Earning Management in Local Government of Aceh Province

Abstract

This study aims to analyze earnings management in the financial statements of district/city governments in Aceh Province. The method used in this research is quantitative. The data used are secondary data sourced from the financial statements of the district/city governments in Aceh Province. There are 23 districts/cities in Aceh Province. The observation period used are 3 years which was 2018 to 2020. Earning management in this study was measured by discretionary accrual using the Modified Jones Index. The discretionary accruals obtained in this study shows a positive value. This means that there are earning management in the financial reporting of district/city governments in Aceh province during the observation period, where district/city governments in Aceh Province doing teh earning management by using discretionary accruals to report their surplus/deficit. This research is expected to provide information to district/city local governments in Aceh Province regarding earnings management in financial reporting so that local governments can take action to realize a better financial management. For users of local government financial information, the results of this study will be a means of realizing accountability and transparency of local government financial reporting.