INTERRELATIONSHIP BETWEEN EARNINGS MANAGEMENT AND CORPORATE SOCIAL RESPONSIBILITY REPORTING Research on Indonesian Listed Companies in BEI for 2012-2013

This research aims to examine the interrelationship between earnings management (EM) and corporate social responsibility reporting (CSR). This research uses GRI G3.1 Indeces to measure CSR while earnings management is measured with real activities manipulation proxie. Population of this research is all Indonesian Listed Companies in Indonesian Stock Exchange for the year 2012 and 2013. Companies from financial and banking groups are excluded because they have the characteristics of assets which are very different from the other industries. Two-Stages Least Squares (2SLS) Analysis on SPSS22 is used to examine the data. This research indicates that there is simoultanity relationship between earnings management and CSR reporting. But then, only CSR reporting which affects earnings management practices, but it isn’t found prove that earnings management affects CSR reporting

The relationship between corporate social responsibility disclosure and earnings management: is it a complement mechanism or a substitute mechanism?

Prior literature has provided inconclusive results concerning the relationship between corporate social responsibility disclosure (CSRD) and earnings management (EM). This study examines the relation between CSRD and EM. For this study, 479 annual reports of publicly listed Indonesian companies were selected as the sample. The two-stage least square (2SLS) method was employed to test the relationship between CSRD and EM. Our findings suggest that companies that have high CSRD are less likely to manage earnings. Moreover, our findings suggest that the relationship between CSRD and EM can be viewed as a substitute mechanism. This study contributes to the accounting literature by examining the relationship between CSRD and EM in the setting of an emerging countr