Accounting Conservatism in the Perspective of Positive Accounting Theory: A Study of Islamic Banking in Indonesia

Asian Economic and Financial Review

article

Misnen Ardiansyah¹ 

[1] Faculty of Islamic Economics and Business, Universitas Islam Negeri Sunan Kalijaga

关键词: Accounting conservatism;    Islamic bank;    Executive compensation;    Debt covenant;    Political cost.;   

DOI  :  10.55493/5002.v12i6.4500

学科分类：社会科学、人文和艺术（综合）

来源: Asian Economic and Social Society

【 摘 要 】

Conservative accounting in Islamic banking is a crucial issue. This research aims to analyze the influence of executive compensation, the debt covenant, political cost, the composition of the commissioner board, the audit committee, and operating cash flow on the principle of accounting conservatism practiced in Islamic banking in Indonesia. Using data for 13 Islamic banks from 2014 to 2018 and employing panel regression, this study revealed that debt covenant, political cost, and operating cash flow significantly influence accounting conservatism. This result reconfirms the Positive Accounting Theory and Free Cash Flow Theory. However, the other three factors, i.e., executive compensation, the composition of the board of commissioners, and the audit committee were found to have no impact on accounting conservatism. From the findings, the study recommends that policy makers should improve the practice of good corporate governance in Islamic banking, thus the issue of conservative accounting methods could be minimized.

【 授权许可】

CC BY