Effect of Accrual Quality on Earnings Quality

(Case Study on Enterprises Registered in The Indonesian Securities Exchange 2010 2014)


  • Michelle Swanly Sekolah Tinggi Ilmu Ekonomi Kesatuan
  • Yayuk Nurjanah Sekolah Tinggi Ilmu Ekonomi Kesatuan


accrual quality, discretionary accrual, innate accrual, profit quality


Abstract. In accounting economics we know about the Accrual Basis that regulates all
records of each transaction both cash and non-cash, and in the Akrual recording itself there
are two (2) influencing factors, namely Innate Accrual and Discretionary Accrual. In
accrual recording in a company is very influential in determining the quality of earnings
that can be obtained. By presenting the data, we can see how far the recording affects the
profit of a company in its recording. The purpose of this research is to find out whether
each company records accruals correctly or vice versa. The author conducts research using
the financial statements of manufacturing companies in the industrial sector listed on the
Indonesia Stock Exchange with a span of five (5) years, from 2010 - 2014. The results of
the study regarding the effect of accrual quality on earnings quality state that accrual
quality, both discretionary and innate indeed affects the earnings quality of a company.
Therefore, the company's management policy also determines both the quality of accruals
and the quality of the company's earnings. Companies with low accruals show good
earnings quality because management's actions that report smaller profits are a form of
conservative accounting application.

Keywords: accrual quality, discretionary accrual, innate accrual, profit quality