Sustainable Business Accounting and Management Review

Key Drivers of Earnings Management in Indonesian Stock Market-Listed Insurance Companies

Tri Permana — 2026-03-31

Purpose: The purpose of this study is to investigate whether leverage, company performance, and the percentage of shares offered to the public during an IPO significantly influence earnings management practices in insurance companies listed on the Indonesia Stock Exchange. By focusing on these financial and structural factors, the research aims to provide empirical evidence on how internal and external pressures shape managerial decisions related to earnings reporting.

Method: The study employs a quantitative approach using secondary data drawn from insurance companies that went public on the Indonesia Stock Exchange. The variables analyzed include leverage ratios, company performance measured by Return on Assets (ROA), and the proportion of shares offered to the public during the IPO. Multiple regression analysis was applied to examine the relationship between these independent variables and earnings management, ensuring statistical rigor in testing the proposed hypotheses.

Findings: The findings reveal that leverage, company performance, and the percentage of shares offered at IPO all have an effect on earnings management. However, among these variables, leverage emerges as the most dominant factor influencing managerial behavior. While ROA and IPO share percentage also show an impact, their effects are less pronounced compared to leverage, highlighting the critical role of debt obligations in shaping earnings management strategies.

Implication: These results suggest that companies with higher leverage are more likely to engage in earnings management, possibly to meet debt covenants or maintain investor confidence. For regulators and stakeholders, this underscores the need to monitor leverage levels as a key indicator of potential earnings manipulation. It also implies that IPO structures and performance metrics should be carefully evaluated to ensure transparency in financial reporting.

Originality: This study contributes originality by focusing specifically on insurance companies undergoing IPOs in Indonesia, a sector and context that has received limited scholarly attention. By integrating leverage, performance, and IPO share percentage into a single framework, the research provides a comprehensive view of earnings management drivers and highlights leverage as the most influential factor, offering new insights for future studies

Exploring CSR Disclosure and Tax Avoidance: Profitability as a Moderating Variable in Indonesian Manufacturing Firms

Revita Permata Siswanto — 2026-03-31

Purpose: The study aims to provide empirical evidence on the relationship between Corporate Social Responsibility (CSR) disclosure and tax avoidance, while examining profitability as a moderating variable. By focusing on manufacturing companies listed on the Indonesia Stock Exchange (IDX), the research seeks to clarify whether CSR practices can reduce aggressive tax behavior regardless of financial performance.

Method: The research employs a quantitative approach using purposive sampling to select 37 manufacturing firms from the IDX. CSR disclosure is measured through the Global Reporting Initiative (GRI) G4 guidelines, tax avoidance is proxied by the Effective Tax Rate (ETR), and profitability is assessed using Return on Assets (ROA). This methodological framework ensures consistency in evaluating the interaction among the variables.

Findings: The results reveal that CSR disclosure significantly influences tax avoidance, with higher CSR transparency linked to lower levels of tax avoidance practices. However, profitability does not moderate this relationship. Whether firms achieve high or low profitability, CSR disclosure consistently affects tax avoidance behavior.

Implication: These findings highlight important implications for regulators and corporate managers. Strengthening CSR reporting can serve as an effective mechanism to curb tax avoidance, independent of profitability levels. This suggests that ethical responsibility embedded in CSR may outweigh financial incentives in shaping tax behavior.

Originality: The originality of this study lies in its focus on Indonesian manufacturing firms and its integration of profitability as a moderating factor. By demonstrating that profitability does not alter the CSR–tax avoidance relationship, the research contributes novel insights to the literature and encourages further exploration of other moderating variables.

Stock Market Response to Rising Fuel Prices in 2022

Canta Nandiwardhana — 2026-03-31

Purpose: The purpose of this study is to test and analyze the differences in abnormal stock returns and trading volume activity before and after the announcement of the fuel price increase on September 3, 2022. The research focuses on companies listed in the LQ45 index, aiming to determine whether the capital market reacted significantly to this policy change. By examining the behavior of stock prices and trading volumes, the study seeks to provide insights into how investors and the broader market respond to macroeconomic events such as fuel price adjustments.

Method: This study employs an event study methodology with an observation period of ten days, consisting of five days before and five days after the announcement of the fuel price hike. The population includes 45 companies listed in the LQ45 index during the period from August 28, 2022, to September 9, 2022. Data analysis was conducted using a paired sample t-test to evaluate differences in abnormal returns and trading volume activity across the two periods. This approach allows for a rigorous comparison of market behavior surrounding the event.

Findings: The findings indicate that there is no significant difference in abnormal stock returns or trading volume activity before and after the announcement of the fuel price increase among companies listed in LQ45. This suggests that the capital market did not exhibit a strong reaction to the event, and both stock prices and trading volumes remained relatively stable despite the policy change.

Implication: The implications of this study highlight that fuel price hikes, while impactful in broader economic contexts, may not necessarily trigger immediate or significant reactions in the capital market. For policymakers, this suggests that investor sentiment in Indonesia’s capital market may be resilient to such adjustments. For investors, the findings provide reassurance that short-term volatility may not always accompany fuel price policy changes.

Originality: The originality of this study lies in its focus on a localized macroeconomic event within the Indonesian context, offering new insights into how emerging markets respond to fuel price policy changes.