Narrative Accounting Practices in Indonesia Companies

Authors

  • Inten Meutia Sriwijaya University
  • Budiawan Cimarko Putra Sriwijaya University

DOI:

https://doi.org/10.21512/bbr.v8i1.1944

Keywords:

creative accounting, narrative accounting, management discussion analysis, impression management

Abstract

This research aimed to reveal creative accounting practices in the form of narrative accounting occuring in companies in Indonesia. Using content analysis, this research analyzed the management discussion and analysis
section in the annual report on the group of companies whose performance had increased and declined in several companies listed on the Indonesian Stock Exchange. This research finds that the narrative accounting practices are applied in these companies. The four methods of accounting narratives are found in both groups of companies. There are stressing the positive and downplaying the negative, baffling the readers, differential reporting, and
attribution.

Author Biographies

Inten Meutia, Sriwijaya University

Accounting Dept

Budiawan Cimarko Putra, Sriwijaya University

Accounting Dept

References

Agyemang, K. J., Williams, A. S., & Kim, D. Y. (2015). “Scandalous!”: Reputation, impression management, and Employee Assistance Programs (EAPs) in the NBA. Sport Management Review, 18(4), 609-617.

Beattie, V. (2014). Accounting narratives and the narrative

turn in accounting research: Issues, theory, methodology, methods and a research framework. British Accounting Review, 46(2), 111-134. http://doi.org/10.1016/j.bar.2014.05.001

Bolino, M. C., Kacmar, K. M., Turnley, W. H., & Gilstrap, J. B. (2008). A multi-level review of impression management motives and behaviors. Journal of Management, 34(6), 1080-1109. http://doi.org/10.1177/0149206308324325

Breton, G., & Taffler, R. J. (2001). Accounting information

and analyst stock recommendation decisions: A content analysis approach. Accounting and Business Research, 31(2), 91-101. http://doi.org/10.1080/00014788.2001.9729604

Chng, D. H. M., Rodgers, M. S., Shih, E., & Song, X. (2015). Leaders’ impression management during organizational decline: The roles of publicity, image concerns, and incentive compensation. The Leadership Quarterly, 26(2), 270-285. http://doi.org/10.1016/j.leaqua.2014.12.003

Clarkson, P. M., & Kao, J. L. (1999). Evidence that Management Discussion and Analysis (MD&A) is a part of a firm’s overall disclosure package. Contemporary Accounting Research, 16(1), 111-134.http://doi.org/10.1111/j.1911-3846.1999.tb00576.x

Clatworthy, M., & Jones, M. J. (2001). The effect of thematic structure on the variability of annual report readability. Accounting, Auditing & Accountability Journal, 14(3), 311-326. http://doi.org/10.1108/09513570110399890

Clatworthy, M. A., & Jones, M. J. (2003). Financial reporting of good and bad news: Evidence from accounting narratives. Accounting and Business Research, 33(3), 171-185. http://doi.org/10.1080/00014788.2003.9729645

Clatworthy, M. A., & Jones, M. J. (2006). Differential patterns of textual characteristics and company performance in the chairman’s statement. Accounting, Auditing & Accountability Journal, 19(4), 493-511. http://doi.org/10.1108/09513570610679100

Courtis, J. K. (2004). Corporate report obfuscation: Artefact

or phenomenon? British Accounting Review, 36(3), 291-312. http://doi.org/10.1016/j.bar.2004.03.005

Deegan, C., & Gordon, B. (1996). A study of the environmental disclosure practices of Australian corporations. Accounting and Business Research, 26(3), 187-199. http://doi.org/10.1080/00014788.1996.9729510

Deloitte. (2010). Swimming in words: Surveying narrative

reporting in annual reports. Retrieved from www.iasplus.com/en/binary/uk/1010ukswimminginwords.pdfn

Elliott, W. B. (2006). Are investors influenced by pro forma emphasis and reconciliations in earnings announcements? The Accounting Review, 81(1), 113-133.

Frezatti, F., B. Carter, D., & FG Barroso, M. (2014). Accounting without accounting: Informational proxies and the construction of organisational discourses. Accounting, Auditing & Accountability

Journal, 27(3), 426-464.

Hooghiemstra, R. (2000). Corporate communication and

impression management–new perspectives why companies engage in corporate social reporting. Journal of Business Ethics, 28(1/2), 55-68. http://doi.org/10.1023/A:1006400707757

Hussainey, K., & Al-Najjar, B. (2011). Future-oriented narrative reporting: determinants and use. Journal of Applied Accounting Research, 12(2), 123-138.

Jones, M. J. (2011). The nature, use, and impression management of graphs in social and environmental accounting. Accounting Forum, 35(2), 75-89.

http://doi.org/10.1016/j.accfor.2011.03.002

Maltby, J., & Tsamenyi, M. (2010). Critical perspectives on

accounting narrative accounting disclosure : Its role in the gold mining industry on the Gold Coast 1900-1949. Critical Perspectives on Accounting, 21(5), 390–401. http://doi.org/10.1016/j.cpa.2010.03.001

Marder, B., Slade, E., Houghton, D., & Archer-Brown, C. (2016). “I like them, but won’t ‘like’them”: An examination of impression management associated with visible political party affiliation on Facebook. Computers in Human Behavior, 61, 280-287. http://

doi.org/10.1016/j.chb.2016.03.047

Merkl-Davies, D., Brennan, N., & Vourvachis, P. (2011). Text analysis methodologies in corporate narrative reporting research. In 23rd CSEAR International Colloquium.

Morrow, S. (2005). The bussiness of football: Image management in narrative communication. The British Accounting Review, 38(1), 125-127. http://doi.org/10.1016/j.bar.2005.11.002

PT BFI Finance Indonesia Tbk. (2013). Annual report of PT

BFI Finance Indonesia Tbk. Retrieved from https://www.bfi.co.id/en/investor-relations/annual-report

PT Ciputra Development Tbk. (2013). Annual report of PT

Ciputra Development Tbk. Retrieved from http://www.ciputradevelopment.com/investor-relation/annual-reports

PT Elang Mahkota Teknology Tbk. (2012). Annual report of PT Elang Mahkota Teknology Tbk. Retrieved from http://www.emtek.co.id/annual-report

PT Indo Tambangraya Megah Tbk. (2013). Annual report PT Indo Tambangraya Megah Tbk. Retrieved from http://www.itmg.co.id/id/investor-relation/annualreport

PT Kimia Farma Tbk. (2013). Annual report of PT Kimia Farma Tbk. Retrieved from http://www. kimiafarma.co.id/investor/laporan-tahunan.html

PT Krakatau Steel Tbk. (2013). Annual report of PT Krakatau Steel Tbk. Retrieved from http://www.krakatausteel.com/=content&cid=129

PT London Sumatra Indonesia Plantation Tbk. (2013). Annual report of PT London Sumatra Indonesia Plantation Tbk. Retrieved from http://www.londonsumatra.com/contentDownload.aspx?mid=47

PT Sampoerna Agro Tbk. (2012). Annual report of PT Sampoerna Agro Tbk. Retrieved from http://www.Sampoerna.com/id_id/investor_information/disclosures_and_reports/pages/annual_reports.aspx

PT Sampoerna Agro Tbk. (2013). Annual report of PT Sampoerna Agro Tbk. Retrieved from http://www.sampoerna.com/id_id/investor_information/disclosures_and_reports/pages/annual_reports.aspx

PT Tower Bersama Infrastructur Tbk. (2013). Annual report of PT Tower Bersama Infrastructur Tbk. Retrieved fromhttp://www.tower-bersama.comannual-reports

PT XL Axiata Tbk. (2012). Annual report of PT XL Axiata Tbk. Retrieved from http://www.xl.co.id/ corporate/en/investor/information/ annual-report

PT XL Axiata Tbk. (2013). Annual report of PT XL Axiata Tbk. Retrieved from http://www.xl.co.id/corporate/en/investor/information/annual-report

Shah, A., & Butt, S. (2011). Creative accounting: A tool to help companies in a crisis or a practice to land them into crises. International Conference on Business and Economics Research, 16, 96-102.

Smith, M., & Taffler, R. (1992). The chairman’s statement and corporate financial performance. Accounting & Finance, 32(2), 75-90.

Solomon, J. F., Solomon, A., Joseph, N. L., & Norton, S. D. (2013). Accounting, organizations and society impression management, myth creation and fabrication in private social and environmental reporting: Insights from Erving Goffman. Accounting, Organizations and Society, 38(3), 195-213. http://doi.org/10.1016/j.aos.2013.01.001

Stolowy, Hervé, & Breton, G. (2004). Accounts manipulation:

A literature review and proposed conceptual framework. Review of Accounting and Finance, 3(1), 5-92. http://doi.org/10.1108%2Feb043395

Yekini, L. S., Wisniewski, T. P., & Millo, Y. (2016). Market reaction to the positiveness of annual report narratives. The British Accounting Review, 48(4), 415-430. http://doi.org/10.1016/j.bar.2015.12.001

Downloads

Published

2017-05-31