This research examines whether the earnings management level is
performed lesser by the state-owned-enterprises (SOEs) prior to initial public
offerings (IPO) than the non-SOEs prior to IPO. The research uses 90 samples
that are taken from 45 SOEs samples and 45 non-SOEs samples that are listed in
Indonesia Stock Exchange (IDX), both from 3 years prior to IPO during 1991-
2013. We exclude the financial sector in both SOEs and non-SOEs because the
financial sector is using different measurement. Earnings management is
measured using discretionary accruals which is measured using Jones model
(1991).
The result of this research is that the earnings management level of SOEs
prior to IPO is not lesser than the non-SOEs’. Based on the one sample t-test
conducted by researcher, we can conclude that both SOEs and non-SOEs perform
earnings management prior to IPO. It is suspected that the implementation of
good corporate governance is still weak on both SOEs and non-SOEs.