Partial test results (t test)
This test aims to show how far the influence of the
independent variables in explaining the variation
individually dependent variable. Test results partially
explain that the earnings management variable has a
positive and significant effect on the disclosure of CSR
with a regression coefficient of 0.163; t value 0.358 and
significance of 0.721. This shows that the earnings
management variable has no significant effect on CSR
disclosure. This means that there is no relationship of
earnings management on CSR disclosure statistically.
However, because the regression coefficient is positive,
the increase in earnings management leads to an
increase in CSR disclosure. Decrease in earnings
management to encourage a decrease in CSR
disclosure. Therefore, changes in earnings management
will respond either by disclosure of CSR in the form of a
decrease or an increase.
The second test showed results that variable earnings
management do not have a significant negative effect on
firm value with regression coefficient -0.425; t value -
1.460; and 0.147 significance greater than 0.05. This
suggests that earnings management variable has no
significant effect partially, so it can be concluded that the
earnings management variable has no significant effect
on firm value or no statistical relationship to firm value.
And the regression coefficient is negative then the
increase in earnings management will encourage a
decline in the value of the company. And vice versa, a
decrease in earnings management will encourage an
increase in the value of the company. Thus, a change
(either increase or decrease) will be responded earnings
management change (either increase or decrease) in the
value of the company 0.425.
Variable expression of corporate social responsibility
has a positive and significant impact on firm value with
regression coefficient 0.183, t value 3.031, and 0.003
significance smaller than 0.05. This suggests that the
variables of corporate social responsibility disclosure has
the effect of partially, so it can be concluded that the
disclosure of corporate social responsibility has a
significant effect on firm value, the increase in corporate
social responsibility disclosure will encourage an increase
in the value of the company. And vice versa, a decrease
in corporate social responsibility disclosure would push
down the value of the company. Thus, a change (either
increase or decrease) the disclosure of corporate social
responsibility will be responded change (either increase
or decrease) in the value of the company 0.183.
Coefficient of determination test results
Adjusted R2 is used to measure the level of ability of the
model to explain the variations of independent variables.
The coefficient of determination is between zero and one.
Adjusted R2 values are small means the ability of the
independent variables in explaining the dependent
variable is very limited. Value close to one means that the
independent variables provide almost all the information
needed to predict the variation in the dependent variable.
The test results showed R2 of 0.001 or 0.1%. So it can
be said that the 0.1% amount of social responsibility
disclosure is caused by earnings management, while
99.9% of the amount of social responsibility are caused
by other variables not examined in this study. Testing
results for the second model shows R2 of 0.090 or 9%.
So it can be said that 9% of the value of the company
due to earnings management and social responsibility
disclosure, while 99.9% of the amount of social
responsibility is caused by other variables not examined
in this study.
DISCUSSION
Earnings management relationship with CSR
disclosure
Positive accounting theory is intended to explain and
predict the consequences that occur when managers
determine a particular choice. Earnings management is
one of the accounting practices described in positive
accounting theory. When the manager decides to
conduct earnings management practices, then there are
consequences to be accepted if it is known as loss of
position or job loss. Therefore, to minimize the risk that is
the case then the manager (the company) will undertake
CSR activities and disclose the company's annual report.
Based on the theory that the effect on earnings
management of CSR disclosure. The results are
consistent with existing theory, because the result is
positive. Although it does not mean the absence of
significant statistical relationship is caused by the state of
the sample. However, these results conflict with studies
conducted by Haryudanto and Yuyetta (2011) which
states the negative effect on earnings management of
CSR disclosure. This difference may be due to the
number of samples and sample conditions used. There is
no significant relationship between earnings management
and CSR is caused by not too high level of CSR
disclosure in Indonesia. In other words, CSR disclosures
by the company in Indonesia are still relatively
economical companies. Economic enterprise by Suharto
in Haryudanto and Yuyetta (2011) is a company that has
a high profit but its CSR disclosure level is not too low or
high. Most companies in Indonesia have not been
maximizing its CSR activities well.
CSR disclosure relationship with firm’s values
In carrying out its activities, the company is not only
responsible for the investor parties but also
environmentally responsible. Companies must pay
attention to the impact of its activities on the surrounding
environment. In fact, not only that the company must also
consider the impact on the earth, especially companies
that have a high level of pollution to the environment.
Therefore, companies need to disclose social
responsibility. In addition to the existing line with the
theory, the results of this study are also consistent with
research conducted by Murwaningsari (2008) which
states that the degree of influence of CSR on firm value,
the higher level of disclosure and the higher the value of
the company. Research conducted by Zuhroh and Heri
(2003) explains that CSR disclosure in the annual report
of the company going public can affect the volume of
stock trading. This means that investors respond to
information about CSR activities disclosed by the
company through the company's annual report properly.
Research conducted by Harduyanto (2011) also indicates
that CSR disclosure by the company has a positive effect
on firm value. In addition, research conducted by Booth-
Harris Trust Monitor (2001) in Priantinah and Reny
(2012) also showed that the majority of consumers will
abandon a product that has earned a bad or negative
reported.
Mukhtaruddin et al. 55
Earnings management relations firm’s value
As a manager of the company, managers know more
than the state of the company shareholders or
shareholders, so the shareholders or owners of
companies rely on financial statements to determine the
state of the company. This raises the information gap
between managers and shareholders (information
asymmetry). Basically managers perform earnings
management to increase corporate profits, which in turn
will have an impact on increasing the value of the
company. Earnings management activities are one of the
cults of accounting to enhance shareholder value. This is
in line with the positive accounting theory. Positive
accounting theory describes a process that the company
(manager) is using to understand accounting knowledge
to face future conditions to achieve the company's main
goal which is increasing the value of the company. With
good management practices and tidy profit then the value
of the company will increase. However, the results of this
study conflict with existing theory, because of the results
showed that earnings management has no significant
negative effect on firm value. This means that most
companies in Indonesia do not embrace the practice of
earnings management to enhance shareholder value.
These results are also contrary to the research
conducted by Herawaty (2008) which states that earnings
management has a positive effect on firm value. His
research indicates that earnings management actions
undertaken can have a direct impact on the survival of
the company. However, the level of significance in this
study is in line with the level of significance in a study
conducted by Harduyanto (2011) which indicates that
earnings management is not a significant effect on
firm value. This is caused by the object sample
average sample firm has a low level of earnings
management.
CONCLUSIONS AND RECOMMENDATIONS
Based on the analysis and testing of the effect of
earnings management as an independent variable, the
disclosure of CSR as an intervening variable, and the
value of the company at companies listed on the
Indonesia Stock Exchange in 2010-2012 as the the
dependent variable, it can be concluded that:
1. Earnings management variables have no significant
positive effect on the disclosure of CSR in companies
listed in Indonesia Stock Exchange 2010-2012.
2. CSR disclosure variable has positive significant effect
on firm’s value in companies listed in Indonesia Stock
Exchange 2010-2012.
3. Earnings management variables has no significant
negative effect on firm’s value in companies listed in
Indonesia Stock Exchange 2010-2012.
Suggestion
Based on the results of previous research and the
discussion, the following suggestions can be drawn:
1. To further improve the management expected wider
corporate social responsibility disclosure in the annual
report.
2. For the government, IAI and the relevant regulators are
expected to formulate a policy or rule that is capable of
governing the disclosure of CSR because the extent of
CSR disclosures made by the company is still relatively
low.
3. Future studies are expected to use a longer
observation period so that it will provide a greater
likelihood to obtain the actual conditions and increase the
number of samples.
4. Future studies are expected to be able to add or use
other