Sustainability report and accounting conservatism on earnings management: Evidence from Indonesia's consumer non-cyclicals sector (2021–2024)

Authors

  • Handel Benedicto Mangero Sam Ratulangi University
  • David P. E Saerang Sam Ratulangi University
  • Peter M. Kapojos Sam Ratulangi University

DOI:

https://doi.org/10.58784/cfabr.492

Keywords:

accounting conservatism, earnings management, discretionary accruals, sustainability report

Abstract

Earnings management is an intervention by management in the preparation of financial reports for external parties in order to smooth, increase, or decrease reported earnings. In the consumer non-cyclicals sector, which has a stable market capitalization, earnings management may be influenced by various factors, including sustainability report disclosure as a form of corporate transparency and responsibility, and the level of accounting conservatism applied. This study aims to analyze the effect of the sustainability report and accounting conservatism on earnings management in consumer non-cyclicals sector firms listed on the Indonesia Stock Exchange (IDX) during 2021–2024. Earnings management is proxied by discretionary accruals (DA) using the Modified Jones Model, the sustainability report is proxied by the Sustainability Reporting Disclosure Index (SRDI), and accounting conservatism is proxied by conservatism accruals (CONACC). Using purposive sampling, 39 firms were selected, yielding 156 firm-year observations analyzed with multiple linear regression. The results show that the sustainability report has no significant effect on earnings management (t = -0.776; Sig. = 0.439), whereas accounting conservatism has a negative and significant effect (t = -14.323; Sig. < 0.001). The Adjusted R² of 0.567 indicates that both variables jointly explain 56.7% of the variation in earnings management. These findings suggest that sustainability disclosure has not yet directly constrained earnings management practices, while a higher level of accounting conservatism can suppress accrual-based earnings management among consumer non-cyclicals firms in Indonesia.

Downloads

Download data is not yet available.

References

Alodat, A. Y., Al Amosh, H., Alorayni, O., & Khatib, S. F. A. (2024). Does corporate sustainability disclosure mitigate earnings management: Empirical evidence from Jordan. International Journal of Disclosure and Governance, 21(1), 165–174. https://doi.org/10.1057/s41310-023-00213-4

Amin, A., Bunyamin, & Kurniadiati, I. (2022). The Effect of Accounting Conservatism on Earnings Management with Risk Management as Intervening. International Journal of Economics, Business and Management Research. 6(07), 266–279. https://ijebmr.com/link/996

Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earnings management. The Accounting Review, 70(2), 193–225. https://doi.org/10.2308/TAR-9505096112

Erin, O. A., & Bamigboye, O. A. (2022). Evaluation and analysis of SDG reporting: Evidence from Africa. Journal of Accounting and Organizational Change, 18(3), 369–396. https://doi.org/10.1108/JAOC-02-2020-0025

Griffin, P. A. (1977). The time-series behavior of quarterly earnings: Preliminary evidence. Journal of Accounting Research, 15(1), 71–83. https://doi.org/10.2307/2490556

Hartam, W., & Kresnawati, E. (2022). Accounting conservatism and earnings management: Moderating effect of the corporate life cycle. Proceedings of the International Conference on Sustainable Innovation Track Accounting and Management Sciences (ICOSIAMS 2021), 295-303. https://doi.org/10.2991/aebmr.k.211225.041

Indy, L. A., Uzliawati, L., & Mulyasari, W. (2022). The effect of managerial ownership and institutional ownership on sustainability reporting and their impact on earning management. Journal of Applied Business, Taxation and Economics Research (JABTER), 1(3), 243-256. https://equatorscience.com/index.php/jabter/article/view/48

Iqbal, S., Andriani, F., & Hariadi, B. (2023). Does good corporate governance (GCG) moderate the sustainability report disclosure and earnings management relationship. ASSETS: Jurnal Akuntansi dan Pendidikan, 12(2), 174–187. https://doi.org/10.25273/jap.v12i2.15979

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

Kristianto, P., & Aryanindita, G. (2025). Pengungkapan sustainability report dan komisaris independen terhadap praktik earnings management. Balance: Jurnal Akuntansi, Auditing Dan Keuangan, 22(1), 1-23. https://doi.org/10.25170/balance.v22i1.6307

Maisaroh, S., & Ariani, K. R. (2024). Pengaruh good corporate governance, konservatisme akuntansi dan ukuran perusahaan terhadap manajemen laba (Studi empiris pada perusahaan sektor properti yang terdaftar di Bursa Efek Indonesia tahun 2018-2022). Jurnal Lentera Akuntansi, 9(2), 157–169. https://doi.org/10.34127/jrakt.v9i2.1234

Ma'rifah, F., & Suwarno. (2025). Pengaruh konservatisme akuntansi dan good corporate governance terhadap manajemen laba. Journal of Culture Accounting and Auditing, 4(1), 1–14. https://doi.org/10.30587/jcaa.v4i1.9070

Nanda, V. (2025). Sustainability disclosure and profit management: A global systematic review. Generate Digital Publishing, 1(2), 69-87. DOI: https://doi.org/10.70764/gdpu-csb.2025.1(2)-01

Nurmaya, M., Purnama, D., & Nurfatimah, S. N. (2025). Pengaruh free cash flow, leverage, konservatisme akuntansi dan kompensasi eksekutif terhadap manajemen laba. Jurnal Akuntansi dan Keuangan, 13(1), 53–66.https://doi.org/10.29103/jak.v13i1.18645

Otoritas Jasa Keuangan. (2017). POJK No. 51/POJK.03/2017 tentang penerapan keuangan berkelanjutan bagi lembaga jasa keuangan, emiten, dan perusahaan publik. Jakarta: OJK.

Otoritas Jasa Keuangan. (2021). SEOJK No. 16/SEOJK.04/2021 tentang bentuk dan isi laporan tahunan emiten atau perusahaan publik. Jakarta: OJK.

Olagunju, A., Adenle, O, E., Obademi, O., Obiosa, R. T., & Akinola, A. O. (2023). Sustainability reporting and earnings management of listed non-financial firms in Nigeria. Vedecké Práce MtF STU, 31(52), 68–83.https://doi.org/10.2478/rput-2023-0008

Renaldi, R., & Hendriyeni, N. S. (2023). Pengaruh pengungkapan laporan keberlanjutan dan profitabilitas terhadap manajemen laba pada perusahaan batu bara di Indonesia periode 2017-2021. Journal of Emerging Business Management and Entrepreneurship Studies, 3(2), 155-168. https://doi.org/10.34149/jebmes.v3i2.111

Roosyiidah, R., Yulianti, L., & Muslih, R. A. (2025). Pengaruh pengungkapan laporan keberlanjutan dan tax avoidance terhadap manajemen laba perusahaan yang terdaftar di Jakarta Islamic Index (JII70) periode 2020-2024. Akuntansi dan Manajemen, 20(1), 59-75. https://doi.org/10.30630/jam.v20i1.328

Sunaryo, A., & Wondiwoi, I. (2025). Analisis laporan keuangan dalam mengukur kinerja keuangan dari sisi current ratio dan net profit margin perusahaan pada PT Indah Kiat and Paper Tbk. Jurnal Ekonomi Dan Bisnis, 17(2), 98-104. https://ejurnal.stie-portnumbay.ac.id/index.php/jeb/article/view/322

Watts, R. L. (2003). Conservatism in accounting part I: Explanations and implications. Accounting Horizons, 17(3), 207–221. https://doi.org/10.2308/acch.2003.17.3.207

Downloads

Published

2026-09-11

How to Cite

Mangero, H. B., Saerang, D. P. E., & Kapojos, P. M. (2026). Sustainability report and accounting conservatism on earnings management: Evidence from Indonesia’s consumer non-cyclicals sector (2021–2024). The Contrarian : Finance, Accounting, and Business Research, 5(2), 213–222. https://doi.org/10.58784/cfabr.492

Issue

Vol. 5 No. 2 (2026)

Section

Articles

License

Copyright (c) 2026 Handel Benedicto Mangero, David P. E Saerang, Peter M. Kapojos

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Under this license then authors free to:

  • Share - copy and redistribute the material in any medium or format.
  • Adapt - remix, transform, and build upon the material for any purpose, even commercially.

The licensor cannot revoke these freedoms as long as you follow the license terms.

Under the following terms:

  • Attribution - You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
  • No additional restrictions - You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.


Notices:

  • You do not have to comply with the license for elements of the material in the public domain or where your use is permitted by an applicable exception or limitation.
  • No warranties are given. The license may not give you all of the permissions necessary for your intended use. For example, other rights such as publicity, privacy, or moral rights may limit how you use the material.