ABSTRACT: The research is aimed at examining the effect of income smoothing (real, artificial and classificatory smoothing) on the investor’s motivation to invest their money in the company registered in JSX (Jakarta Stock Exchange), both partially and simultaneously. This research hopefully contributes to relatively new knowlegde to the academics, especially the impact caused by the management behavior in conducting income smoothing. Moreover, for the management of the company listed in JSX, they will be able to settle the policies aiming the value and organizational continues improvement. While for the investors, the research’s results would be one of the consideration in making investment decision.
The research tested hypotheses by using multiple regression analysis model. Furthermore, t test was used to test partially, the effect of income smoothing dimension on investor motivation. While for simultaneous test, F test was applied. Hypotheses testing was conducted by using research sample of 107 investors registered in 16 securities companies in Central Java and D.I. Yogyakarta region, precisely in three major cities; Semarang, Solo and Yogyakarta.
The research result shows that income smoothing through actual transaction (real smoothing) and income smoothing through procedure or accounting method (artificial smoothing) do not have any effects on investor motivation to invest. On the contrary, investors do not respond to the income smoothing act by using both dimension mentioned. But in the other side, this research shows that income smoothing through elements classification in the income statement (classificatory smoothing) affects the investor motivation to invest in the companies listed in JSX.
Keywords: real, artificial and classificatory smoothing, investor motivation, JSX
Penulis: Mursalim
Kode Jurnal: jpmanajemendd060020
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