ABSTRACT: This study discuss about earnings management and financial performance of theacquirer before and after acquisition. The purpose of research was to obtainempirical evidence of how earning management have done by acquirer companiesbefore the implementation of acquisition. In addition it aims to determine thechanges in the acquirer’s financial performance before and after the acquisition. This research is a comparative study which to compare the financial performance the acquirer before and after the company make acquisition. Analysis of financialperformance uses financial rations, including profitability, activity, andsolvability. Analysis of earnings management using the theory of Jones modified. Earnings management by the acquirer is a proxy for discretionary accruals (DA).The company performance was measured by using financing rations (a net profit margin, return on assets, total assets turnover, and debt to equity ratio). The resultof analysis showed that there are two companies which have positive discretionary accrual value and the other three companies which have negative discretionary accrual value. Moreover financial performance of the acquirer company is experiencing the different more toward to reduction of financial performance. Theconclusion was that earning management of two acquirer companies (ANTM andUNTR) have done by increasing the profit (income increasing accruals) before doing the acquisition. While, the other three companies (ENRG, RAJA, and SMGR)have done earning management by decreasing the profit (income decreasing accruals) before doing the acquisition. Furthermore, financial performance that measure with NPM and DER increased after acquisition, while ROA and TATO decreased after acquisition.
Keyword: Earning Management, Acquisition, Financial Performance
Penulis: Tyasshela Sani Wibowo
Kode Jurnal: jpmanajemendd151591

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