The analysis of earnings management with classification shifting by using discontinued operations in Indonesia

Abstract

This research aims to exam the proven of management in order to do classification shifting by using post discontinued operations. This research uses quantitative data. The data used in this research includes the secondary data that is financial statements of the companies listed on the Indonesian stock exchange from 2013 to 2015. The data analysis used in this research was multiple linear regression with data cross section, which is processed by using SPSS. The findings show that there are positive effects of discontinued operations to unexpected change in core earnings; the management has done classification shifting; in this case, management has done earnings management. The findings signify that there is an indication of classification shifting in the research sample in which the figures contained in financial statements, especially the account of discontinued operations, which is not reliable. The result of this research can be used by the investors as the basis for decision-making, especially investment decisions.