Earnings Management Through Foreign Currency Transactions on Companies Listed on Indonesia Stock Exchange

This research aims to examine whether the condition of Rupiah
currency, the magnitude of monetary liabilities in foreign currencies, and
the condition of operating profit affects the management�s aggressiveness
to perform earnings management through foreign exchange gain or loss
(FEGL) post. This research was conducted on 258 companies listed on the
BEI in 2009 to 2015. This research was successfully proved on earnings
management through foreign currency transactions phenomenon for
several conditions. First, in the condition of Rupiah appreciation, the
managers that have monetary liabilities in foreign currency are less than
the monetary assets in foreign currency are more daring to make earnings
management through FEGL post than companies that have monetary
liabilities in foreign currency greater than monetary assets in foreign
currency. Second, managers of companies that decreasing in operating
profit, more daring to make earnings management through FEGL post than
companies that experience an increase in operating profit. Under the
depreciation of the Rupiah, the managers of companies with monetary
liabilities in foreign currency are less than monetary assets in foreign
currency, are more aggressive to perform earnings than the managers of
companies who have monetary liabilities denominated in foreign currency
greater than the monetary assets in foreign currency.