PENGARUH MANAJEMEN LABA, DAN KEPEMILIKAN MANAJERIAL PADA KESEJAHTERAAN PEMEGANG SAHAM PERUSAHAAN TARGET AKUISISI

Abstract

The main accounting issue in this research which can trigger wealth
transfer from acquiring company’s shareholders to target company’s
shareholders is earning management that was done during the last
publication before the acquisition. Therefore, the purposes of this research
are: (1) to test whether the target company’s management performed
earnings management by increasing the amount of earnings which was
reported in the last publication before the acquisition announcement, (2) to
test whether the earnings management which was done by the target
company benefit their shareholders, and (3) to test whether managerial
ownership affects earnings management and the wealth of the target
company’s shareholders.
Hypotheses in this research were developed using agency theory as
the main theory, which was supported by earnings management theory
with the same motivations as this research such as bonus plan motivation,
chief executive officer (CEO) change motivation, and Initial Public Offering
(IPO) motivation, and Efficient Market Hypothesis.
The sample for this research are target companies undergone
successful acquisition in Jakarta Stock Exchange from 1990 to 2005. The
sample consists of 54 target companies. The dependent variable of target
companies shareholders’ wealth, is represented by cumulative abnormal
return (CAR) as the proxy, calculated by using the Market Model. The
independent variable of earnings management is calculated by Modified
Jones Model, and the ownership managerial variable is calculated by
management ownership percentage on target company’ shares. The
research hypothesis is tested by t-test and ordinary least square
regression test.
The result of this research is: (1) the target company is doing
earnings management by increasing discretionary accrual for the last
publication just before the acquisition, (2) the positive effect of earnings
management on target company shareholders wealth at the last
publication just before the acquisition is bigger and more significant
statistically compared with the previous period, and (3) managerial
ownership has positive effect and statistically significant on target
company shareholders’ wealth during the last publication just before the
acquisition.