Please use this identifier to cite or link to this item: https://www.um.edu.mt/library/oar/handle/123456789/27390
Title: The impact of industry-specific regulation on income smoothing practice : evidence from Indonesian commercial banks
Authors: Diantimala, Yossi
Keywords: Banks and banking -- Indonesia
Income smoothing
Loans -- Law and legislation
t-test (Statistics)
Issue Date: 2018
Publisher: Ahmet Gökgöz
Citation: Diantimala, Y. (2018). The impact of industry-specific regulation on income smoothing practice : evidence from Indonesian commercial banks. Journal of Accounting, Finance and Auditing Studies, 4(1), 59-78.
Abstract: This Paper aims to examine the impact of the implementation of Loan to Deposit Ratio (LDR) Regulation on income smoothing practice of commercial banks in Indonesia. The LDR Regulation is industryspecific regulation. There are conflicting arguments regarding the ability of industry-specific regulation in reducing income smoothing of banks. The samples used in this research are 28 listed commercial banks in Indonesia for the periods 2008 - 2011. Overall, there are 112 bank-annual observations. The test focuses specifically on panel time series cross-sectional models. A T-test of Fixed effects model of panel data and paired sample t-test are used to test the hypothesis. The result indicates that commercial bank managers smooth their income through the allowance for impairment loss. However, the implementation of the LDR regulation can not reduce the level of income smoothing of publicly commercial banks in Indonesia. The level of income smoothing after the LDR regulation is lower than the level of income smoothing before the implementation of the LDR regulation, but the differences are not significant.
URI: https://www.um.edu.mt/library/oar//handle/123456789/27390
Appears in Collections:Journal of Accounting, Finance and Auditing Studies, Volume 4, Issue 1
Journal of Accounting, Finance and Auditing Studies, Volume 4, Issue 1

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