Earnings Management and Accounting Information Value: Impact and Relevance

This study examined the relevance of the information in the financial statements to test the impact of earnings management practices to the relevance of financial statement information. The financial information used was earnings and book value. This research separates proxy earning management discretionary accruals into short-term and long-term discretionary accruals. The test results against a company sample 822 listings in Indonesia stock exchange (IDX) during the period 2013 – 2015 proves that earnings and book value of equity does not lose its relevance as indicators for assessing the performance of a company. The study also found that, earnings management does not have any impact on the relevance of earnings and book value of equity when earnings management is done through short-term and longterm discretionary accruals.