Abstract: Tendency of earnings management practice approaching merger and acquisition aims to increase share price before stock merger so that it can reduce company purchase cost of acquisition target. Previous research has proven the presence of profit management. While, company size is considered having ability to affect on company value. Since larger size or scale of company will lead to easier company way to obtain sources of funds both intern and extern. This research aims to describe the effects of earnings management on the disclosure of stock return and effects of company size on stock return.
Population in this research is acquisition companies that are registered in Indonesia Stock Exchange in 2011-2016. Sampling technique used purposive sampling so there are 40 companies as the research samples. The data used in this research are secondary data taken from ISE website and TICMI. Analysis technique is multiple linear regression, the regression model also has passed classical assumption test.
Results of the research indicate that acquisition company management truly conducts earnings management when publication before acquisition announcement. The earnings management by acquisition companies give negative effects on stock return; meanwhile company size has no effects on stock return of acquisition companies.
Keywords: Profit Management, Company Size, Stock return.
Title: EFFECTS OF EARNINGS MANAGEMENT AND COMPANY SIZE ON RETURN ON ASSETS BY ACQUISITION COMPANIES IN INDONESIA STOCK EXCHANGE IN 2011-2016
Author: Kadek Dian Jatiwardani, I Made Sukartha
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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