Analysis of Profit Management in Bukopin Islamic Bank in 2015-2019 With Modified Jones Model

Abstract

This study discusses the Analysis of Earnings Management in the Financial Statements of Islamic Bank Bukopin 2015-2019. The purpose of this research is to find out the reason for the practice of earnings management in the financial statements of the Bukopin Islamic bank using the modified Jones model. This study uses a quantitative descriptive approach. The data used is secondary data in the form of the annual financial report of the Bukopin Sharia bank for 2015-2019 with the data collection method based on purposive sampling. The test used in this study is a descriptive statistical test. The results of this study indicate that the Bukopin Islamic bank has been detected to carry out earnings management in its financial statements with a pattern of increasing and decreasing the value of earnings. In 2015, 2018 and 2019 the value of discretionary accruals is positive, which means that banks carry out earnings management by increasing the value of their profits. This is based on getting a bigger bonus so that it recognizes future income into the present. Meanwhile, in 2016 and 2017 the value of discretionary accruals was negative, which means that the bank has carried out earnings management by reducing the value of its earnings. This is based on not getting political attention, so that they can get facilities and conveniences from the government such as subsidies and minimizing tax costs. Earnings management practices are very influential on financial statements because earnings management is done by playing with the accrual component of the financial statements. This is because the accrual component is a component that does not require physical evidence of cash so it is easy to manipulate.