abili y in accoun ing ansac ions (Cam e man
& Wielhouwe , 2019; Gaje szky, 2015; He a h &
Alba qi, 2017; Mbi , Agyemang, Tackie, & Abeka,
2020). O he s udy analyzes quali y o disclosu e
in inancial epo in he con ex o co po a e
go e nance mechanisms such as boa d size, boa d
mee ings, and audi commi ee size and conclude
ha hese co po a e go e nance aspec s ha e a
posi i e impac on disclosu e quali y (E iqa &
Al-Khazaleh, 2023)
Du ing he Co id-19 pandemic, good inancial
epo ing quali y has become inc easingly impo an .
Al hough he e a e s anda ds in he p epa a ion o
inancial s a emen s, in eali y, he p epa a ion o
inancial s a emen s using p incipal-based accoun ing
is me ely based on es ima es and judgmen s om
managemen , which gi es managemen eedom in
he choice o accoun ing me hods (Angelina &
Lind awa i, 2022; Mbi e al., 2020).
Based on agency heo y, du ing a c isis like he
Co id-19 pandemic, he managemen o he companies
can manipula e inancial s a emen s in o de o con inue
o achie e hei a ge p o i (Fi mansyah &
A diansyah, 2020). P e ious li e a u es documen ed
he inc ease in ea ning managemen p ac ices du ing
he Co id-19 pandemic (Angelina & Lind awa i,
2022; Hsu & Yang, 2022). Fo example, using
company da a in he UK, Hsu and Young (2022)
concluded ha du ing he Co id-19 pandemic, he
quali y o inancial epo ing dec eased, none heless
he nega i e impac o he pandemic was mi iga ed
by he exis ence o co po a e go e nance mechanisms
p oxied by he size o he boa d o commissione s.
Ano he s udy ha in es iga ed he impac o
pandemic on ea nings managemen p ac ices in
Eu ope sugges ed ha du ing he pandemic inancial
epo ing quali y became less eliable as he i ms
engage in income-inc easing ea nings managemen ,
which esul ed in low quali y o inancial epo ing
since he in o ma ion p esen ed in he epo s did
GLOBAL BUSINESS & FINANCE REVIEW, Volume. 29 Issue. 6 (JULY 2024), 86-97
90
no uly ep esen he ac ual pe o mance (Lassoued
& Khanchel, 2021). Simila esul also disco e ed
by Ryu and Chae (2022) and Chen e al. (2023)
ha sugges ed posi i e and signi ican disc e iona y
acc uals we e epo ed by se ice and dis ibu ion
companies in Ko ea and companies lis ed he Taiwan
S ock Exchange (TSE) du ing he pe iod o he
Co id-19 pandemic, indica ing lowe inancial
epo ing quali y o he engagemen o ea ning
managemen p ac ices.
Some pas s udies, on he con a y, a gued ha
he quali y o inancial epo ing will be be e because
companies wan o inc ease us by educing
in o ma ion asymme y (A hu e al., 2015; Azizah,
2021; Fi mansyah & A diansyah, 2020). Lee and
Chun (2023) sugges ed ha inancially cons ained
companies, like hose in he anspo a ion sec o and
ou ism/ ec ea ion indus y, may use disc e iona y
acc uals s a egically o signal posi i e ou look o
ex e nal capi al p o ide s, allowing hem o gene a e
capi al equi ed o in es men . These inancially
cons ained companies do no depend on eal ac i i ies
managemen , which sac i ices long- e m cash lows
and i m alue (Lee & Chun, 2023). Ramdani,
P a omo and Zuliansya (2022) also concluded ha
he e we e no di e ences in acc ual ea nings
managemen and eal ea nings managemen du ing
he Co id-19 pandemic compa ed o he pe iod be o e
he Co id-19 pandemic in companies in he ho el,
ou ism, es au an and e ail sub-sec o s.
III. Me hods
This s udy in es iga es he inancial epo ing
quali y du ing he Co id-19 pandemic and ocuses
Indonesia because i is he la ges economy in Sou h
Eas Asia and ank en h in he wo ld by pu chasing
powe o pa i y (Wo ld Bank, 2020). As he
pu pose o his s udy is o examine companies in
anspo a ion, ou ism and ec ea ion indus y, he
inancial da a o hese companies we e ob ained om
he En i onmen al, Social, and Co po a e Go e nance
In elligence (ESGI) da abase. Some da a ha we e
una ailable in he da abase we e manually hand-
collec ed om he companies' inancial epo . Lis
o he companies included in he sample can be ound
in Appendix 1.
The sample pe iod spanned om 2018 o 2021
o allow he compa ison be ween he p e-pandemic
(i.e., 2018-2019) and pandemic pe iods (i.e., 2020-
2021). A e excluding obse a ions wi h missing
da a, he inal sample consis s o 180 i m-yea
obse a ions. The sample selec ion p ocess is
displayed in Table 1.
The quali y o inancial epo ing is p oxied by
he acc ual ea nings managemen (AM) a iable.
Acc ual ea nings managemen is measu ed by
disc e iona y acc uals based on he Ko ha i e al
(2005) model, he same model used by p e ious
s udies (Angelina & Lind awa i, 2022; Fi mansyah
& A diansyah, 2020). The model is p esen ed in he
equa ion below:
Sample Selec ion To al Obse a ion
( i m-yea )
Indonesia lis ed companies in Land Passenge T anspo a ion indus y 32
Add: Indonesia lis ed companies in Ai lines indus y 12
Add: Indonesia lis ed companies in Tou ism and Rec ea ion indus y 180
Less: missing da a 44
Final Sample 180
(Sou ces: Da a p ocessed, 2023)
Table 1. Sample selec ion p ocess
Joanne Valesca Mangindaan1, Hend ik Manossoh, Oli ia F ansiske Ch is ine Walangi an
91
⊳ ⊳
(1)
Whe e Acc uals =
income a e ax - cash om
ope a ion
; TA
-1
= o al asse a -1;
∆
REV = changes
in e enue (REV
- REV
-1
);
∆
REC = changes in
ecei able (REC
- REC
-1
); PPE = plan , p ope y,
dan equipmen ; ROA = e u n on asse (ne
income/ o al asse );
𝜀
= eg ession esidual, which
is he es ima ion o
disc e iona y acc uals.
Disc e iona y acc uals indica e ea nings
managemen , which is he oppo unis ic managemen
ac ions ha manipula e inancial s a emen s
(ea nings) o hide hei poo inancial pe o mance
by inc easing hei p o i , i.e. income-inc easing
disc e iona y acc uals (posi i e alue o disc e iona y
acc uals) o by educing accoun ing p o i s o delay
ea nings epo ing, i.e. income-dec easing disc e iona y
acc uals (nega i e alue o disc e iona y acc uals).
A high (absolu e alue) disc e iona y acc ual alue
means low quali y o he company's inancial epo ing.
The aim o his s udy is o analyze he quali y
o inancial epo ing. In o de o do so, his s udy
compa es acc ual ea nings managemen a iables
be ween p e- Co id-19 (2018 and 2019) and pos -
Co id-19 (2020 and 2021). To es he di e en o
acc ual ea nings managemen be ween be o e and
du ing Co id-19, his s udy hen occupies bo h
pa ame ic and non-pa ame ic es o di e ence,
namely pai ed-sample - es and Wilcoxon signed
ank es . A high disc e iona y acc ual absolu e alue
means low quali y o he company's inancial epo ing.
IV. Resul s and Discussion
A. Desc ip i e S a is ic
Table 2 p esen s desc ip i e s a is ics o he
componen s used o calcula e Acc uals Ea ning
Managemen based on he Ko ha i e al (2005) model.
Panel A epo s desc ip i e s a is ics o all samples
(2018 - 2021) wi h a o al o 180 obse a ions.
Desc ip i e s a is ics o he yea s be o e he
COVID-19 pandemic and du ing he COVID-19
pandemic a e p esen ed in Panels B and C.
Based on Table 1 panel A, he mean AM in he
pooled sample is 0.457. Fu he mo e, when compa ed
o his alue, he mean o AM be o e he COVID-19
pandemic (in 2018 and 2019) epo ed in panel B,
i.e. 0.405, is smalle han he alue o AM in he
pooled sample. Du ing he COVID-19 pandemic (in
2020 and 2021), howe e , he mean o AM ( epo ed
in Panel C) is much la ge , i.e. 0.509, han bo h
he pooled sample and he pe iod p e- Co id-19.
This posi i e AM may indica e he occu ence o
income inc easing ea ning managemen in he en i e
sample; and his alue is inc easing du ing he
COVID-19 pandemic.
When AM is decomposed by each a iable ha
a e used o calcula e i , he only a iable ha was
highe in he pandemic pe iod was he o al asse
(TA). Be o e he pandemic, he o al asse s o
companies in he passenge land anspo a ion, he
ai line and he ou ism/ ec ea ion indus ies amoun ed
o IDR 3.7 illion (TAb) and inc eased o IDR 4.9
illion du ing he pandemic (TAa).
The pe o mance o sales and cash low om
ope a ing ac i i ies o he companies, on he o he
hand, dec eased conside ably du ing he pandemic
(Re a and CFOa) compa ed o be o e he pandemic
(Re b and CFOb). Fu he mo e, p io o he pandemic,
he a e age sales and ope a ing cash lows o he
companies amoun ed o IDR 2.3 illion and IDR
154 billion; none heless hese igu es dec eased
d as ically o IDR 790 billion and IDR 43 billion
du ing he COVID-19 pandemic. The ea ning a e
ax be o e he pandemic had exhibi ed a loss o IDR
9.5 billion. Du ing he pandemic, he losses o
companies in hese indus ies became much g ea e ,
eaching IDR 1.1 illion. Among he inancial
a iables ha a e used o measu e AM, only he
alue o al asse s ha inc eased om IDR Rp. 3.7
illion du ing he pe iod be o e he pandemic o IDR
4.9 illion in he pe iod o he pandemic.
GLOBAL BUSINESS & FINANCE REVIEW, Volume. 29 Issue. 6 (JULY 2024), 86-97
92
B. Empi ical Resul s
The empi ical esul s o es he di e ences in
he quali y o inancial epo ing as p oxied by AM
be o e and du ing he COVID-19 a e p esen ed in
Table 3. Panel A o Table 3 p esen s he esul s
o pai ed sample - es , whe eas Panel B o he able
he displays esul s o he Wilcoxon Signed Rank
Tes .
The esul s om he - es pai ed sample (Table
3 Panel A) show ha he alue o AM is highe
du ing he COVID-19 pandemic (AMa) when
compa ed o be o e he COVID-19 Pandemic (AMb).
The di e ence be ween he AM be o e and a e
is 0.1041 and he alue is signi ican a he 5% le el
( -s a is ic = 2.595 and p- alue o 0.011). The posi i e
and inc easing alue o AMa indica es ha an income-
inc easing ea ning managemen . The companies in
he passenge land anspo a ion indus y, he ai line
indus y and he ou ism and ec ea ion indus y,
which su e ed big loss due o he es ic ions and
lock down in du ing he pandemic, a emp o d ess
up hei ea nings pe o mance by inc easing he
p o i s.
Panel B o Table 3 shows he esul s om he
Wilcoxon Signed Rank Tes . The non-pa ame ic es
esul s con i m he indings o om he pa ame ic
es ing wi h a highe signi icance le el o 1%.
Speci ically, he esul s in Panel B show ha he e
a e 54 obse a ions wi h la ge AM alues (posi i e
VAR N Mean S d De Min Max
Panel A: Pooled (2018-2021)
AM 180 0.457 0.292 0.012 1.481
TA 180 4,423,077,301,641 15,949,228,793,744 52,239,377,000 152,192,781,540,539
Re 180 1,562,631,546,522 6,975,341,992,355 658,372,000 64,488,745,205,000
EAT 180 -589,912,462,151 5,184,280,055,827 -59,558,915,774,640 619,842,764,000
ROA 180 -0.028 0.203 -0.659 2.071
CFO 180 98,657,234,077 548,585,977,666 -1,182,956,753,647 5,329,401,276,981
Panel B: Be o e COVID (2018 dan 2019)
AMb 90 0.405 0.246 0.012 1.457
TAb 90 3,778,417,827,434 10,388,350,752,645 52,239,377,000 61,938,393,491,132
Re b 90 2,317,857,296,033 9,472,712,872,609 1,943,955,000 64,488,745,205,000
EATb 90 -9,534,200,642 339,665,932,051 -2,643,105,939,000 619,842,764,000
ROAb 90 -0.011 0.118 -0.659 0.115
CFOb 90 154,332,162,737 750,212,864,329 -1,182,956,753,647 5,329,401,276,981
Panel C: Du ing COVID (2020 dan 2021)
AMa 90 0.509 0.325 0.045 1.481
TAa 90 4,967,456,413,192 19,493,663,650,106 61,585,045,937 152,192,781,540,539
Re a 90 790,241,575,432 2,449,486,961,979 658,372,000 21,049,336,922,000
EATa 90 -1,150,944,781,610 7,238,128,205,721 -59,558,915,774,640 258,812,539,573
ROAa 90 -0.041 0.253 -0.580 2.071
CFOa 90 43,614,975,061 198,440,984,402 -160,078,398,107 1,578,270,145,797
(Sou ces: Da a p ocessed, 2023)
Whe e: AM = Disc e iona y Acc ual, AMb = Disc e iona y Acc ual be o e he pandemic, AMa = Disc e iona y Acc ual a e he pandemic,
TA = To al Asse , TAb = To al Asse be o e he pandemic, TAa = To al Asse a e he pandemic, Re = Sales, Re b = Sales be o e
he pandemic, Re a = Sales a e he pandemic, EAT = Ea ning A e Tax, EATb = Ea ning A e Tax be o e he pandemic, EATa =
Ea ning A e Tax a e he pandemic, ROA = Re u n on Asse , ROAb = Re u n on Asse be o e he pandemic, ROAa = Re u n on Asse
a e he pandemic, and CFO = Cash Flow om Ope a ing Ac i i ies, CFOb = Cash Flow om Ope a ing Ac i i ies be o e he pandemic,
CFOa = Cash Flow om Ope a ing Ac i i ies a e he pandemic
Table 2. Desc ip i e s a is ic
Joanne Valesca Mangindaan1, Hend ik Manossoh, Oli ia F ansiske Ch is ine Walangi an
93
anks) du ing he COVID-19 pandemic (AMa)
compa ed o be o e he pandemic (AMb) and 36
obse a ions wi h smalle AM alues (nega i e anks)
when compa ed be ween he pandemic (AMa) and
be o e he COVID-19 pandemic (AMb). Resul s a e
signi ican a he 1% le el o signi icance.
The empi ical esul s in Table 3 abo e show ha
an inc ease in he AM alue as a p oxy o inancial
epo ing quali y indica es a dec ease in inancial
epo ing quali y du ing he COVID-19 pandemic.
This esul con i ms he esul s o p e ious s udies,
which concluded ha he quali y o inancial epo ing
du ing he COVID-19 pandemic has dec eased
(Angelina & Lind awa i, 2022; Chen e al., 2023;
Hsu & Yang, 2022; Lassoued & Khanchel, 2021;
Ryu & Chae, 2022).
Du ing he Co id-19 Pandemic, companies in
passenge land anspo a ion, ai lines, ou ism and
ec ea ion indus ies ace some sys ema ic challenges.
Fi s , as a esul o he dis up ion o hei business
ope a ions, he companies a e challenged wi h he
issue o going conce n assessmen due o he
unce ain ies abou hese companies' abili y o con inue
ope a ing because o a el es ic ions and social
dis ancing. Second, companies in hese indus ies
expe ienced decline in e enue because hey ha e
o hal o ope a ions and needed o eco d ai alue
losses o impai men losses on hei in es men s due
o ma ke ola ili y and economic unce ain y du ing
he pandemic (C owe, 2020; Posne , 2021). Thi d,
a ious social and physical dis ancing policies,
speci ically wo k om home policy, may hinde he
ac i i ies o he audi o s o pe o m i s audi p ocess
and collec comple e audi e idence due o limi ed
access and a el cons ain s, and hus limi he abili y
o he audi o s o de ec i egula i ies in inancial
epo s (Badawy, 2021; Chen e al., 2023; Gong e
al., 2022). These challenges may c ea e he incen i e
o he managemen o ac oppo unis ically o
manipula e hei epo ed ea nings and engage in
income-inc easing ea nings managemen . In acco dance
wi h agency heo y, company managemen has made
income-inc easing disc e iona y acc uals as an e o
o con inue o achie e hei a ge p o i and hinde
hei poo pe o mance du ing he Co id-19 pandemic.
V. Conclusion
This s udy documen s a signi ican di e ence in
he quali y o inancial epo ing in companies in
passenge land anspo a ion, he ai line, and
ou ism/ ec ea ion indus ies be ween he pe iod
be o e and du ing he COVID-19 pandemic. This
Panel A: T-Tes Pai ed Sample
Pai N Mean S d. De S d. E o Mean -s a is ic
AMa - Amb 90 0.1041 0.3805 0.0401 2.595**
Panel B: Wilcoxon Signed Rank Tes
Pai Ranks N Mean Rank Sum Rank z-s a is ic
AMa - AMb Nega i e anks 36a38.7222 1394 -2.629***
Posi i e Ranks 54b50.0185 2701
Ties 0c
To al 90
(Sou ces: Da a p ocessed, 2023)
a acc ual ea ning managemen du ing pandemic (AMa) < acc ual ea ning managemen be o e he pandemic (AMb); b acc ual ea ning
managemen du ing pandemic (AMa) > acc ual ea ning managemen be o e (AMb);
c acc ual ea ning managemen du ing (AMa) = acc ual ea ning managemen be o e (AMb) >
*** signi ican a le el 1%, ** signi ican a l 5%
Table 3. Empi ical esul s: Tes o di e ence AM be ween p e- Co id-19 and pos Co id-19
